India–New Zealand Free Trade Agreement (FTA): Explained
What is an FTA?
A Free Trade Agreement (FTA) is an economic arrangement between two or more countries in which they agree to reduce or eliminate customs duties on most traded goods. It also aims to reduce non-tariff barriers that restrict trade and investment flows between the partner countries.
India–New Zealand FTA: Key Timeline
Negotiations between India and New Zealand were first launched in 2010. After nine rounds of talks, they stalled in 2015. The process was revived in March 2025.
- March 16, 2025: Negotiations resumed
- December 22, 2025: Talks concluded
- April 27, 2026: Agreement set to be signed
Scope of the Agreement
The FTA covers 20 chapters, including:
- Trade in goods
- Rules of origin
- Trade in services
- Customs and trade facilitation
- Sanitary and phytosanitary (SPS) measures
- Technical barriers to trade (TBT)
- Trade remedies
- Dispute settlement
- Legal and institutional provisions
Benefits for India
- Indian goods such as textiles, leather, plastic products, and engineering goods will enter New Zealand at zero duty.
- New Zealand’s average import tariff is around 2.3%.
- India has secured commitments in services sectors like IT, education, financial services, tourism, construction, and professional services.
- A new temporary employment visa pathway will allow up to 5,000 Indian professionals at a time to work in New Zealand for up to three years.
- Indian exports like aviation fuel, pharmaceuticals, garments, and machinery will gain better market access.
Benefits for New Zealand
- India will provide duty-free access to over 54% of New Zealand exports from day one, including sheep meat, wool, coal, and forestry products.
- Tariff concessions will be given on products like apples, kiwifruit, manuka honey, and seafood, subject to quotas and price controls.
- Duties on items such as mussels and salmon will be phased out over seven years.
- Import duties on iron, steel, and aluminium scrap will be removed over up to 10 years.
- Tariff-free access for products like avocados and persimmons will be phased in over 10 years.
Sensitive Sectors for India
To protect farmers and MSMEs, India has excluded several sensitive sectors from duty concessions, including:
- Dairy products
- Sugar
- Vegetable products (onions, chana, peas, corn, almonds, etc.)
- Animal products
- Copper and aluminium goods
- Gems and jewellery
- Arms and ammunition
Investment Commitments
New Zealand has committed to facilitating around USD 20 billion in foreign direct investment (FDI) into India over the next 15 years. Current FDI inflows from New Zealand remain relatively small.
Importance of the Deal
For India, the FTA improves access to a high-income, rules-based Pacific market and strengthens its Indo-Pacific trade strategy.
For New Zealand, it provides entry into one of the world’s fastest-growing large economies amid global trade uncertainty.
The Indian diaspora in New Zealand—over 300,000 people—also strengthens trade, education, and investment ties.
Bilateral Trade Snapshot
- Total trade (2024): ~USD 2.4 billion
- Merchandise trade (2024–25): ~USD 1.3 billion
- Services trade: ~USD 1.24 billion
India exports:
Aviation fuel, pharmaceuticals, garments, machinery, petroleum products
India imports:
Wood products, dairy, wool, coal, iron and steel, scrap metals
