India and New Zealand have concluded a comprehensive and forward-looking Free Trade Agreement (FTA), marking a significant milestone in India’s Indo-Pacific economic strategy. Announced on December 22, 2025, the agreement stands out as one of India’s fastest-concluded FTAs with a developed economy, aligning closely with the national vision of Viksit Bharat 2047.
Formally launched on March 16, 2025, during discussions between Commerce and Industry Minister Piyush Goyal and New Zealand’s Trade and Investment Minister Todd McClay, the negotiations concluded after five intensive rounds supported by continuous inter-sessional engagements. The result is a new-generation trade agreement that integrates tariffs, agricultural productivity, investment, and talent mobility into a people-centric and jobs-driven framework.
Unprecedented Market Access for Indian Exports
A defining feature of the FTA is New Zealand’s elimination of tariffs on 100% of its tariff lines, granting duty-free market access for all Indian exports. This is expected to significantly enhance the competitiveness of India’s labour-intensive sectors, including textiles, apparel, leather, footwear, gems and jewellery, handicrafts, engineering goods, automobiles, pharmaceuticals, and marine products.
For Indian MSMEs, artisans, women-led enterprises, and export-oriented manufacturers, this agreement offers a predictable and stable platform to integrate more deeply into global value chains. On its part, India has offered tariff liberalisation across 70% of tariff lines, covering nearly 95% of bilateral trade value, while retaining safeguards for sensitive domestic sectors.
Best-Ever Services and Mobility Commitments
The FTA delivers New Zealand’s most ambitious services offer in any trade agreement to date. India has secured market access across 118 services sectors and Most-Favoured Nation (MFN) commitments in 139 sub-sectors, including IT and IT-enabled services, professional services, education, financial services, construction, tourism, audiovisual services, and telecommunications.
A future-ready mobility framework is a major pillar of the agreement. Indian students benefit from expanded post-study work opportunities—up to three years for STEM Bachelor’s and Master’s graduates and up to four years for doctoral scholars—without numerical caps. The agreement also creates professional pathways through a new Temporary Employment Entry Visa, allowing 5,000 Indian professionals at any given time to work in New Zealand for up to three years, alongside 1,000 Work and Holiday Visas annually.
Importantly, the mobility framework recognises diverse Indian skill sets, covering IT professionals, engineers, healthcare workers, educators, as well as AYUSH practitioners, yoga instructors, Indian chefs, and music teachers—strengthening people-to-people ties and services trade.
Agricultural Productivity with Safeguards
Rather than unrestricted market access, the FTA adopts a calibrated approach to agriculture. It establishes Agricultural Productivity Partnerships through Centres of Excellence for apples, kiwifruit, and honey, focusing on technology transfer, improved planting material, research collaboration, and value-chain development.
To protect Indian farmers, market access for these products is linked to quotas and minimum import prices. Sensitive sectors such as dairy, milk products, coffee, sugar, spices, edible oils, onions, and rubber remain fully excluded, ensuring domestic interests are safeguarded while productivity gains are pursued.
Investment, Manufacturing, and Regulatory Cooperation
New Zealand has committed to facilitating USD 20 billion in investments into India over the next 15 years, supporting manufacturing, infrastructure, services, innovation, and employment under the Make in India initiative. Duty-free access for key inputs—such as wooden logs, coking coal, and metal waste and scrap—will further enhance India’s manufacturing competitiveness.
The agreement also boosts pharmaceuticals and medical devices by enabling faster regulatory access through mutual acceptance of GMP and GCP inspection reports from trusted regulators like the US FDA, EMA, and UK MHRA, reducing compliance costs and approval timelines.
A Strategic Indo-Pacific Partnership
Bilateral trade between the two countries has already shown steady momentum, with merchandise trade reaching USD 1.3 billion in 2024–25 and total goods and services trade touching USD 2.4 billion. The FTA provides a stable and predictable framework to unlock significantly higher trade, investment, and services flows.
Under the leadership of Prime Minister Narendra Modi, the India–New Zealand FTA emerges as a model of balanced trade diplomacy—one that prioritises people, productivity, and long-term resilience. As the third FTA concluded this year, it reinforces India’s transition toward
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