At a time when developing and developed countries alike are navigating an increasingly unpredictable global trading regime, India is at a crossroads, fast emerging as a resilient player in international trade and as an increasingly reliable economic partner. The conclusion of the India-New Zealand Free Trade Agreement (FTA), announced by Prime Ministers Narendra Modi and Christopher Luxon on December 22, 2025, is a clear signal of this growing confidence. Coming soon after India’s FTAs with the United Kingdom and Oman, this agreement reflects a broader global shift toward diversifying trade partnerships and strengthening engagement with India. Domestically, the fast-tracked negotiations concluded within nine months, reflecting a political will to forge mutually beneficial global partnerships which concomitantly further India’s national goals and its global vision for a just, equitable and rules-based trading system.

Complementarity without compromise

Primed to be signed early next year, the India-New Zealand FTA emphasises services and labour mobility — areas where India enjoys a clear comparative advantage, but which have remained underleveraged in trade agreements. From both sides, there have been firsts, with India extending duty concessions on apples, and New Zealand offering India the widest service access so far, covering sectors such as IT, education, fintech, telecom, tourism and construction. There is also a commitment by New Zealand to invest $20 billion in India over 15 years.

Mobility provisions for skilled professionals in IT, engineering, health care, and education, and post-study work opportunities for Indian students, would increase the competitiveness of service providers, positioning India as a key supplier of high- and semi-skilled workforce. Moreover, amid policy unpredictability in several advanced economies posing headwinds for skilled mobility, they offer alternatives and stability for India’s youth and knowledge workers.

New Zealand has agreed to eliminate duties on 100% of its tariff lines, giving duty-free access to all Indian exports, while India has offered market access on 70% of its tariff lines. Benefits could accrue to India in labour-intensive sectors: textiles, apparel, leather, engineering goods, pharmaceuticals and farm products. Also, duty-free intermediate inputs such as wooden logs, coking coal, metal waste and scrap would lower manufacturing costs for final products, especially in steel, engineering goods and construction.

Inclusion of an annex on health and traditional medicine services creates new opportunities for India’s pharmaceutical and health-care sectors, giving them an edge over competitors such as China and the European Union. It would also reinforce India’s growing role as a global health partner.

Agriculture, often a sensitive area in trade negotiations, has been handled with balance. The FTA envisages value chain development through knowledge transfers and agri-technology collaboration on apples, kiwifruit, and honey. The livelihood of farmers, however, will not stand compromised since no duty concessions have been made in dairy, sugar, spices and edible oils.

Challenges in optimal utilisation

Overall bilateral trade, which was approximately $2.4 billion in 2024-25, is projected to double by 2030, post implementation of the FTA. However, it must be heeded that the success of any FTA lies in how it is utilised. In the past, India has exhibited a low utilisation rate of only about 25%, as in contrast with developed economies touching 70%-80%. FTAs often remain underused due to awareness gaps, compliance challenges, and non-tariff barriers (NTBs). However, the India-New Zealand FTA has provisions to address technical barriers to trade through enhanced regulatory cooperation, streamlined customs procedures and transparency.

Once implemented, the Confederation of Indian Industry (CII) recommends optimally leveraging the trade pact, with business associations, large enterprises and policymakers sharing responsibility to build awareness and developing capabilities to translate the negotiated benefits into effective market access. They should also look beyond tariffs and expand services trade, deepen skills and education linkages, and leverage mobility and diaspora networks.

A strong foundation exists

The FTA can build on the strong foundations of a growing middle class, a skilled workforce, and a reform-driven, innovation-based Indian economy. It carries elements of global integrated production and service export growth (India already ranks among the top five globally), both of which can propel Indian firms up global value chains and towards the $7 trillion economy goal by 2030. Notably, with the India-New Zealand FTA deal, India has now concluded economic partnership agreements with all Regional Comprehensive Economic Partnership (RCEP) members, except China.

Notwithstanding the modest quantum of bilateral trade, the significance of the India-New Zealand FTA lies not just in trade data. Rather, it marks a coming of age in the way India is viewed on the world stage. The kind of access in terms of labour mobility and services that New Zealand is willing to extend to India, reflects growing strategic trust from developed economies in bilateral economic engagements. This is a particularly welcome development amid India’s trade talks with other partners, including the European Union, lending credence to India as a country with a stable trade policy, and capable of establishing norms of effective cooperation through balanced, high-quality agreements that protect domestic interests while promoting openness and growth.

