Asymmetric tariff commitments in India's new-generation FTAs balance market access with protection of sensitive sectors. Discuss.

India's new-generation FTAs are deals with developed economies such as the UAE, Australia, EFTA, the UK and now New Zealand [4]. They rest on asymmetric tariff commitments: the partner opens almost fully, while India opens only selectively. The India–New Zealand FTA, signed in April 2026, shows how this design balances export gains with domestic safeguards [1].

Market access secured

• Full partner opening: New Zealand grants zero duty on 100% of its 8,284 tariff lines from entry into force [1][3].
• Gains for labour-intensive sectors: New Zealand had 5–10% duties on wool, man-made fibre, carpets and apparel. Removing them helps Indian textiles, handicrafts and handloom [2].
• Selective Indian opening: India liberalises 70.03% of its tariff lines, which cover about 95% of bilateral trade. These are mostly inputs that do not compete with Indian producers, such as wood, wool and raw hides [1].

Sensitive sectors protected

• Exclusion list (29.97% of lines): dairy (milk, cream, whey, yoghurt, cheese) is kept out [1]. This shields India's small dairy farmers from one of the world's leading dairy exporters.
• Calibrated tools: some tariffs are cut in phases over 3–10 years. Tariff-rate quotas on apples, kiwifruit and Mānuka honey protect orchard growers in Himachal Pradesh and J&K [1].
• Learning from the past: India's trade deficit with its FTA partners reached about USD 26.7 bn in Q2 FY25, up 23% year-on-year [5]. The same worry drove India's 2019 RCEP exit and explains today's guarded design.

Limitations

• Small base: India's exports to New Zealand are only about USD 0.65 bn [2]. Tariff cuts alone will not transform this trade.
• Thinner reciprocity: leaving out a partner's main export (dairy) makes the deal worth less to that partner. It may also harden demands in bigger talks with the EU or US.
• Utilisation gap: zero duty can only be claimed with a rules-of-origin certificate. Small exporters often find the paperwork costs more than the duty saved.
• Monitoring burden: the quotas work only if mandi prices are tracked and safeguards are used on time.

Asymmetric commitments thus let India gain market access while keeping farm livelihoods secure. To turn this design into results, India should publish utilisation data for each FTA, digitise certificates of origin and reach out more to MSMEs. Indian exporters' 79% utilisation of the India–Australia ECTA shows this can be done [6]. Such calibrated openness supports both Atmanirbhar Bharat and SDG 8 (decent work and economic growth).