NZ India FTA: Apple growers welcome reduced tariff, from 50% to 25%

Growers are welcoming the reduced tariff to India. Photo / Supplied

Hawke’s Bay apple growers are welcoming a reduced tariff of 25% to export apples into India, the world’s most populous country.

Hawke’s Bay grows about two-thirds of the country’s apples and the bulk of those are exported overseas.

The New Zealand-India Free Trade Agreement was officially signed on Monday night (NZ time) in New Delhi, resulting in reduced or removed tariffs for most New Zealand exports.

Exceptions include many dairy products, which still face high tariffs.

“Under the FTA, the existing 50% tariff on apples will be cut to 25% immediately [to India] for 32,500 tonnes of apples per year under a tariff rate quota, increasing each year to 45,000 tonnes per annum by year six,” a Ministry of Foreign Affairs and Trade spokeswoman said.

Apples need to enter India between April 1 and August 31 for the reduced tariff to apply, which is effectively the off-season for growing apples in India.

Apples exported outside that window or outside the allocated quota will still be subject to the 50% tariff.

Another clause in the trade agreement means apples with an import value of less than US$1.25/kg remain subject to the 50% tariff.

New Zealand, under the agreement, has also committed to an “action plan” to improve the productivity of Indian growers, such as helping to improve pest and disease control and productivity, orchard and harvest management.

There is a clause in the agreement that states the reduced tariff is subject to those commitments being met.

Hawke’s Bay Fruitgrowers’ Association president Brydon Nisbet said “growers are over the moon” about the trade agreement.

“When you have a 50% tariff that is huge; a 25% tariff isn’t exactly a free trade, but India is such a good potential market.

“Our industry is growing and they need other markets ... so it is a win for growers.”

India has overtaken China with a population of nearly 1.5 billion people, making it the most populous country in the world.

He said some New Zealand apples were currently being exported to India but only in small quantities, due to the high tariff.

“Now all exporters will be looking at putting certain varieties into India.”

Meanwhile, the tariff on kiwifruit has been reduced to zero for a certain quota (6250 tonnes), and 16.5% above that quota.

Nisbet said that was great news for kiwifruit growers.

John Loughlin, chairman of apple company Rockit Global, said the trade agreement was “incredibly positive”.

“At the moment, the New Zealand apple industry is very heavily dependent on China and Southeast Asia, so it adds a third leg to that,” he said.

“This is a huge opportunity for horticulture, apples particularly, but also kiwifruit, and it is also positive for our lambs, our sheep farmers on the hills of Hawke’s Bay.”

He said India was “rapidly” becoming more affluent, with a growing middle class.

“There is a real opportunity here for out-of-season fruit,” he said.

“This is access to what will be the biggest game in town in future.”

He said India did not have the same fruit storage capacity as New Zealand to offer out-of-season apples.