India, New Zealand sign free trade agreement to deepen economic ties
NEW DELHI: India and New Zealand signed a Free Trade Agreement (FTA) on Monday, a move expected to deepen bilateral economic ties through tariff cuts, expanded market access and enhanced services cooperation, ANI reported.
The deal was signed by India's Commerce and Industry Minister Piyush Goyal and New Zealand's Minister for Trade and Investment Todd McClay. Negotiations began in March 2025 and concluded in December 2025, taking nine months to move from talks to signing after earlier rounds had stalled, primarily over concerns related to India's dairy sector.
Under the pact, New Zealand has committed to invest around $20 billion in India over the next 15 years and has agreed to ease trade barriers and simplify standards and dispute-settlement mechanisms. Once implemented, the agreement is expected to deepen trade and investment flows and open new avenues for cooperation across goods, services and human capital.
Bilateral merchandise trade between the two countries has fluctuated in recent years, with India's exports and imports both showing periodic rises. Services trade has gained momentum, with India's services exports to New Zealand rising by about 13% to reach $634 million in 2024, while imports grew by around 7% to $611 million. Key Indian exports include pharmaceuticals, machinery, textiles and precious stones; imports from New Zealand are dominated by wool, metals, fruits, nuts and aluminium.
The FTA provides immediate tariff elimination by New Zealand on a large number of product lines. Currently, duties of roughly 10% apply to several Indian exports across categories such as textiles, leather goods, carpets, ceramics and automotive components; the removal of these barriers is expected to boost competitiveness. Agricultural exports, including tea, coffee and spices, are also likely to see improved market access.
India has offered market access on roughly 70% of tariff lines while keeping about 30% excluded. Tariffs will be eliminated immediately on nearly 30% of goods, while over one-third will see phased reductions. A small proportion will be subject to limited tariff cuts, and certain items will fall under quota-based concessions.
Several sensitive categories have been excluded from the agreement. Dairy products such as milk, cheese, butter and yoghurt have been kept out, reflecting India's domestic sensitivities. Other exclusions include certain animal products, sugar, oils, gems and jewellery, and some metals. Selected agricultural products such as apples, kiwifruit and manuka honey will be allowed under tariff rate quotas, enabling controlled imports while facilitating technology transfer and productivity improvements through cooperation initiatives.
On services, New Zealand has agreed to open over 100 sectors to Indian providers and to extend favourable treatment across a wider range of sub-sectors. India will liberalise more than 100 service segments for New Zealand, though preferential treatment will apply to a smaller subset. The agreement also includes provisions to ease the mobility of professionals and students: there will be no cap on Indian students, with extended post-study work opportunities in science, technology, engineering and mathematics fields, and up to 5,000 visas will be available at any time for skilled Indian professionals across sectors such as IT, healthcare, education, construction and traditional wellness fields.
The agreement must be ratified by both countries before it can be implemented. India will complete the process through executive approval, while New Zealand requires parliamentary clearance, which could take several months. Once ratified and operational, officials expect the FTA to substantially increase bilateral trade and investment and strengthen cooperation across goods, services and human capital.
By RSS/ANI
