India’s latest progress on bilateral commerce agreements with Western nations are about extra than simply financial pursuits – India is present process a substantial geoeconomic reorientation within the face of rising tendencies. Protectionist waves, provide chain vulnerabilities, and rising geopolitical competitors have severely disrupted worldwide commerce in recent times. These adjustments have compelled nations to rethink commerce dependencies and rebalance alliances for resilience and strategic benefit. India has been proactive by signing new commerce pacts and reactivating dormant ones to turn out to be a key node in new world worth chains.
India-New Zealand: Rebooted Partnerships, Accelerated Commerce
Throughout his inaugural visit to India in March 2025, New Zealand Prime Minister Christopher Luxon – additionally the chief visitor on the Raisina Dialogue 2025 – highlighted the untapped potential in bilateral commerce following his assembly with Prime Minister Narendra Modi. The go to, marked by bilateral conferences on commerce, funding, and Indo-Pacific safety, noticed a turning level in India-New Zealand relations.
The renewal of free trade agreement (FTA) negotiations between New Zealand and India after a decade carries contemporary political dedication and higher financial convergence. The primary hurdle in earlier negotiations had been India’s protectionism within the dairy sector, which kinds the spine of the nation’s rural economic system, supporting tens of millions of small farmers. New Zealand’s extremely aggressive dairy sector wished elevated entry to the Indian market – a proposal that proved politically objectionable for India. Right this moment, each nations appear prepared to beat these sensitivities to signal a mutually useful settlement.
Through the go to, Luxon mentioned New Zealand would proceed pursuing entry to dairy whereas being open to revolutionary trade-offs and sectoral cooperation. New Delhi echoed the identical flexibility by saying the settlement would enhance bilateral trade tenfold commerce within the subsequent decade.
That imaginative and prescient rests on stable floor: India’s exports to New Zealand reached a document excessive in 2024, surpassing $600 million for the primary time – a 62 p.c enhance since 2019. Nonetheless, total bilateral trade stays modest, rising by simply 24 p.c over the identical interval.
Curiously, whereas commerce between the 2 nations rose from $862 million in 2015 to $1.2 billion in 2024, the post-COVID period has seen a notable shift – India has transitioned from operating a commerce deficit to recording a surplus in its commerce relationship with New Zealand. India primarily imports items and companies from New Zealand, corresponding to wool, iron and metal, fruits and nuts, and aluminum. Conversely, Indian exports to New Zealand primarily comprise prescribed drugs, mechanical equipment, textile articles, and treasured stones – reflecting each economies’ complementary strengths and the potential for deeper commerce integration.
Whereas the commerce construction continues to be pretty balanced, nice potential has but to be tapped in important minerals, tourism, superior agri-tech, and schooling companies. As New Zealand makes an attempt to diversify away from China – its largest commerce companion – India’s large shopper base and increasing center class turn out to be extra engaging. From the Indian viewpoint, integrating the South Pacific’s economic system by using New Zealand because the gateway would open up new commerce avenues and bargaining power within the comparatively unexplored area.
Furthermore, each nations understand the FTA as falling inside the total imaginative and prescient for enhanced financial and technological convergence within the Indo-Pacific area. Higher mobility for companies, cooperation within the discipline of renewable vitality, and digital companies are anticipated to characteristic within the closing settlement in accordance with the general imaginative and prescient for strategic financial convergence.
Strategic Tradecraft: Complexity, Convergence, and Competitors
India’s commerce diplomacy doesn’t stay confined to New Zealand. In December 2022, India and Australia applied the Financial Cooperation and Commerce Settlement (ECTA), marking a big milestone of their bilateral relations. This settlement goals to eradicate or cut back tariffs on varied items and companies, thereby enhancing commerce and funding flows between the 2 nations. The ECTA is anticipated to increase bilateral trade, with projections suggesting an increase from the present $31 billion to between $45 and $50 billion over the subsequent 5 years. Key sectors anticipated to learn embrace agriculture, sources, and companies, reflecting each nations’ dedication to deepening financial ties.
New Delhi can be negotiating geoeconomically important and politically mature commerce agreements with the UK and the European Union. These FTAs might be a pivot level for India’s progress technique, which is pushed by exports. They’re complemented by home priorities corresponding to the expansion of the manufacturing sector, empowerment of micro-, small-, and medium-sized enterprises (MSMEs), and technological self-reliance as a part of the “Make in India” initiative.
There have been over a dozen rounds of negotiations within the U.Ok. case. British priorities are enhanced entry to cars, whisky, and monetary companies. India’s priorities are enjoyable the norms for the motion of companies, guaranteeing satisfactory recognition of knowledge, and enhancing entry to textiles, pharma, and agricultural items. As of fiscal yr 2023–24, merchandise exports from India to the U.Ok. have been price $12.9 billion. In the meantime, after the FTA settlement is signed, one other $6.1 billion price of products – corresponding to clothes, seafood, mangoes, and engineering items – will profit from the tariff reductions.
In the meantime, in 2022 India and EU rebooted their FTA talks, which had been stalled since 2013. The 2 sides goal to conclude a commerce deal by the top of 2025. Nonetheless, important points stay unresolved. The EU is urgent for tariff cuts on automobiles, wines, and dairy merchandise, whereas India is pushing again on what it sees as non-tariff obstacles – corresponding to carbon taxes and sustainability clauses – that would disproportionately have an effect on its exporters. In change, India calls for improved entry for IT professionals, generic medicines, and recognition as a data-secure nation to permit extra unrestrained cross-border information flows.
Within the Trump 2.0 period – marked by a renewed surge in protectionist insurance policies and the weakening of multilateral commerce establishments – India’s pivot towards bilateralism with trusted Western economies has turn out to be a necessity quite than a alternative. India’s expanded FTA engagements with New Zealand, Australia, the UK, the European Union, and different key Western companions have developed past transactional tariff reductions; they now function strategic devices for integrating into resilient world worth chains, fostering innovation, and enhancing India’s financial sovereignty. If executed successfully, these agreements couldn’t solely enhance market entry for Indian enterprises but in addition consolidate India’s repute as a reputable and central actor in shaping the long run structure of world commerce.
