New Zealand Parliament Ratifies Free Trade Agreement with India

India's trade policy has historically leaned toward protectionism. High tariff walls, quantitative restrictions, and a preference for import substitution characterised the pre-1991 era. After liberalisation, India progressively reduced tariffs and joined the World Trade Organization (WTO), committing to multilateral trade rules. However, India has remained cautious about deep tariff cuts, particularly in agriculture and sensitive manufacturing sectors. This caution has made India's FTA negotiations slow and selective. India stepped back from the Regional Comprehensive Economic Partnership (RCEP) in 2019, citing concerns about import surges, especially from China, and the risk to domestic industry. That decision highlighted a recurring tension in India's trade policy: the desire for export market access abroad versus the fear of import competition at home.

Against this backdrop, global trade has increasingly moved toward bilateral and regional agreements rather than multilateral WTO-led deals. Major economies have pursued preferential trade arrangements to secure supply chains, lock in market access, and build strategic partnerships. India has responded by accelerating its own bilateral FTA agenda, signing agreements with the UAE and Australia and now completing one with New Zealand. This shift reflects a more pragmatic approach: using FTAs as instruments of both economic integration and geopolitical alignment, particularly in the Indo-Pacific. India's Act East Policy (2014) and the Indo-Pacific Oceans Initiative (IPOI, 2019) provide the strategic framework within which economic agreements with Pacific democracies like New Zealand are embedded.

The contrast with protectionism is instructive. When major economies raise tariffs or manipulate currencies to gain trade advantages, India faces twin pressures: its exports become less competitive in those markets, and cheap imports may flood domestic markets through third-country routes. An FTA with a like-minded partner such as New Zealand works in the opposite direction. It creates a rules-based, predictable trade environment, locks in preferential access for Indian goods, and reduces the risk of being shut out as global trade fragments into competing blocs. The most-favoured-nation (MFN) commitment included in the India-New Zealand FTA for wine and key services sectors further future-proofs the agreement against unilateral tariff reversals.