India - New Zealand FTA Signed, Strategic Signal, Limited Trade Impact

India and New Zealand on December 22 announced the conclusion of a Free Trade Agreement (FTA) , with Prime Minister Narendra Modi and New Zealand Prime Minister Christopher Luxon describing it as a catalyst for closer trade, investment and strategic ties. Modi said the pact reflected strong political will to deepen economic engagement, while Luxon highlighted long-term gains for Kiwi exporters and investors.

External Affairs Minister S. Jaishankar said the agreement places the partnership on an accelerated growth trajectory. The deal builds on the groundwork laid during Luxon’s March 2025 visit to India , when he arrived with the largest-ever New Zealand delegation to kick-start negotiations.

India exports pharmaceuticals, textiles, engineering goods, automobiles and IT services to New Zealand, while importing forestry products, wool, horticulture items, coal and limited dairy derivatives . India has not opened its core dairy sector , restricting concessions to minor inputs such as whey and lactose.

Despite its symbolism, the agreement is unlikely to significantly move the needle, as trade with New Zealand accounts for well under 1% of India’s global trade . The strategic relevance is clearer when seen alongside India’s broader trade agenda with the UK trade agreement concluded but yet to enter into force , negotiations continuing with the EU and the US , and trade ties with China remaining politically and strategically constrained.