India and New Zealand on Monday officially signed a long-awaited free trade agreement (FTA), sealing what Prime Minister Christopher Luxon has described as a “once-in-a-generation” pact that opens new pathways for trade in goods and services, investment flows, and labour mobility between the two countries.
The pact was formalised in the presence of Commerce Minister Piyush Goyal and his New Zealand counterpart, Todd McClay.
"The fact that we are making businesses easier to set up, easier to work in India working towards reducing the compliance burden, ensuring simplicity in operations, ensuring a business climate that is trusting, that encourages investment, and also making sure that as a nation, we provide an environment that is business friendly, that is very inviting, and that it help you both grow and enjoy good profits in India," Goyal said at the signing ceremony.
The trade minister invited businesses to invest in India as the country can serve as a corridor for expansion across the world, whether it's Africa, whether it's Latin America, whether it's central Asia, or the US or Europe. "This can become your gateway to the entire world," he noted.
The agreement marks the culmination of negotiations that began in 2010, stalled in 2015 after nine rounds, and were revived in March 2025 before concluding in December last year: making it one of India’s fastest-concluded FTAs.
It spans 20 chapters covering goods, services, rules of origin, customs facilitation, sanitary and phytosanitary measures, technical barriers to trade, dispute settlement, and legal provisions.
He called on businesses to expand coopration in areas of agricitect, food processing, manufacturing, digital technology, artificial intelligence, quantum computing and clean energy to leverage markets in the two countries and across the world.
"India–New Zealand FTA marks a major milestone in India’s liberalised trade journey, opening new opportunities for trade, investment, and deeper economic cooperation. Bilateral trade trajectory between India and New Zealand is expected to reach USD 5 billion by 2030 with a greater participation from MSMEs and labour intensive exports. The pact will boost exports, services trade, tourism, and people-to-people linkages between both nations," Nirmal Minda, ASSOCHAM President, said.
At its core, the FTA lowers trade barriers and expands market access on both sides. India secured duty-free access for all its exports to New Zealand, including labour-intensive sectors such as textiles, leather, plastics, and engineering goods.
The agreement also delivers gains in services, a key pillar of India’s trade strategy. Commitments span IT, education, financial services, tourism, and construction, alongside a new temporary employment visa pathway that will allow up to 5,000 Indian professionals to work in New Zealand for up to three years.
It also opens opportunities for India to expand services exports in areas such as engineering, healthcare, and education, as well as niche segments like AYUSH, including yoga instructors, Indian chefs and music teachers.
In addition, the pact is expected to catalyse investment flows, with projections of up to $20 billion in foreign direct investment from New Zealand into India over the next 15 years.
For New Zealand, the agreement provides immediate duty-free access to over 54% of its exports to India, including sheep meat, wool, coal, and forestry products. Tariffs on several other goods, such as seafood, iron, steel, and aluminium, will be reduced or phased out over time.
‘New chapter’ in economic ties, says Piyush Goyal
Union Commerce and Industry Minister Piyush Goyal had earlier described the agreement as the beginning of a “new chapter” in India–New Zealand economic relations, calling it a key milestone in strengthening bilateral ties.
Welcoming New Zealand’s Trade and Investment Minister Todd McClay to India ahead of the signing, Goyal had said the visit marked a “defining moment” in the partnership between the two countries.
He said the FTA reflects “trust, shared values, and a common vision” for sustainable economic growth and mutual prosperity, and aligns with India’s priorities of strengthening economic resilience and promoting inclusive growth.
The agreement is said to provide unprecedented duty-free access for Indian exports while safeguarding sensitive sectors. It is also expected to enhance market access and tariff preferences, and serve as a gateway for India to expand trade linkages with Oceania and Pacific Island markets.
Sensitive sectors ring-fenced
Despite the broad liberalisation, both sides have moved cautiously on politically sensitive sectors. India has protected key agricultural products such as apples, kiwifruit, manuka honey, and dairy through tariff-rate quotas, minimum import prices, and safeguard mechanisms.
New Delhi has also excluded sectors like dairy, sugar, and certain metals altogether to shield domestic producers, particularly small-scale farmers.
This approach reflects a calibrated trade strategy that balances market access with domestic sensitivities.
Speaking about the partnership in the field of agriculture, Goyal said, "I would love to see some manuka honey come to India, but also would like to see our ki farmers benefit from this partnership."
The Indo-Pacific trade calculus
While bilateral trade between India and New Zealand stood at around $2.4 billion in 2024, the agreement is expected to deepen economic ties and strengthen India’s trade engagement in the Indo-Pacific region.
The pact comes as India looks to expand its footprint in smaller, high-value markets and diversify its trade partnerships.
New Zealand, in turn, gains improved access to one of the world’s fastest-growing major economies and a large consumer base, with the agreement expected to ..
Source Name : Economic Times