India and New Zealand have concluded negotiations on a long-pending Free Trade Agreement (FTA), a major step in strengthening economic ties between the two countries. The agreement was finalised on 22 December 2025 and is expected to be formally signed in early 2026 after legal vetting and parliamentary approvals in both nations.
It is India’s third free trade agreement in 2025, following deals with the United Kingdom and Oman.
The Free Trade Agreement between India and New Zealand seeks to expand trade, improve market access, and deepen cooperation in goods, services, investment, and mobility. Officials from both sides described the pact as “balanced and forward-looking.”
Market Access
Under the agreement, New Zealand will eliminate tariffs on 100% of Indian exports, providing Indian manufacturers and exporters duty-free access to the Kiwi market from the date of implementation. This is expected to benefit sectors such as pharmaceuticals, textiles, engineering goods, chemicals, IT hardware, and processed foods.
India, in return, has agreed to reduce or eliminate tariffs on around 70% of its tariff lines, covering nearly 95% of New Zealand’s exports by value. However, India strategically excluded certain agricultural products like dairy, coffee, sugar, and edible oils from tariff reductions to protect domestic producers.
Current Trade and Growth Targets
Total two-way trade stood at approximately USD 2.4 billion in 2024-25, according to official estimates. Both governments have set an ambitious target to double bilateral trade within five years of the agreement coming into force.
Trade officials stated that the Free Trade Agreement between India and New Zealand will help diversify India’s export markets and offer New Zealand companies greater access to one of the world’s fastest-growing large economies.
For New Zealand, the pact opens access to a large and rapidly growing consumer market in India and supports its own exporter base, particularly in agriculture and forestry.
Services and Investment
The Free Trade Agreement between India and New Zealand includes commitments in services trade, covering information technology, professional services, education, tourism, and business services. Provisions for investment protection and promotion are intended to encourage long-term capital flows.
New Zealand has also indicated potential investment commitments of up to USD 20 billion over the next 15 years, particularly in the manufacturing, infrastructure, clean energy, and services sectors in India.
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