India–New Zealand wrap up free trade talks, aim to boost goods and services trade

India and New Zealand on Monday announced the conclusion of negotiations for a free trade agreement (FTA), a move aimed at boosting bilateral trade in goods, services and investments.

The talks began in May this year.

New Zealand Prime Minister Christopher Luxon said on Monday that negotiations for a free trade agreement with India had been concluded, adding that the pact reduces or removes tariffs on 95 per cent of New Zealand’s exports to India.

It is forecast that New Zealand’s exports to India could increase from USD 1.1 billion to USD 1.3 billion per year over the coming two decades, Luxon said in a social media post.

The India-NZ partnership is going to scale newer heights. The FTA sets the stage for doubling bilateral trade in the coming 5 years.

India welcomes investment worth over USD 20 billion from New Zealand across diverse sectors. Our talented youth, vibrant startup ecosystem and…

— Narendra Modi (@narendramodi) December 22, 2025

“I’ve just spoken with India’s Prime Minister Narendra Modi following the conclusion of the NZ-India Free Trade Agreement.

“The agreement builds on the strong friendship between our two countries. India is one of the fastest-growing economies in the world, and this gives Kiwi businesses access to 1.4 billion Indian consumers,” Luxon said.

In FY25, bilateral trade between India and New Zealand stood at about USD 1.3 billion, with India’s exports valued at USD 711.1 million and imports at USD 587.1 million.

New Zealand’s average import tariff is 2.3 per cent, compared with India’s 17.8 per cent, and 58.3 per cent of New Zealand’s tariff lines are already duty-free.

India’s export basket to New Zealand is broad-based but concentrated in fuels, textiles and pharmaceuticals. Aviation turbine fuel led shipments at USD 110.8 million, followed by clothing, fabrics and home textiles at USD 95.8 million. Medicines accounted for USD 57.5 million, while machinery, including turbojets, contributed USD 51.8 million.

Petroleum products were another major component, with diesel exports totalling USD 47.8 million and petrol exports totalling USD 22.7 million. Other notable exports included automobiles and parts (USD 19.3 million), paper and paperboard (USD 18.3 million), electronics (USD 16.5 million), iron and steel (USD 14.1 million), shrimps (USD 13.7 million), basmati rice (USD 11.9 million) and gold jewellery (USD 9.9 million).

New Zealand’s exports to India are dominated by raw materials and agricultural inputs. Wood and wood articles (USD 78.4 million) and wood pulp (USD 39.8 million) underline linkages in paper, packaging and construction. Steel scrap exports reached USD 71.2 million, while aluminium scrap totalled USD 42.9 million.

In energy and heavy industry, coking coal exports totalled USD 48.8 million, alongside high-value turbojets valued at USD 66.2 million. Agricultural and animal-based products also play a significant role, led by shorn wool (USD 47.3 million), milk albumin (USD 32.1 million), apples (USD 32.8 million) and kiwi fruit (USD 17 million).

Services trade forms a more significant pillar of the bilateral relationship. In FY24, India’s services exports to New Zealand stood at USD 214.1 million, while New Zealand’s services exports to India totalled USD 456.5 million.

India’s strengths lie in IT and software services, telecommunications support, healthcare and financial services. New Zealand’s services exports are led by education — driven by Indian students — followed by tourism, fintech solutions and specialised aviation training.

India’s free trade agreements: An explainer

India on Monday announced the closure of negotiations for a free trade agreement with New Zealand, marking its 18th such deal as the country seeks to expand bilateral trade and investments.

The India–New Zealand FTA is expected to be signed in the next three months and is likely to come into force next year.

Other regions and countries with which India has signed trade agreements include the four-nation European bloc EFTA, Japan, Korea, Oman and Australia. Since 2014, India has signed six trade pacts with Mauritius, the UAE, Australia, EFTA and the UK.

What is a Free Trade Agreement (FTA)?

An FTA is an economic arrangement between two or more countries under which they agree to eliminate or significantly reduce customs duties on the maximum number of goods traded.

These agreements also aim to cut non-trade barriers, ease norms to promote services exports and encourage bilateral investments.

Benefits of FTAs

Zero-duty entry into partner markets helps diversify and expand export destinations.

FTAs can attract foreign investment to stimulate domestic manufacturing and provide access to raw materials, intermediate products and capital goods for value-added manufacturing.

FTAs signed by India so far

India has inked trade deals with Sri Lanka, Bhutan, Thailand, Singapore, Malaysia, Korea, Japan, Australia, the UAE, Mauritius, the 10-nation ASEAN bloc and the four-nation European bloc EFTA comprising Iceland, Liechtenstein, Norway and Switzerland.

India is also negotiating trade agreements with several partners, including the US, the European Union, Chile, Peru, Israel and New Zealand.

India–New Zealand FTA: Key points

All Indian goods, including labour-intensive sectors such as textiles, plastic items, leather and engineering goods, will enter New Zealand at zero duty.

New Zealand has committed to invest USD 20 billion over 15 years.

India has secured commitments across high-value services sectors including IT and IT-enabled services, professional services, education, financial services, tourism, construction and other business services.

The agreement opens skilled employment pathways through a new Temporary Employment Entry Visa route for Indian professionals in skilled occupations, with a quota of 5,000 visas at any given time and a stay of up to three years.