New Delhi: New Zealand’s opposition Labour Party has extended support to the proposed free trade agreement (FTA) with India. This now significantly improves the chances of the deal being approved in the New Zealand Parliament despite significant resistance coming from a key coalition partner. The move is being seen as a crucial step toward finalising the pact, which could give a significant boost to the economic ties between the two countries.
According to a Reuters report, Labour leader Chris Hipkins said the party would back the agreement even though it was “not the deal Labour would have negotiated”, stressing the importance of maintaining strong ties with India. The move now clears a major political hurdle for the deal as bipartisan backing is often essential for trade deals in New Zealand.
Political backing clears key hurdle
The India-New Zealand India free trade deal had faced uncertainty after coalition partner New Zealand First opposed it. Arguing that it did not adequately serve national interests, the deal was seeing significant pushback and stalemate. With the ruling National Party and its other ally ACT already in favour, Labour’s backing now provides the numbers required for parliamentary approval.
This cross-party support aligns with New Zealand’s tradition of bipartisan consensus on major trade agreements, which was hindering the approval of the FDA with India till now.
What the India–New Zealand FTA offers?
The agreement, concluded in December, aims to significantly boost bilateral trade by reducing or eliminating tariffs on a wide range of goods. Around 95 per cent of New Zealand’s exports to India will see tariffs cut or removed. More than half could become duty-free immediately. In return, Indian goods will gain duty-free access to New Zealand markets.
Additionally, New Zealand has committed to investing about $20 billion in India over the next 15 years as part of the deal, underlining the long-term strategic outlay that could come into play after the deal is implemented.