India's strong growth cushions impact of US tariffs, FTAs driving market diversification: IIFT VC

By Kaushal Verma
New Delhi, [India] December 23 (ANI): India's strong economic growth has helped cushion the impact of higher U.S. tariffs on key export sectors, allowing the country to remain resilient while accelerating free trade agreements to diversify markets, boost services exports and attract investment, Rakesh Mohan Joshi, Vice Chancellor of the Indian Institute of Foreign Trade (IIFT) told ANI.
"The Indian economy has performed well. Our growth of economy in the last quarter has been 8.2%," Joshi told ANI in an exclusive telephonic interview, adding that exports have largely held up despite global trade pressures.
On the ongoing tariff standoff with the United States, Joshi said, "India will show resilience. That I'm perfectly fine."
The United States remains a critical destination for Indian textile exports, particularly made-ups such as bed linen and bedsheets. "US is a big market for bedsheets, linen, and all these things," Joshi said. "So certain textiles, it's a big market especially for our bodily products."
However, Indian exporters face a significant tariff disadvantage compared with competing countries. "For us, the tariff is almost 50% or even more," Joshi said. He added that "countries like Vietnam, Bangladesh, and Pakistan, the tariff is much lower," at around 19-20%, putting pressure on India's labour-intensive textile sector.
Despite this, Joshi said India has adopted a diversification-led strategy. "So the strategy is basically the market and the product diversification, which I think India has done very impressively over this period of time, and then especially signing FTAs," he said.
A key part of that effort is the newly concluded free trade agreement with New Zealand. "I think it's a very expediently signed FTA, which we have concluded today with New Zealand," Joshi said. "This is a highly timely FTA that I think India has concluded."
Under the agreement, he said, "it will provide a zero-duty market access for 100% of Indian exports from day one." The deal is expected to benefit "textile and apparel, especially the labour-intensive sector, engineering and auto, pharma, gems and jewellery," he added.
India has retained safeguards for sensitive domestic sectors. "India could maintain its safeguard, especially to prevent our dairy industry," Joshi said. "We have also protected some of the plantation and the farming crop agriculture, which includes sugar, some spices, and edible oil has also been kept out of tariff cut."
At the same time, India has provided limited access to New Zealand products. "It gives market access to New Zealand in India, especially in the production in apples," he said. "Apples, we have got 50% of the duty, and some of the milk products, which is the milk albumin, and kiwifruit as well."
Joshi said the agreement would also attract investment and technology transfer. "The investment of $20 million, which is likely to come, would also come with a technology transfer," he said, adding that this would help improve productivity and processing, particularly in food processing. He noted that "India is the largest producer of milk in the world," while "New Zealand is the largest exporter of dairy products on earth."
Beyond goods, the FTA places strong emphasis on services and mobility. "It will facilitate the temporary employment entry visa for up to 5,000 Indian professionals to work in New Zealand for about three years," Joshi said, covering sectors such as IT, telecom and construction. Occupations such as "Ayush, yoga, Indian chef, music teacher, besides IT and healthcare worker" are also included.
Youth and student mobility form another pillar of the agreement. "The young Indians from 18 to 30 years of age would also get 1,000 working holiday visas in New Zealand," Joshi said.
On education, he added, "there is no numerical gap on number of the students who can study in New Zealand," and students would have "20 hours of work per week guarantee while studying."
He said "STEM bachelor's and master's graduates would get three years post-study work visas," while "doctoral scholars will get four years of work visa."
Joshi placed the New Zealand pact within India's broader trade strategy. "Very recently, we concluded the trade deal with the UK," he said, adding that negotiations with the European Union "seem that the EU trade agreement is also in the final stage." India has also signed an agreement with Oman and expects long-term investment under the India-EFTA pact.
India's approach to trade agreements has evolved, Joshi said. "We have completely transformed the way the FTAs are being signed," he said. "It is not only the merchandise case, but we are taking into consideration the services part of export, the movement of the people, and the investment."
Despite global uncertainty and protectionism, he expressed confidence in India's outlook. "I have no doubt that India would emerge as victorious in the international trade and international market," Joshi said. (ANI)