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Which Indian Exports Stand to Gain From the New Zealand Trade Deal
Author
Shoonya Team
The free trade agreement (FTA) between India and New Zealand was set to come into force on October 20. A Moneycontrol analysis of trade data shows it could open a market of about $6 billion for Indian exporters. Pharmaceuticals, gems and jewellery, machinery and manufactured goods are among the sectors expected to gain the most. India exported goods worth $742 million to New Zealand in 2024.
Where Is the $6 Billion Export Gap?
Most of the opportunity is in product categories where New Zealand imports large amounts from other countries but very little from India. This is the case even though Indian exporters are already established in global markets.
| Category Group | Number of Categories | New Zealand Imports, 2024 ($ billion) |
|---|---|---|
| Total imports | 2,871 | 47.57 |
| India’s exports below $50,000 | 1,144 | 5.97 |
| India’s exports below $1,000 or nil | 506 | 2.25 |
How Large Is the Gap in Pharmaceuticals and Machinery?
India ships large volumes of these products worldwide, but sells very little of them to New Zealand.
| Product | New Zealand Imports | India’s Global Exports | India’s Exports to New Zealand |
|---|---|---|---|
| Pharmaceuticals | $763 million | Nearly $20 billion | $69 million |
| Immunological products | Nearly $140 million | Around $300 million | Virtually nil |
| Forklifts | Nearly $60 million | $141 million | Negligible |
| Grapes | $48.3 million | Not specified | Marginal share |
Which Sectors Already Have a Small Share of the Market?
In some categories, Indian exporters already supply New Zealand but hold only a small share of its purchases:
- Precious jewellery: India accounts for less than a quarter of a $108 million import market
- T-shirts: India supplies around 10 percent of a $95 million import market
- Plastic plates, sheets and films: India supplies about 7 percent of nearly $50 million in imports
From the first day of the agreement, New Zealand will remove tariffs on all qualifying Indian exports. This could make these exports more competitive against suppliers from other countries.
How Does the FTA Relate to West Asia Trade Disruptions?
The agreement comes as trade routes in West Asia are disrupted. An earlier Moneycontrol analysis found that New Zealand’s import demand could act as an alternative market for at least 12 percent of India’s exports currently exposed to the Strait of Hormuz. This estimate assumes prolonged disruptions and a weak recovery in demand in the affected Gulf economies.
Product groups with potential demand include:
- Food preparations
- Machinery
- Medical instruments
- Electrical equipment
- Cosmetics
- Plastics
Final Outlook
The agreement is now in effect. Trade data for the coming quarters will show whether tariff removal changes where New Zealand buys from in the 1,144 categories where India’s presence is currently negligible. The pace of recovery in Gulf economies may also affect how much the New Zealand market becomes part of India’s efforts to diversify its export destinations.
Source: Moneycontrol
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