Chandrajit Banerjee is Director General, Confederation of Indian Industry (CII)

Published – December 31, 2025 12:08 am IST

Union Finance Minister Nirmala Sitharaman chairs the ninth Pre-Budget Consultation with the experts from the Infrastructure, Energy and Urban Sectors in connection with the forthcoming Union Budget 2025-26, in New Delhi.
| Photo Credit: ANI

Ahead of the upcoming Budget, industry bodyConfederation of Indian Industry (CII) on Sunday (January 12, 2025) suggested a 10-point agenda to drive ease of doing business reforms, aimed at reducing compliance burden, simplifying regulatory frameworks, and improving transparency.

Among the “urgent policy interventions”, the industry body has recommended that all regulatory approvals – central, state and local levels – must mandatorily be provided only through the National Single Window System.

It has also pitched for expediting the process of dispute resolution by improving the capacity of courts and placing greater reliance on alternative dispute resolution (ADR) mechanism.

For streamlining environmental compliances, CII said, a unified framework could be introduced, which consolidates all requirements into a single document.

Emphasising that easy access to land is important to facilitate new or expanding businesses, it said that states may be incentivised to develop an online integrated land authority with an objective to streamline land banks, digitise and integrate land records, provide information on disputed land and guide necessary reforms.

To assist industry in land acquisition across nation, the India Industrial Land Bank (IILB), which provides information on land across majority of states, can be evolved into a national-level land bank, with dedicated central budget support, it said.

While India has over the last decade remained focused on improving ease of doing business (EoDB), there is a need to maintain the momentum, especially in certain specific areas, the CII stated.

CII Director General Chandrajit Banerjee said, “Simplifying regulatory frameworks, reducing compliance burdens, and enhancing transparency should continue to remain our focus agenda for next several years. Compliances for industry related to various areas such as land, labour, dispute resolution, paying taxes and environment offer a vast scope for reduction, vital for boosting competitiveness, driving economic growth and employment generation.” To ensure timely processing of industry applications and delivery of services from the central ministries, an Act, imposing statutory obligation on all public authorities for time-bound delivery of services and redressal of grievances, could be passed, with provision of deemed approval beyond the prescribed timeline, CII suggested.

It stressed that the scope of the National Judicial Data Grid (NJDG), which has been set up to identify, manage and reduce pendency of cases across the courts, needs to be expanded to include the data of tribunals, which constitute substantial chunk of pendency of cases in the system.

Arguing that labour compliances continue to be extensive and arduous and await the implementation of the four labour codes, it called for the scope of the Shram Suvidha Portal, which facilitates integrated compliances in just a few select central Acts, to be expanded to function as a centralised portal for all central and state labour laws compliances.

Asserting that improving trade facilitation is important, it said there is a need to make the Authorized Economic Operator (AEO) programme, which allows numerous priority clearances to members, could be made more attractive and easier to join, it noted as part of the 10-point agenda.

Flagging the “high and rising pendency of tax disputes” as a major issue, CII said there is a need to minimise income tax litigation by unclogging the pendency at the level of Commissioner of Income Tax (Appeals) and improving the effectiveness of ADR mechanism such as Advance Pricing Agreement, Boards for Advance Rulings and Dispute Resolution Scheme, as part of the EoDB reforms.

Sanjiv Puri, Chairman and Managing Director, ITC Ltd, and President of CII, addresses a press conference, in New Delhi on June 13, 2024.
| Photo Credit: ANI

Industry body CII on Thursday made a case for pushing reforms in sectors like land, labour, and agriculture by the Modi 3.0 government to accelerate economic growth estimated to be around 8% in FY25.

CII President Sanjiv Puri said several policy interventions in the past put the economy on “a much stronger wicket”.

“The growth rate is poised to touch 8% during the current year, marking the fourth consecutive year of above 7% growth.

“The growth estimate hinges critically on addressing unfinished reform agenda on priority, in addition to improvement in world trade prospects aiding our exports, twin engines of investment and consumption doing well and expectations of a normal monsoon among other factors,” Mr. Puri added.

