India and New Zealand on Monday signed a Free Trade Agreement in New Delhi, marking a major step in their economic relationship. Union Commerce Minister Piyush Goyal and New Zealand Trade and Investment Minister Todd McClay signed the pact at Bharat Mandapam. The agreement now moves to New Zealand’s Parliament for ratification before it becomes operational later this year.
The deal sets a clear trade expansion target. Both countries aim to double bilateral trade from the current $1.3 billion to around $5 billion within five years. New Zealand has also committed up to $20 billion in investment in India over the next 15 years, signalling deeper long-term economic engagement.
Fast-tracked negotiations after a long pause
The agreement was concluded quickly after a long gap in negotiations. Talks resumed in March 2025 after remaining stalled since 2015. Both sides finalised the deal within nine months in December 2025.
New Zealand Prime Minister Christopher Luxon described it as a “once in a generation agreement.” He said India’s rise as a major global economy gives New Zealand exporters access to a market of 1.4 billion people.
Full duty-free access for Indian exports
The agreement removes tariffs on all Indian exports entering New Zealand across 8,284 tariff lines. It eliminates an average import duty of 2.2 per cent, with some products earlier facing tariffs of up to 10 per cent.
Key sectors expected to benefit include textiles, apparel, leather, handicrafts, pharmaceuticals, machinery, engineering goods, and auto components. Officials said around 70 per cent of Indian exports will enter New Zealand duty-free from day one of implementation.
Market access for New Zealand in India
India has opened 70.03 per cent of its tariff lines for New Zealand, covering nearly 95 per cent of current imports. This gives New Zealand access to products such as wool, timber, coal, wine, fruits, apples, kiwifruit, and honey.
India has also allowed controlled concessions on select agricultural imports, with safeguards such as quotas and minimum import price conditions.
Sensitive sectors kept protected
India has kept nearly 30 per cent of tariff lines outside the agreement. Dairy products, edible oils, sugar, onions, pulses, and several agricultural goods remain fully protected.
Gems and jewellery, metals, arms and ammunition, and other strategic sectors are also excluded. Officials said the structure ensures protection for farmers and sensitive industries while allowing targeted imports that support manufacturing needs.
Mobility and services expansion
The agreement introduces structured mobility pathways for professionals. New Zealand will allow up to 5,000 Indian professionals under a visa framework. It will also issue 1,667 temporary work visas annually for an initial three-year period.
These provisions will support workers in IT, healthcare, engineering, education, and construction. The pact also expands access across 139 service sectors, including finance, tourism, education, and digital services.
Investment push and trade outlook
New Zealand has committed up to $20 billion in investment in India over the next 15 years, focusing on infrastructure, renewable energy, agriculture, manufacturing, and technology.
Bilateral trade currently stands at $1.3 billion. Both governments aim to significantly scale this under the new framework.
Once ratified, the agreement is expected to expand trade flows, strengthen services cooperation, and create new mobility pathways between India and New Zealand.