Deal signed in New Delhi promises duty-free access, investment boost, and mobility pathways
India and New Zealand on Monday signed a free trade agreement (FTA), marking a major step in bilateral economic ties. The pact, likely to come into force later this year, will require ratification by New Zealand’s Parliament.
The agreement was signed at Bharat Mandapam in New Delhi by New Zealand Trade Minister Todd McClay and India’s Commerce Minister Piyush Goyal.
In New Zealand, the deal will be reviewed by Parliament’s foreign affairs, defence and trade committee before being put up for ratification following a national interest analysis and public consultation. The process is expected to take at least six months.
A day earlier, New Zealand Prime Minister Christopher Luxon described the pact as transformative. “It’s once in a generation agreement,” he said in a video post on X, adding that India’s rise to the world’s third-largest economy would offer Kiwi exporters “unprecedented access” to a market of 1.4 billion people.
Negotiations for the agreement resumed in March 2025 after a decade-long pause and were concluded by December 2025, making it one of India’s fastest FTA processes. The deal has also received bipartisan support in New Zealand.
Key benefits of the pact
- Duty-free access for Indian exports
Indian exporters will receive 100% duty-free access to the New Zealand market across 8,284 tariff lines once the agreement comes into force. Around 70% of Indian goods, including leather, handloom and handicrafts, will see immediate tariff elimination. - New Zealand exports to India
New Zealand will reduce or eliminate tariffs on key exports to India such as wool, wood, coal, wine and fruit. Sensitive Indian sectors, including dairy, onions, sugar, spices and edible oils, have been excluded to protect domestic producers. - Trade growth and investment
The agreement aims to double bilateral trade to around $5 billion over five years. New Zealand has also committed investments of up to $20 billion in India over the next 15 years across sectors like manufacturing, services and technology. - Jobs, visas and mobility
The FTA provides visa pathways for 5,000 Indian professionals and 1,000 work-and-holiday visas annually, covering sectors such as IT, healthcare, construction and education. It also expands post-study work opportunities for Indian students.
Expert views
Agneshwar Sen of EY India said, “New Zealand’s offer to eliminate duties on 100 per cent of its tariff lines on entry into force of the agreement, covering all 8,284 lines, means Indian goods in textiles, apparel, leather, pharmaceuticals, machinery, and auto components enter New Zealand duty-free, erasing an average applied tariff of 2.2 per cent. It may be noted that the average includes a 10 per cent tariff on some of our labour intensive exports like clothing and leather products, which also now get the tariff free treatment.”
He added, “Beyond goods, the agreement opens mobility pathways for Indian professionals in IT, healthcare, engineering, and education, while a dedicated fast-track arrangement allows Indian food processors to import New Zealand ingredients duty-free for processing and re-export – directly supporting India’s ambition to become a Global Food Hub. With merchandise exports to New Zealand already on an upward trend, this FTA provides the policy certainty and assured market access to sustain that momentum.”
Ravin Saluja of Sterling Agro Industries said, “The India-New Zealand Free Trade Agreement highlights the issue of dairy safeguards once again. New Zealand accounts for almost a third of all dairy trade across the globe, hence making it essential that India is protected by tariffs. Though the agreement does not ensure any direct imports of milk from the country, it might drive Indian companies to enhance their performance standards.”
Sen further noted, “India has secured this without compromising its most sensitive sectors. Dairy, edible oils, sugar, spices, onions, and key agricultural commodities are explicitly excluded from India’s concession list, protecting domestic farmers and industry. India’s concessions are targeted: eliminating tariffs on sheep meat, wool, coal, and forestry products – inputs that support Indian manufacturing rather than threaten it.”
Conclusion
Once implemented, the agreement is expected to reshape trade flows, boost goods and services exchange, and deepen economic ties between India and New Zealand, while safeguarding sensitive domestic sectors.
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