Trade Ties Strengthened as India–New Zealand FTA Concludes
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- Last Updated: 23 Dec 2025 at 11:50 AM IST
On December 22, 2025, India and New Zealand formally concluded talks on a bilateral Free Trade Agreement (FTA). The FTA aims to expand commerce, investment, and people-to-people links between the two countries. The announcement came after nine months of talks that began in March this year.
The pact was formally agreed upon following a phone call between Prime Minister Narendra Modi of India and Prime Minister Christopher Luxon of New Zealand. The final text is set for signing in early 2026 following legal review, with enforcement later in the year.
Trade and Market Access Provisions
As per the negotiation, India will enjoy duty-free access for 100% of its exports. This means whether it is textiles and apparel or engineering products and seafood, exporters do not have to pay any tariff to trade in the New Zealand market. The removal of duties is intended to support labour-intensive sectors and boost competitiveness.
For New Zealand, tariffs will be eliminated or reduced on about 95% of its exports to India, making it one of the most extensive market access concessions in any Indian trade pact. Around 57% of New Zealand’s exports will receive duty-free access immediately. The percentage will reach 82% when the agreement comes into full force. The remaining 13% is subject to tariff cuts.
The agreement covers goods, services, investment, regulatory cooperation, and mobility provisions. It also includes measures to streamline customs processes and reduce non-tariff barriers that can impede trade.
Investment and Services
New Zealand will invest USD 20 billion in India over the next 15 years. When it comes to services, the FTA aims to open up better opportunities for professionals and companies in IT, finance, tourism, and education.
One notable provision relates to mobility: the FTA includes temporary employment entry visas for professionals and work-and-holiday schemes for youth. Indian students and professionals are also expected to see eased pathways for work and study, reflecting both nations’ interest in strengthening human capital links.
Sectoral Impact of India New Zealand Trade Negotiations
Many Indian sectors are poised to see near-term benefits from duty-free access to the New Zealand market. Key beneficiaries include textiles, apparel, leather goods, marine products, gems and jewellery, engineering goods, and automobiles. The pace of growth in these sectors will depend on how quickly exporters can scale up production and meet market-specific standards.
New Zealand exporters in areas such as sheep meat, wool, forestry products, coal, and certain horticultural goods are set to gain from lower tariffs as well. Certain seafood items will receive duty-free access over a staged period.
Despite broad tariff liberalisation, India chose to exclude a number of sensitive agricultural products, including key dairy items, from tariff cuts. However, the agreement allows New Zealand firms to engage in dairy processing in India for re-export. The purpose? Offering protection to domestic dairy producers by balancing market access.
Broader Strategic Context of the Free Trade Agreement
In 2024, bilateral trade between India and New Zealand stood at around USD 2.4 billion, of which USD 1.3 billion was accounted for by merchandise trade. The governments of the two countries are confident that the FTA will double trade within five years through lower tariffs, improved market access, and higher investment.
For India, this agreement represents the third major free trade pact concluded in 2025, following earlier deals with Oman and the United Kingdom. The rapid completion of negotiations with New Zealand also reflects India’s strategy to diversify export markets and expand economic engagement beyond traditional partners at a time marked by global trade uncertainty.
For New Zealand, India represents a large and fast-growing market. Although India is not among New Zealand’s top ten export destinations today, the agreement offers preferential access that could help New Zealand exporters compete more effectively against producers from countries that already have trade agreements with India.
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