India, NZ seal historic FTA; huge boost for India’s leather and footwear sectors
LW Desk
India and New Zealand on Monday formalised a landmark Free Trade Agreement (FTA), aimed at eliminating trade barriers and providing a significant fillip to India’s labour-intensive sectors, particularly the leather and footwear industry.
The agreement was signed at Bharat Mandapam by Union Minister of Commerce and Industry Piyush Goyal and New Zealand’s Minister for Trade and Investment, Todd McClay. The deal, described as a "historic milestone" by New Zealand PM Christopher Luxon, grants duty-free access to 100% of Indian exports.
Key Highlights:
Zero Duty: India secures duty-free market access for all tariff lines, including leather, footwear, textiles, and gems.
Agra Advantage: The deal is expected to benefit Agra’s leather cluster, which accounts for 75% of India's leather exports.
Competitive Edge: Indian goods will now compete on a level playing field with New Zealand’s other FTA partners, removing previous tariffs of up to 10%.
The pact is a culmination of years of diplomatic engagement between PM Narendra Modi and his counterpart Christopher Luxon. Speaking to the media in Agra on Sunday, Goyal noted that the agreement would specifically empower the 'One District One Product' (ODOP) initiatives.
"The Indian goods will reach New Zealand markets without any tax or import duty. Besides other Indian cities, Agra will benefit immensely, with its leather industry and handicrafts finding a fresh international market," Goyal said.
The FTA is strategically positioned to support India's manufacturing backbone. By securing duty-free inputs for raw materials—including wooden logs and metal scraps—the deal is expected to lower production costs for domestic manufacturers.
Agra, home to nearly 5,000 MSME units providing employment to 4 to 5 lakh individuals, stands as the primary beneficiary. During a business meet in the city, industry leaders highlighted that Agra already dominates the national leather export share.
"We hope this agreement will enhance exports three to five times, assisting in establishing Agra as the world capital of footwear manufacturing," said Pooran Dawar, Chairman, Council for Leather Exports (CLE).
Previously, Indian exporters faced peak tariffs of up to 10% on key items like automobiles and ceramics. The removal of these duties ensures that Indian artisans, women entrepreneurs, and youth-led MSMEs can compete directly with global players in the New Zealand market.
Minister McClay termed the agreement a “once-in-a-generation” opportunity that would not only generate employment but also accelerate the development of new bilateral partnerships across the Indo-Pacific region.
