India and New Zealand Advance its FTA Talks and Aviation Partnerships, Boosting Trade, Tourism Mobility and Economic Growth with More Direct Flights by 2028

The industry minister of India, Piyush Goyal, during his official trip to New Zealand, met the new chief executive officer of Air New Zealand, Nikhil Ravishankar, and discussed the FTA negotiations and possible improvements in the aviation links between the two countries. The fourth round of FTA negotiations held in Rotorua and Auckland highlighted key areas of mutual interest in both countries and emphasized that aviation connectivity would be key in developing deeper economic, trade, and tourism links between India and New Zealand.

India and New Zealand’s Growing Economic Relationship

As part of the discussions, Minister Goyal emphasized the constructive engagement between both countries during the FTA talks, which spanned five days. The focus was on establishing a sector-specific agreement that strengthens the economic relationship while addressing sensitive issues without compromising either nation’s interests. India’s merchandise trade with New Zealand saw significant growth, with figures for fiscal year 2024-25 reaching around USD 1.3 billion, a remarkable 48.6% increase compared to the previous year.

This growth in bilateral trade sets the stage for enhanced economic cooperation through the FTA, which could open up new opportunities in sectors such as dairy, agriculture, food processing, and aviation services. The strong momentum in trade, with both nations showing meaningful increases in exports to each other, points to the significant potential for future growth. India, with its expanding manufacturing, textiles, pharmaceuticals, and agri-commodities sectors, stands to benefit greatly from this deeper engagement.

Aviation as a Catalyst for Trade, Mobility, and Tourism

A key focus of the discussions was the role of aviation in facilitating trade, improving mobility, and driving tourism between the two countries. Ravishankar underlined Air New Zealand’s strategic position as a platform for Indian businesses, particularly those seeking to test products and services in the New Zealand market before scaling globally. The airline’s performance, linked to the overall economic health of New Zealand, has significant implications for both the national economy and trade relationships.

The talks also highlighted India’s expanding aviation sector, with plans for direct flights between Air India and Air New Zealand by 2028. This new connectivity is expected to enhance regional connectivity, support trade flows, and foster greater mobility for people, goods, and services between the two nations. Minister Goyal noted that this aviation partnership could serve as a key vehicle for driving economic recovery and creating business opportunities in both countries.

From a tourism impact perspective, the introduction of direct flights between India and New Zealand will be a game-changer, providing easier access for tourists from both countries to visit the other. For India, this will mean increased tourism to New Zealand, which is renowned for its stunning landscapes and adventure tourism offerings. For New Zealand, the easier access to India will open up vast markets of Indian travelers seeking unique cultural, heritage, and leisure experiences. This expanded tourism mobility is expected to increase not just the number of visitors but also tourism revenue in both nations.

Strategic Partnerships: A Shared Vision for Growth

Air New Zealand’s current challenges, including a forecasted pre-tax loss of NZD 55 million due to grounded aircraft and rising maintenance costs, underscore the importance of strategic partnerships with nations like India. Ravishankar’s leadership comes at a pivotal moment as the airline works to navigate these challenges while contributing to New Zealand’s broader economic recovery.

The performance of Air New Zealand is closely tied to the country’s economic fortunes. When the airline prospers, it helps drive broader economic growth, particularly in areas related to tourism, trade, and logistics. As the airline continues to recover and expand its global reach, India’s improved access to the New Zealand market and enhanced aviation links will play a vital role in strengthening supply chains and boosting export potential for a wide range of sectors, including tourism.

Economic and Tourism Gains: The Potential Impact of the FTA and Aviation Ties

India stands to benefit significantly from improved access to New Zealand’s markets, particularly in sectors such as dairy, agriculture, and aviation services. With bilateral trade already on an upward trajectory, the FTA and enhanced aviation ties are expected to fuel supply-chain resilience and create new opportunities in manufacturing, pharmaceuticals, and other export-driven industries.

From tourism’s perspective, this deeper trade relationship and the upcoming aviation linkages are expected to result in a substantial boost in travel between the two countries. Indian tourists will have better access to New Zealand’s world-class adventure tourism, eco-tourism, and nature-based experiences, while New Zealand’s growing interest in India’s rich cultural and heritage tourism will open up new avenues for inbound tourism. This could also increase New Zealand’s share in India’s outbound travel market, especially among youth travelers and adventure seekers.

Additionally, the tourism services sector, which includes hospitality, guided tours, and cultural experiences, stands to benefit as both countries see a rise in tourism traffic. More travelers will create opportunities for both nations to expand tourism infrastructure, offering enhanced experiential tourism offerings for international visitors.

Future Outlook: A Stronger Bilateral Relationship with Tourism at the Forefront

Both the FTA between India and New Zealand, and the enhanced aviation partnerships are foreseen to elevate this bilateral relationship into one of the most dynamic and mutually rewarding economic relationships in the Asia-Pacific region. As both countries further deepen their trade and tourism links, the FTA will provide a basis for continued economic growth and new opportunities in agriculture, aviation, and other key sectors.

A comprehensive trade agreement that would lead to further investment by both sides, with India’s growing economy and New Zealand’s comparative advantage in agriculture, dairy, and high-value exports, will position both countries to better capture new opportunities, particularly in tourism and aviation services.

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