In a rapid diplomatic victory, India and New Zealand announced the conclusion of a comprehensive Free Trade Agreement (FTA) on Monday. Finalized in just nine months—negotiations began in March 2025—the deal stands as one of India’s fastest-concluded trade pacts with a developed nation.
Prime Minister Narendra Modi and Prime Minister Christopher Luxon unveiled the agreement, characterizing it as a balanced and forward-looking framework designed to bolster economic resilience. This marks New Delhi’s third major trade pact this year, aligning closely with the Viksit Bharat 2047 vision to integrate India deeper into the global economy.
The agreement is described as “people-centric,” focusing heavily on job creation, MSME support, and educational mobility.
Key Pillars of the Agreement
The FTA covers a wide spectrum of economic activities, from merchandise trade to movement of professionals. Below are the primary components of the deal.
1. Trade in Goods: Market Access & Tariffs
The deal significantly lowers barriers for exporters from both nations, covering approximately 95% of bilateral trade.
- 100% Access for India:New Zealand will provide zero-duty access to 100% of India’s exports. This is a massive boost for labor-intensive sectors such as:
- Textiles and Apparel
- Leather and Footwear
- Engineering goods and Pharmaceuticals
- Tariff Liberalization by India:India will reduce or eliminate tariffs on 70% of tariff lines, facilitating cheaper access to New Zealand products.
- Manufacturing Support:Indian manufacturers will gain duty-free access to critical raw materials, including wooden logs, coking coal, and metal scrap.
2. Strategic Safeguards for Agriculture
Acknowledging domestic sensitivities, the government has ensured robust protection for India’s agricultural sector.
- Exclusions:Sensitive items such as dairy, sugar, spices, and edible oils are excluded from market access, protecting Indian farmers from import surges.
- Collaboration:The pact establishes Centres of Excellence for apples, kiwifruit, and honey to boost productivity and research, aiming to increase farmers’ incomes through technology transfer.
3. Enhancing Services and Investments
The agreement opens new avenues for service providers and sets ambitious investment targets.
- Service Sector Expansion:New Zealand is offering market access in 118 service sectors, including IT, telecommunications, construction, and tourism.
- Investment Roadmap:New Zealand has committed to facilitating $20 billion in investment into India over the next 15 years.
- Pharma Streamlining:Regulatory approvals for Indian medical products will be fast-tracked. New Zealand will accept inspection reports from major global regulators (US FDA, UK MHRA, EU EMA).
4. Workforce Mobility and Cultural Exchange
A standout feature of this FTA is the focus on the movement of people, professionals, and culture.
- Professional Visas:A Temporary Employment Entry Visa scheme will allow 5,000 Indian professionals This covers:
- Traditional roles: IT, engineering, healthcare, and education.
- Cultural roles: AYUSH practitioners, yoga instructors, chefs, and music teachers.
- Work & Holiday:The pact creates a provision for 1,000 work and holiday visas
5. Major Wins for Students
With education being a key export for New Zealand, the deal offers significant advantages for Indian students.
- No Caps:There will be no numerical limit on the number of Indian students entering New Zealand.
- Post-Study Work Rights:
- Up to 3 yearsfor STEM graduates (Bachelor’s and Master’s).
- Up to 4 yearsfor Doctoral (PhD) scholars.
Summary of Impact
Currently, bilateral trade between the two nations stands at approximately $2.4 billion (2024). This agreement provides a stable, long-term framework to exponentially grow these figures, offering Indian businesses a competitive edge in the Pacific while attracting high-quality investment and technology to domestic shores.