FTA: New Agreements New Opportunities MEDIUM
  • ABC LARGE
  • ABC EXTRA LARGE
    • 4 min read

    International trade has been hit by Trump's tariffs. As a result, bilateral free trade agreements (FTAs) with the respective countries have gained momentum. India is taking aggressive steps in this regard. FTA has already been signed with Britain. Negotiations are underway with the United States and the European Union. Recently signed an agreement with New Zealand. 

    AFTA will expand the market in New Zealand for Indian IT, BPO, FinTech and HealthTech services companies. Tourism will grow. Indian engineers, consultants, teachers, students and trainers can easily enter the country. Trade between the two countries will double to 500 million dollars. Indian goods can enter the country duty-free. 1,379 types of agricultural commodities, processed food items, 363 types of marine products, 1,000 types of textiles and clothing are exported to the New Zealand market at zero duty from India. On the other hand, the tariffs on New Zealand goods exports to India will be greatly relaxed. In the next 15 years, New Zealand investments of 2 billion dollars will come into India. This will benefit the Indian agricultural, industrial and services sectors. Export oriented companies in Andhra Pradesh and Telangana will also benefit. 

    Demand for Exports

    If other countries exporting goods to New Zealand pay 10 percent duty due to FTA, India exports various classes of goods. There is no duty on goods. This will give our exports an edge in the market. India's exports of leather goods, footwear and related accessories will become cheaper in the New Zealand market than those of other countries due to the removal of tariffs. This will increase the market. Indian Micro, Small and Medium Enterprises (MSMEs) can benefit from increased exports of auto parts, machinery, machine tools, electronics and other engineering exports. In general, jewelry, gilt jewelry, and fashion accessories are priced very high. The reduction in tariffs on these will increase the demand for Indian exports in the New Zealand market. Exports of rice, spices, tea, coffee, oilseeds, processed fruits, vegetables, siddhaharas and confectionery will increase with zero duties. New Zealand is an attractive destination for chilled shrimp and fish exports. 

    On the other hand, tariffs on wool, coal, timber, avocados, blueberries and persimmons from New Zealand entering the vast Indian market will be drastically reduced. Quota-wise duty reduction on kiwi and apple fruits. New Zealand is the only country that gets subsidy from India in respect of apples. New Zealand companies will have access to over 100 service sectors including finance, education, tourism, construction, infrastructure construction and professional services. Exports of pashmina wool, handicrafts and saffron from Jammu and Kashmir to New Zealand will increase. Opportunities for sports goods, textiles, basmati rice from Punjab, diamonds, porcelain and processed food from Gujarat will increase. Exports of Darjeeling tea, textiles, jute goods from West Bengal, spices, electronics, coconut fiber products from Kerala, textiles and handicrafts from Odisha, textiles and auto parts from Tamil Nadu will gain momentum. 

    Maximum benefits...

    During the Modi government, India has signed FTAs ​​with Mauritius, UAE, Australia, FTA countries Switzerland, Iceland, Norway, Liechtenstein, Britain and Oman from 2021. Recently the seventh FTA was concluded with New Zealand. If milk, milk products and certain types of agricultural commodities are imported from those countries, the interests of Indian farmers will be harmed. Hence, they are excluded from FTAs. Indian exports have been given preferential access to markets in West Asia, Europe, Africa, Australia and New Zealand. Trade negotiations with the US, Canada and the European Union are ongoing. However, there is a risk that certain types of products from FTA partners could flood the Indian market. On the other hand, Indian MSMEs need to make better use of the benefits of FTAs. The Union Commerce Department should advise the states and companies to effectively use the benefits of FTAs. AP and Telangana governments should set up FTA helpdesks for companies and encourage exporters. FTA partner countries should be equipped to export agricultural, marine products, pharma and IT products extensively. Industrial and export promotion councils should be formed. Ports, road transport companies, shipping companies and cold warehouses should be made partners in export chain systems. Maximum benefits should be obtained with FTAs ​​through such measures.

    Good for Telugu States

    Drugs, medical equipment, engineering goods, plastic, rubber products, rice, processed food items from Telangana, especially from Hyderabad area can enter New Zealand with very low tariffs. Demand for IT, digital services, cyber security, fintech and healthtech services will also increase. Exports of fish, shrimp, rice, spices, processed food, apparel and textiles from AP will be positive. Massive exports can be taken up from Visakhapatnam and Krishnapatnam docks.

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