New Delhi (TIP): India’s newly signed free trade agreement (FTA) with New Zealand has been positioned as a big opportunity for exporters, startups and global trade expansion.
But industry experts say the benefits will not be automatic, especially for smaller businesses.
Siddharth Shankar, Global COO at Komerz Ltd and a trade finance expert, believes the agreement could be transformative—but only for those who are ready to operate at global standards.
While the deal offers duty-free access for Indian exports, Shankar said tariffs were never the biggest hurdle for businesses. “Tariff elimination sounds like a silver bullet, but the uncomfortable truth is that most MSMEs won’t benefit automatically,” he said.
He pointed out that many Indian MSMEs still lack consistency and technological integration.
“Global value chains today are technology-led, compliance-heavy, and ruthlessly efficient,” he said.
“If an MSME can’t deliver predictable quality, data visibility, and supply-chain discipline, zero tariffs won’t save them.”
According to him, only a small segment of businesses is likely to benefit immediately.
“Where this FTA could be transformative is for the top 15–20% of MSMEs that are already investing in automation and traceability,” he added.
One of the standout features of the agreement is the fast-track mechanism allowing Indian firms to import raw materials from New Zealand duty-free, process them, and re-export.
But Shankar cautioned against overestimating its impact.
“Duty-free inputs alone won’t make India a global food processing hub. Discipline will,” he said.
He flagged key issues in India’s logistics and distribution systems.
“Many networks still operate with outdated infrastructure and inconsistent cold chains,” he said.
“That may work domestically, but it collapses under global scrutiny.”
He added that real transformation would require investment in traceability, automation and data-driven decision-making. The agreement also includes a commitment from New Zealand to invest $20 billion in India over the next 15 years.
Shankar called this a strong signal but warned founders against misusing capital.
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