New Zealand and India on Monday announced the conclusion of negotiations on a landmark free trade agreement (FTA), aimed at doubling bilateral trade over the next five years and significantly deepening economic ties between the two countries.
Under the agreement, tariffs will be eliminated or reduced on 95% of New Zealand’s exports to India, with more than half of these products becoming duty-free from the first day the pact comes into force. In return, all Indian goods will enjoy duty-free access to the New Zealand market. As part of the broader economic partnership, New Zealand has also committed to investing $20 billion in India over the next 15 years.
“The gains are wide-ranging and significant,” New Zealand Prime Minister Christopher Luxon said in a statement. “India is the world’s most populous country and the fastest-growing major economy, and that creates opportunities for jobs for Kiwis, exports and growth.”
The agreement fulfils a 2022 election promise by New Zealand’s governing National Party to finalise a free trade deal with India during its first term in office.
Two-way trade between the two countries stood at approximately $1.81 billion in 2024, driven mainly by pharmaceutical exports from India and forestry and agricultural products from New Zealand. This remains modest compared with India’s total goods trade, which exceeded $1 trillion in the 2024–25 financial year.
Indian Prime Minister Narendra Modi described the agreement as a major milestone. “Concluded in just nine months, this historic milestone reflects a strong political will and shared ambition to deepen economic ties between our two countries,” he said in a social media post.
To safeguard domestic interests, the Indian government said the FTA excludes market access for several sensitive sectors, including dairy products, coffee, milk, cream, cheese, yoghurt, whey, caseins, onions, sugar, spices, edible oils and rubber.
India has been accelerating trade negotiations with multiple partners as it seeks to diversify export markets, particularly after the United States imposed a 50% tariff on Indian goods. The New Zealand deal is India’s third trade agreement this year, following an economic partnership pact with Oman announced last week and a deal with the United Kingdom in May.
Parliamentary Approval in New Zealand Uncertain
The two countries expect to formally sign the agreement in the first half of 2026, according to the New Zealand government. However, the deal still requires parliamentary approval in Wellington, where its passage is not guaranteed.
New Zealand First, a coalition partner of the ruling National Party holding eight of the 123 seats in parliament, has said it will oppose the agreement. Party leader Winston Peters argued that the deal “gives too much away, especially on immigration, and does not get enough in return for New Zealanders, including on dairy.”
While the governing coalition controls 67 seats, the National Party holds only 48 and relies on support from its coalition partners, making the ratification process politically sensitive.
If approved, the agreement is expected to mark a significant step forward in India–New Zealand economic relations and reshape trade flows between the two nations over the coming decade.
