India and New Zealand have concluded negotiations on a comprehensive Free Trade Agreement (FTA), marking India’s 18th trade pact as it looks to accelerate exports, investment inflows and global market access. The agreement is expected to be formally signed within the next three months and implemented from next year.
Officials said the pact represents one of India’s fastest-negotiated FTAs with a developed economy and is aimed at significantly expanding bilateral trade, which currently remains modest relative to potential.
Key features of the India–New Zealand FTA
The agreement provides zero-duty market access for 100 per cent of India’s exports to New Zealand. In return, India has offered tariff liberalisation across around 70 per cent of tariff lines, covering nearly 95 per cent of bilateral trade value.
This move is expected to sharply improve competitiveness for India’s labour-intensive and export-driven sectors such as textiles, apparel, leather goods, footwear, marine products, gems and jewellery, handicrafts, engineering goods and automobiles. Pharmaceuticals, agricultural products and manufactured goods are also expected to gain from faster and cheaper access to the New Zealand market.
A notable feature of the agreement is its focus on mobility and employment opportunities. New Zealand has committed to a dedicated quota of 5,000 temporary employment entry visas for Indian professionals, along with 1,000 work and holiday visas, strengthening people-to-people ties alongside trade.
On the investment front, New Zealand has expressed intent to facilitate investments worth USD 20 billion into India over the next 15 years, particularly in sectors aligned with manufacturing, agriculture and sustainability.
Boost for agriculture and manufacturing
As part of agricultural cooperation, the agreement includes plans to establish Centres of Excellence in partnership with New Zealand to enhance productivity in apples, kiwifruit and honey. These initiatives aim to transfer best practices, technology and expertise to Indian farmers.
India’s manufacturing sector is also set to benefit from duty-free access to key raw material inputs such as wooden logs, coking coal, and metal waste and scrap, which could help reduce production costs and improve export competitiveness.
Beyond tariffs
The FTA goes beyond tariff reductions, incorporating provisions to tackle non-tariff barriers through enhanced regulatory cooperation. It also outlines collaboration in diverse areas including AYUSH, culture, fisheries, audiovisual tourism, forestry, horticulture and traditional knowledge systems, reflecting a broader strategic partnership.
Trade figures underline the scope for growth. Bilateral merchandise trade stood at USD 1.3 billion in 2024–25, while total trade in goods and services was around USD 2.4 billion in 2024, with services trade alone accounting for USD 1.24 billion.
With the agreement now moving toward signing, policymakers on both sides see the FTA as a platform to unlock untapped trade potential, strengthen supply chains and deepen long-term economic engagement between India and New Zealand.
