As the ink dries on the landmark Free Trade Agreement between New Zealand and India, Nelson Tasman’s heavy hitters in sectors who could benefit most are optimistic.
Signed in New Delhi by Trade Minister Todd McClay on 27 April, the deal is said to lead to more jobs and higher incomes for Kiwis, and eliminating or reducing tariffs on 95 per cent of New Zealand’s exports to the nation of 1.4 billion people.
Eventually, 82 per cent of exports will be tariff-free, with 57 per cent becoming duty-free from the day the deal is implemented after its examination by Parliament’s Foreign Affairs, Defence and Trade Committee.
Seafood, forestry and wood product exporters are emerging as key beneficiaries, with price previously the main barrier to accessing the Indian market.
Along with sheep meat and wool, those exports will benefit from deep tariff cuts, according to the government.
Sealord chief executive Doug Paulin says while 33 per cent tariffs on seafood will remain initially before being phased out over seven years, India represents an exciting future market as its middle class continues to grow.
“It will introduce a new and growing market for us, with more diversification for some of our products,” Doug says.
“Traditionally, seafood isn’t a big part of Indian cuisine aside from locally caught shrimp. However, it is highly likely that more premium seafood options will enter the market, including more New Zealand seafood, as the demographic becomes more affluent.”
Nelson Pine Industries chief executive Kai Kruse says the company currently exports a “relatively small amount” of processed wood products to India, but lower tariffs will benefit both exporters and consumers.
“Every little bit helps. Like other businesses and private consumers, we are heavily impacted by the current economic situation,” Kai says.
“The Free Trade Agreement is the right direction, but to really see the final outcome and consequences, that still needs a few more months.”
Port Nelson chief executive Matt McDonald says while it is still early days, the port supports any agreement that positively impacts trade, strengthens supply chains and delivers long‑term value for customers in the region.
Under the agreement, tariffs on wine will be reduced from 150 per cent to either 25 or 50 per cent, depending on the value of the wine, over a decade.
Nelson Winegrowers Association chair Blair Gibbs says Nelson is a small but significant wine‑producing region with several export‑led businesses, but opportunities in India will take time to mature.
Horticulture is also emerging as a winner.
Apples will receive a 50 per cent tariff reduction within a large quota, while kiwifruit will gain duty‑free access within a quota almost four times recent average export volumes.
Tariffs outside the quota will be slashed by half.
The boss of Motueka‑based apple, pear and kiwifruit exporter Golden Bay Fruit, Evan Heywood, says India’s growing middle class aligns well with the opportunities created by the agreement.
“In tough economic times it is very important to have a diverse base of markets. Markets perform differently from year to year, and we need a broad range so we can optimise where our fruit goes and maximise grower returns,” Evan says.
“As we saw with New Zealand’s Free Trade Agreement with China eight years ago, it will take time to develop the Indian market, but hopefully we see the same growth pattern. China is currently our largest market.”
The agreement could also translate into more employment opportunities, with Evan saying increased market access would drive demand at orchard and post‑harvest levels.
A Riwaka orchardist, who did not want to be named, says interest from Indian importers has steadily grown in recent years and the new deal represents a “positive shift”.
“It’s great to see this market continuing to open up. Having more attractive destinations for our apples supports local jobs and gives us the confidence to keep investing and growing,” the orchardist says.
“For us as growers, that means more choice and more certainty. It also helps spread risk, so if another market tightens or closes due to biosecurity, political changes or other factors, we still have strong options for placing our fruit.”
