India and New Zealand have started negotiations for a free trade agreement, as exporters from the South Pacific nation hope to clinch significant orders from one of the fast growing economy in Asia.
India gave the go-ahead for the meeting and Indian commerce minister, Anand Sharma, who is in Davos Switzerland to attend a meeting of trade ministers, met with New Zealand's trade minister Tim Groser to kick off the free trade negotiations.
The New Zealand government had approved in March to begin negotiations with India but the Indian government approval came last week, since it was delayed by India's mid-year election in 2009.
New Zealand, which exports coal, timber, wool and hides to India, exported goods worth $442 million last year-an increase of 16 per cent and is projected to grow 8 per cent in 2010.
Currently, India is New Zealand's 13th largest export destination and is already one of the fastest-growing markets, with New Zealand having tripled its exports over the last four years, a major increase coming from the export of coal, milk powder and logs.
New Zealand has free trade agreements with Singapore, Thailand China and Malaysia, and is currently negotiating similar agreements with South Korea and India.