FTA with New Zealand will strengthen India in the Indo-Pacific region. What is India's 'Act-East' policy?

News Topical, Digital Desk : India's efforts to strengthen its strategic interests in the Indo-Pacific region will be significantly boosted by the Free Trade Agreement (FTA) with New Zealand.

The fourth round of talks between India and New Zealand on this agreement was recently successfully concluded last week under the leadership of Commerce and Industry Minister Piyush Goyal and New Zealand Trade Minister Todd McLay.

What did both the countries say ?

Both countries have said that they are not looking at the future FTA agreement only from the perspective of trade relations but are paying more attention to how it can be used to serve the strategic interests of both countries, especially in establishing peace and tranquility in the Indo-Pacific region.

Following the FTA talks with New Zealand PM Christopher Luxon and Commerce Minister McLay in Rotorua, Commerce Minister Goyal stated that India's relations with New Zealand are improving across the board. PM Luxon's meeting with PM Narendra Modi in New Delhi in March 2025 has opened up new possibilities for cooperation in the defense and security sectors.

India's efforts regarding supply chain

Cooperation between the two countries' armed forces is being discussed, and we are moving toward broader cooperation in exchanging information related to each other's strategic interests. In this context, an FTA will further enhance mutual trust between the two countries. It will also facilitate the establishment of technological and other collaborations between companies from both countries.

Similarly, India is seeking extensive cooperation with New Zealand on the supply chain front. Cooperation in the supply chain (creating mutual interdependence in raw materials, components, or equipment needed by various industries) was a key topic of discussion last week, led by Commerce Minister Goyal.

For this reason, India is prioritizing an FTA with New Zealand. According to Commerce Minister Goyal, an FTA with a small geographically diverse country like New Zealand would be a significant step forward for the Indian economy. This FTA will send a message to the world that India is open to business.

Why is New Zealand important ?

New Zealand is seen as one of the world's most developed and open countries from a business perspective, and as companies from there increase investment in India, this positive message will also reach other investors. The upcoming agreement will undoubtedly protect the interests of farmers and small and medium-sized entrepreneurs, but it will also open many doors of opportunity for them.

India's Ambassador to New Zealand, Neeta Bhushan, said, "New Zealand's importance to India has grown significantly in the changing global environment, and New Zealand is also very enthusiastic about its relationship with India. The prospective trade agreement will strengthen India's 'Act East' policy and forge strong partnerships in the Indo-Pacific region."

The warming of relations between the two countries is clearly reflected in bilateral trade, with our bilateral trade projected to increase by approximately 50 percent in 2024-25. Our trade could grow significantly in sectors such as agriculture, food processing, renewable energy, pharmaceuticals, education, and services.

New Zealand's trade with China

While this is significantly smaller than New Zealand's $40 billion bilateral trade with China, officials on both sides believe the situation could change significantly within a decade after an FTA. India aims to expand its access to Southeast Asian and Australian markets through this major Pacific Island economy. New Zealand will also benefit from a large market like India. This is why Goyal and McLay have repeatedly emphasized the need for an FTA that takes mutual interests into account.

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