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Expressing optimism regarding the economy’s performance, he said, “Very clearly, we are expecting all three sectors of the economy – agriculture, services and industry – to fire and do well next year.” Mr. Puri added that CII expects inflation to be between 4-4.5% in FY25.

Addressing his first press conference after becoming CII President, Mr. Puri, Chairman & MD, ITC Ltd, said private sector investment, which has been an area of concern, was robust and broad-based across sectors.

“Private sector investment has been an area of concern sometime back, but the good news today is that it is in the right trajectory… it is robust. It had dropped to 20.7% of GDP and it is now at 23.8%, which is more than the pre-Covid levels,” Mr. Puri said.

About the outlook for rural consumption, Puri said, “We certainly see green shoots of pick up in rural (demand)… the expectation for a good monsoon and better crop yields leading to improved realisations that augurs well for the rural economy.”

The industry body has also suggested rationalisation of rates with three slabs and inclusion of sectors like petroleum and real estate that are presently out of its ambit, besides infrastructure status for the hospitality sector.

“As far as GST is concerned, what we are saying there can be three slabs and there are areas like petroleum real estate that are outside the ambit… be included in the GST,” Mr. Puri said.

On reforms related to land, he said CII suggests a moderation in stamp duty to lower the cost of acquisition for economic activity and improvement in efficiency with measures like setting up of a state-level land authority and digitisation of the procedures.

Mr. Puri outlined a 14-point agenda for the new government for driving the next phase of economic transformation.

Many of the next generation reforms lie in the state and concurrent domains and require tough consensus building to take them forward, he said, adding that the inter-state institutional platforms on the lines of GST councils can be created.

Employment-linked incentive (ELI) schemes with appropriate outcome indicators can be launched for labour-intensive sectors with high growth potential such as toys, textiles and apparels, woods-based industries, tourism, logistics, among others.

The ELI scheme can also address the low female participation rate by giving a higher incentive for hiring of female labour.

Besides, an international mobility authority should be set up to track employment opportunities in other countries and facilitate Indian youth to benefit from these opportunities, Mr. Puri said.

“Priority should be given to further easing the regulatory and compliance burden through simplification, rationalisation and decriminalisation of regulatory approvals and compliances, time-bound clearances using the National Single Window System, strengthening alternate dispute redressal system and adoption self-declaration/third party certification and deemed approvals, wherever feasible,” it stated.

It also recommended interventions in the areas of land, power and logistics to reduce the cost of doing business.

CII also pitched for tax reforms to continue to help boost the investment climate. On direct taxes, the government may consider laying down a roadmap for rationalising and simplifying the capital gains tax and the TDS provisions, the CII chairman added.

Former president Ram Nath Kovind, chairperson of the High Level Committee (HLC) on One Nation One Election, being greeted by a delegation of Confederation of Indian Industry (CII) before the fifth meeting of the committee, in Jodhpur, on Feb. 3, 2024.
| Photo Credit: PTI

Expressing its support to simultaneous elections that would synchronize the electoral cycles at the central and state levels, industry body CII said ‘One Nation One Election’ would enhance governance efficiency, and foster economic development.

The Confederation of Indian Industry (CII) presented its views to the High-Level Committee on One Nation One Election (ONOE) on Friday. The High Level Committee on One Nation One Election, chaired by former President Ram Nath Kovind held its fifth meeting.

“CII’s view was based on the economic benefits of streamlining the electoral process, that would enhance governance efficiency, and foster economic development,” the industry body stated.

It argued that asynchronous multiple elections lead to frequent disruption in policy making and administration, leading to uncertainty about the government’s policies.

“It also affects the working of the Government due to its officials being roped in for election duties. Investment decisions by the private sector tend to slow down prior to the elections,” said CII.

“Further, it leads to delays in project implementation, as the Model Code of Conduct gets imposed,” it added.

The industry body emphasised that simultaneous elections, thus, offer a propitious solution by effectively reducing the project implementation delays and a likely cost savings of approximately half the total expenses incurred by the Central and State governments in administering elections.

Chandrajit Banerjee, Director General, CII, said, “In view of both the economic losses and the slowdown in policy-making CII suggests that India should revert to cycle of simultaneous elections.”

