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India and New Zealand on Monday signed a long-awaited free trade agreement (FTA), opening up goods trade, services, investment flows and mobility of professionals, while carefully shielding sensitive sectors such as dairy and agriculture.
The pact, signed in the presence of Commerce Minister Piyush Goyal and New Zealand Trade Minister Todd McClay, concludes negotiations that began in 2010, stalled in 2015, and were revived in March 2025 before being finalised in December.
Also Read: India inks 'once-in-a-generation' free trade agreement with New Zealand after a decade of talks
Here is a breakdown of what the agreement contains and why it matters:
India has secured zero-duty access for all its exports to New Zealand, covering labour-intensive sectors such as textiles, leather, plastics and engineering goods. Given New Zealand’s already low average tariff of about 2.3%, the deal provides Indian exporters a clear competitive edge.
For New Zealand, India will offer duty-free access on over 54% of tariff lines from day one, including sheep meat, wool, coal and forestry products. Tariffs on other items such as seafood, metals and aluminium will be reduced gradually.
India has secured market access across sectors including IT, education, financial services, tourism and construction. The deal also creates a new temporary visa pathway allowing up to 5,000 Indian professionals to work in New Zealand at any given time for up to three years.
Opportunities are also expected in niche segments such as healthcare, education, and traditional sectors like AYUSH, including yoga instructors and Indian chefs.
The agreement also aims to make it easier for businesses to operate across both markets, with provisions on customs facilitation, regulatory cooperation and dispute resolution.
Officials say India could serve as a gateway for New Zealand firms to expand into other global markets, including Africa, Latin America and Europe.
Products such as dairy, sugar, several agricultural items and metals have been excluded from tariff concessions to protect domestic producers and farmers.
Also Read: India–New Zealand FTA to create jobs, lift incomes as doors open to 1.4 billion Indian consumers: Christopher Luxon
Other items like apples, kiwifruit and manuka honey will be allowed under tariff-rate quotas, minimum import prices and safeguard measures, limiting their impact on local markets.
This reflects what officials describe as a calibrated strategy balancing openness with domestic interests.
Bilateral trade between the two countries currently stands at about $2.4 billion, but is expected to grow to $5 billion by 2030.
For India, the FTA provides access to a high-income, rules-based Pacific market, while for New Zealand it opens doors to one of the world’s fastest-growing large economies.
Easier visa pathways, faster student mobility and lower compliance barriers are expected to boost services trade, supported by New Zealand’s Indian diaspora of over 300,000 people.
India will allow imports of New Zealand wines at concessional duties, with tariffs to be reduced gradually over a period of up to 10 years, giving domestic producers time to adjust.
At the same time, Indian wines and spirits will get duty-free access to the New Zealand market, opening up opportunities for exports from India’s nascent but growing premium beverage industry.
As Goyal described it, the agreement signals a “new chapter” in bilateral ties, aimed at building a broader economic partnership while ensuring that domestic industries remain protected.
The pact, signed in the presence of Commerce Minister Piyush Goyal and New Zealand Trade Minister Todd McClay, concludes negotiations that began in 2010, stalled in 2015, and were revived in March 2025 before being finalised in December.
Also Read: India inks 'once-in-a-generation' free trade agreement with New Zealand after a decade of talks
Here is a breakdown of what the agreement contains and why it matters:
Duty-free access at the core
At the heart of the FTA is a significant lowering of tariffs.India has secured zero-duty access for all its exports to New Zealand, covering labour-intensive sectors such as textiles, leather, plastics and engineering goods. Given New Zealand’s already low average tariff of about 2.3%, the deal provides Indian exporters a clear competitive edge.
For New Zealand, India will offer duty-free access on over 54% of tariff lines from day one, including sheep meat, wool, coal and forestry products. Tariffs on other items such as seafood, metals and aluminium will be reduced gradually.
Big push for services and jobs
Services — a key strength for India — form a central pillar of the agreement.India has secured market access across sectors including IT, education, financial services, tourism and construction. The deal also creates a new temporary visa pathway allowing up to 5,000 Indian professionals to work in New Zealand at any given time for up to three years.
Opportunities are also expected in niche segments such as healthcare, education, and traditional sectors like AYUSH, including yoga instructors and Indian chefs.
Investment flows and business expansion
The FTA is expected to deepen investment ties, with New Zealand committing to facilitate up to $20 billion in foreign direct investment into India over 15 years.The agreement also aims to make it easier for businesses to operate across both markets, with provisions on customs facilitation, regulatory cooperation and dispute resolution.
Officials say India could serve as a gateway for New Zealand firms to expand into other global markets, including Africa, Latin America and Europe.
Sensitive sectors protected
Despite broad liberalisation, India has taken a cautious approach on politically sensitive sectors.Products such as dairy, sugar, several agricultural items and metals have been excluded from tariff concessions to protect domestic producers and farmers.
Also Read: India–New Zealand FTA to create jobs, lift incomes as doors open to 1.4 billion Indian consumers: Christopher Luxon
Other items like apples, kiwifruit and manuka honey will be allowed under tariff-rate quotas, minimum import prices and safeguard measures, limiting their impact on local markets.
This reflects what officials describe as a calibrated strategy balancing openness with domestic interests.
A wider Indo-Pacific strategy
The deal comes as India looks to diversify its trade partnerships and deepen engagement in the Indo-Pacific.Bilateral trade between the two countries currently stands at about $2.4 billion, but is expected to grow to $5 billion by 2030.
For India, the FTA provides access to a high-income, rules-based Pacific market, while for New Zealand it opens doors to one of the world’s fastest-growing large economies.
Beyond trade: Talent, education, and mobility
The agreement goes beyond tariffs to include cooperation in areas such as education, tourism and people-to-people exchanges.Easier visa pathways, faster student mobility and lower compliance barriers are expected to boost services trade, supported by New Zealand’s Indian diaspora of over 300,000 people.
Wine and spirits: Gradual opening
The agreement also includes provisions on wines and spirits, a politically sensitive segment.India will allow imports of New Zealand wines at concessional duties, with tariffs to be reduced gradually over a period of up to 10 years, giving domestic producers time to adjust.
At the same time, Indian wines and spirits will get duty-free access to the New Zealand market, opening up opportunities for exports from India’s nascent but growing premium beverage industry.
Sectors set to gain in India
The agreement is expected to boost several export-oriented and services sectors:- Textiles & garments: Duty-free access improves competitiveness for labour-intensive exports
- Leather & footwear: Zero tariffs open opportunities for India’s manufacturing hubs like Agra
- Engineering goods: Easier access for machinery, auto components and industrial products
- Pharmaceuticals & medical devices: Faster regulatory approvals and reduced compliance hurdles
- IT & professional services: Expanded market access for tech, consulting and business services
- Tourism & hospitality: Increased travel flows and demand for services
- AYUSH & niche services: Opportunities for yoga trainers, chefs, and traditional medicine practitioners
- MSMEs: Wider market access and integration into global supply chainsry.
Why it matters
The India–New Zealand FTA marks a shift in India’s trade strategy — combining market access with safeguards, and focusing on services, investment and mobility alongside goods trade.As Goyal described it, the agreement signals a “new chapter” in bilateral ties, aimed at building a broader economic partnership while ensuring that domestic industries remain protected.
