India and New Zealand Set to Seal Trade Pact Amid Global Tensions

India and New Zealand plan to sign a free trade agreement within two months, aiming to enhance bilateral trade in sectors like agriculture, aerospace, and renewable energy. This initiative comes after stalled talks and amid global trade tensions. Challenges remain over tariff disagreements, especially for dairy products.

India and New Zealand are poised to formalize a free trade agreement within two months, heralding a potential expansion of commerce in key sectors such as agriculture, aerospace, and renewable energy. This development was announced by New Zealand's Prime Minister Christopher Luxon during his visit to India, marking a renewed effort after a ten-year deadlock.

The proposed deal is seen as a strategic move to counteract mounting global trade tensions, especially in light of U.S. protectionist policies under former President Donald Trump. As India pursues similar agreements with the EU and UK, bilateral trade with New Zealand reached $1.2 billion in 2024, showcasing a 30% annual growth, according to India's trade ministry.

However, significant challenges remain. Analysts warn of potential delays due to tariff disputes, particularly concerning dairy products, a contentious issue for Indian farmers. Both nations are accelerating talks, with intentions to respect mutual sensibilities. New Zealand is optimistic about deepening partnerships with India, particularly in aerospace and renewable energy sectors.

(With inputs from agencies.)