“CII believes there are two options of doing this ‘one is a single five-year cycle and the other is a two-stage simultaneous election with a gap of at least 2.5 years between the Lok Sabha elections and the state elections in the interim period”.

Chandrajit Banerjee. Photo: Special Arrangement

The first Budget of the Amrit Kaal [golden age] made a visionary and bold statement for bolstering the near-term and medium-term growth potential of the economy. The Finance Minister deserves compliments for delivering a sagacious Budget which had the right ingredients for strengthening the domestic demand drivers in the near term, without compromising on the fiscal prudence path. The Budget did well to lay down an ambitious road map for guiding India’s growth in the Amrit Kaal period through its focus on inclusive development, prioritising green growth, urban upgradation, strengthening financial sector prowess and digital infrastructure.

With the headwinds facing global growth this year, it was imperative to give both consumption and investment the requisite boost to support growth. The Budget did not disappoint on this front.

One of the key highlights of the Budget was the continued improvement in quality of expenditure led by a thrust on capital spending for the third year in a row. The sharp 33% rise in capital spending budgeted for 2023-24 is in line with CII’s suggestion and lends credence to government’s vision of improving the economy’s growth potential through a push to overall productivity of the economy and creation of jobs. Indeed, this implies that share of capital spending in total expenditure will rise to 22.2% as compared to an average of 13.3% in the pre-pandemic period. It is notable to mention here that the meteoric 71% rise in railway outlay budgeted in 2023-24 is also likely to augment the capex rise.

In line with CII recommendation, the continuation of the performance driven ₹1 lakh crore interest-free loans scheme for State capex in the next fiscal is a welcome move and will pave the way for greater participation of States in the nation-building process.

At a time when there are incipient signs of recovery in private investments, higher public capital expenditure was crucial to crowd in private investments and catalyse a more broad-based recovery in private investments. It is notable to mention here that the capex thrust of the government over the last few years has been visionary, with its capex spending to GDP ratio leapfrogging to 3.3% in 2023-24 from long-term average of 1.7 per cent of GDP (2008-09 to 2019-20).

The other critical growth driver apart from investment which has got support in the Budget is consumption. It is well known that consumption demand remains one of the highest contributors to India’s GDP at around 60% and thus is critical for economic recovery as we emerge from the challenges posed by the global uncertainties. High frequency data suggest that consumption demand has started to recover mainly on release of pent-up demand. However, with the pent-up release of demand likely to have a finite life, the support to consumption extended through rationalisation of personal tax rates will go a long way in increasing disposable income of the common man and is indeed a welcome move.

The rise in capex is expected to be supported by trimming of the huge subsidy bill which is budgeted to come down by over 28% coupled with a healthy 22% growth in gross tax revenue in the next fiscal. This has helped the government to balance the spending needs for supporting growth and the need for fiscal stability very well. CII has been suggesting a gradual glide path for fiscal consolidation, to not stifle growth impulses and preserving macroeconomic stability. Thus, the paring of the fiscal deficit to 5.9% of GDP for 2023-24 from 6.4% of GDP in 2022-23 and following of a glide path to bring it down below 4.5% by 2025-26, is a prudent move in line with CII suggestions. Fiscal discipline translates into fiscal stimulus for all sections of the economy through lower interest rates.

Further, the Budget laid down a strong agenda for boosting the rural economy, which is home to two-thirds of population, and is looking for steps to improve incomes and push demand. In this regard, the move to set up Digital Public Infrastructure for agriculture which will enable inclusive farmer-centric solutions through relevant information services for crop planning, access to farm inputs, credit and insurance is a welcome step. It will increase efficiency gains in agriculture, thus improving farmer incomes.

In addition, the slew of measures to improve the ease of doing business through reduction in compliances, adopting PAN as a single business identifier, and introduction of Digi Locker are noteworthy. They will go a long way in improving the overall competitiveness of the Indian economy.

Overall, through a wide-ranging array of landmark policy measures, the Union Budget 2023-24 has retained its focus on growth, while maintaining fiscal discipline. While cushioning the growth recovery over the immediate time horizon, the measures are also expected to lay a solid foundation for charting economy’s ascent over the next 25 years.

Chandrajit Banerjee is Director General, Confederation of Indian Industry