India-New Zealand FTA set to Double trade, boost jobs and exports

India and New Zealand have concluded a comprehensive Free Trade Agreement (FTA), marking a significant step in strengthening bilateral economic ties and expanding trade and investment opportunities between the two countries.

New Zealand Prime Minister Christopher Luxon termed the agreement a landmark deal, highlighting its potential to generate jobs, expand exports and drive long-term economic growth. He noted that New Zealand’s engagement with India, the world’s fastest-growing major economy, has been a strategic priority since his government took office, culminating in what he described as a high-quality and trusted trade partnership.

The FTA, concluded on December 22 , stands out as one of the swiftest trade pacts negotiated by India in recent years . Talks were formally launched in March 2025 and completed within less than a year , an unusually short timeframe for a comprehensive agreement covering goods, services, mobility and investment. While India has closed a few trade deals faster, most notably with the UAE several other negotiations with major partners have stretched over many years due to complex market access and regulatory issues. The rapid conclusion of the New Zealand agreement underscores strong political commitment on both sides and sustained momentum through five formal negotiation rounds , supplemented by continuous in-person and virtual engagements. The pace and scope of the deal align closely with India’s long-term economic roadmap under Viksit Bharat 2047 , which prioritises export growth, global integration and resilient trade partnerships.

Under the agreement, New Zealand has eliminated tariffs on 100 per cent of Indian export tariff lines , granting full duty-free access to Indian goods. This move is expected to significantly benefit India’s labour-intensive sectors, including textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods and automobiles, enhancing their competitiveness in the New Zealand market.

India, in turn, has offered tariff concessions on approximately 70 per cent of its tariff lines , covering about 95 per cent of current bilateral trade value . While a large share of New Zealand exports to India will see immediate or phased tariff elimination, India has retained protections on sensitive sectors to safeguard domestic interests.

To protect farmers and vulnerable industries, India has excluded key items such as dairy products, select agricultural commodities, edible oils, sugar, onions and certain metals and minerals from tariff concessions. These safeguards ensure that domestic producers are shielded from sudden import surges while allowing broader trade liberalisation.

A major highlight of the agreement is enhanced mobility for skilled Indian professionals . New Zealand will allow up to 5,000 skilled Indian workers to be employed at any given time under temporary employment entry arrangements, translating to nearly 1,600 employment opportunities annually in sectors such as information technology, healthcare, engineering, education and construction.

The FTA also strengthens pathways for Indian students and young professionals through expanded post-study work options and a dedicated working holiday visa programme, reinforcing people-to-people and talent linkages.

Bilateral trade in goods and services between India and New Zealand currently stands at around US$2.4 billion . With the removal of trade barriers and improved investment conditions, officials on both sides expect bilateral trade to double over the next five years . New Zealand has also signalled strong investment interest in India, with projected capital inflows aimed at sectors such as infrastructure, renewable energy, agri-tech and manufacturing.

Beyond trade volumes, the FTA establishes a long-term economic partnership focused on innovation, MSME participation, agricultural productivity and resilient supply chains. For India, the agreement strengthens its economic footprint in the Indo-Pacific region, while for New Zealand, it opens doors to one of the world’s largest and fastest-expanding consumer markets.

Officials from both countries believe the agreement will deliver durable economic benefits and position India-New Zealand relations on a stronger commercial footing in the years ahead.