India and New Zealand concluded a landmark Free Trade Agreement after nine months of negotiations, with Prime Ministers Modi and Luxon describing it as a historic and mutually beneficial pact to deepen economic and strategic ties.
Both sides aim to double bilateral trade within five years and attract around $20 billion in New Zealand investments into India over the next 15 years.
Cooperation expands across trade, services, agriculture, education and people-to-people links.
India and New Zealand on Monday finalised a Free Trade Agreement (FTA), marking a major milestone in efforts to deepen bilateral economic and strategic ties.
FTA negotiations were launched during New Zealand Prime Minister Christophe Luxon’s visit to India in March 2025. The leaders said the deal’s conclusion in a record nine months underscored strong political commitment and a shared resolve to expand cooperation between the two countries.
Prime Minister Narendra Modi held a telephone conversation with Luxon, during which the two leaders jointly announced the conclusion of what they described as a historic, ambitious and mutually beneficial agreement.
They said the agreement would strengthen bilateral economic engagement by improving market access, stimulating investment flows and reinforcing strategic cooperation, while opening new opportunities for innovators, entrepreneurs, farmers, micro, small and medium enterprises, students and youth across a wide range of sectors in both nations.
Both sides expressed confidence in doubling bilateral trade within five years and projected New Zealand investments of around $20 billion into India over the next 15 years.
"The gains are wide-ranging and significant," said Luxon in a statement.
"India is the world's most populous country and is the fastest-growing big economy, and that creates opportunities for jobs for Kiwis, exports and growth," he added.
Modi and Luxon also welcomed progress in collaboration in areas such as sports, education and people-to-people exchanges, and reaffirmed their commitment to further strengthening the India–New Zealand partnership. They agreed to remain in close contact as ties enter a new phase following the FTA’s conclusion.
Under the comprehensive and forward-looking agreement, New Zealand will eliminate tariffs on 100 per cent of its tariff lines, providing duty-free access for all Indian exports. This is expected to significantly enhance India’s export competitiveness and integration into global value chains. India has committed to tariff liberalisation across 70 per cent of tariff lines, covering 95 per cent of bilateral trade.
Formal negotiations began on March 16, 2025, during talks between Commerce and Industry Minister Goyal and New Zealand’s Minister for Trade and Investment Todd McClay.
"Concluded in just nine months, this historic milestone reflects a strong political will and shared ambition to deepen economic ties between our two countries," Modi said in a social media post.
The agreement was concluded after five formal negotiation rounds, along with multiple in-person and virtual inter-sessional discussions. Goyal said the agreement was about “building trade around people and launching opportunities—for our farmers, entrepreneurs, students, women and innovators.” He added that it would enhance agricultural productivity and farmer incomes, expand regional opportunities for Indian businesses and create global learning and employment avenues for Indian youth.
With 100 per cent duty-free access, labour-intensive sectors such as textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods and automobiles are expected to witness a sharp increase in exports. These gains are likely to directly benefit workers, artisans, women, youth and MSMEs through deeper participation in international value chains. To safeguard domestic farmers and industry, market access excludes sensitive products including dairy, coffee, milk, cream, cheese, yoghurt, whey, caseins, onions, sugar, spices, edible oils and rubber.
The FTA delivers New Zealand’s most ambitious services commitments in any trade agreement so far, with India securing access in high-value sectors such as IT and IT-enabled services, professional services, education, financial services, tourism, construction and other business services. It also incorporates a future-ready mobility framework, easing entry and stay norms for Indian professionals, students and youth.
A new Temporary Employment Entry Visa pathway will allow up to 5,000 Indian professionals at any given time to work in New Zealand for up to three years, covering roles such as AYUSH practitioners, yoga instructors, Indian chefs and music teachers, as well as high-demand sectors including IT, engineering, healthcare, education and construction.
Commerce Secretary Rajesh Agrawal described the agreement as “a new-generation trade agreement built on tariffs, agricultural productivity, investment and talent”, noting that India’s strengths in exports and services would support labour-intensive growth, while New Zealand would benefit from predictable access to India’s large and expanding market. In agriculture, dedicated agri-technology action plans for kiwifruit, apples and honey will focus on productivity enhancement, research collaboration, quality improvement and value-chain development, strengthening domestic capabilities and supporting income growth for Indian farmers.
Bilateral merchandise trade between India and New Zealand stood at $1.3 billion in 2024–25, while total trade in goods and services was estimated at about $2.4 billion in 2024.
The FTA also comes in the light of India navigating various channels in an attempt to diversify its exports after the United States imposed a 50 per cent tariff on Indian goods entering U.S. markets.
(with inputs from Reuters and The New Indian Express)
