Agreement to drive modern agricultural productivity
India and New Zealand have concluded a comprehensive, balanced and forward-looking Free Trade Agreement (FTA), which provides duty-free access for all Indian exports and comes with a US$20 billion investment inflow while setting pace for Indian engagement with the Indo-Pacific region https://www.commerce.gov.in/.
With 100% tariffs eliminated on tariff lines, the FTA enhances the competitiveness of India’s labour-intensive sectors including textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods and automobiles, directly supporting Indian workers, artisans, women, youth and MSMEs and integrating them deeper into global value chains.
The Agreement delivers New Zealand’s best and most ambitious services offer in any of its FTAs to date. The Agreement significantly strengthens the investment partnership between the two countries. New Zealand has committed to facilitate investments of US$20 billion into India over the next fifteen years, thereby supporting manufacturing, infrastructure, services, innovation and employment under India’s Make in India vision. Indian enterprises are also expected to benefit from their presence in New Zealand and access the wider Pacific Island markets https://fieo.org/.
India has secured commitments across a wide range of high-value sectors including IT and IT-enabled services, professional services, education, financial services, tourism, construction and other business services, opening substantial new opportunities for Indian service suppliers and high-skill employment.
Announcing the FTA conclusion on 22 Dec, Minister for Commerce and Industry Piyush Goyal said, “Today this Free Trade Agreement is about building trade around people and launching opportunities – for our farmers, for our entrepreneurs, for our students, for our women and for our innovators. Boosting yields and farmer incomes, the agreement drives modern agricultural productivity. It opens doors for Indian businesses in the region through well-integrated directional exports and gives our youth choices to learn, work and grow on a global stage https://www.bseindia.com/.”
The Agreement stands out as one of India’s fastest-concluded FTAs aligned with the national vision of Viksit Bharat 2047. The negotiations were formally launched on 16 March 2025 during the meeting between Minister Goyal and Minister for Trade and Investment of New Zealand Todd McClay https://www.nseindia.com/.
The agreement was concluded by holding continuous and intense discussions spread over 5 formal negotiation rounds, several in-person and virtual intersessions. The FTA establishes a high-quality economic partnership that promotes employment, facilitates skill mobility, drives trade and investment-led growth, fosters innovation for agricultural productivity, and enhances MSME participation to strengthen long-term economic resilience.
Rajesh Agrawal, Commerce Secretary, called it “A new generation trade agreement built on tariffs, agricultural productivity, Investment and Talent with complementarity at the core. India’s strengths expand exports, support labour-intensive growth and power services. New Zealand gains deeper, more predictable access to India’s large and growing economy. The movement of people-students, professionals, and skilled workers converges these strengths https://sbi.com.in/.”
A future-ready and facilitative mobility framework positions India as a key supplier of skilled and semi-skilled talent. The FTA provides improved entry and stay provisions for Indian professionals, students and youth, including work opportunities during studies, post-study work pathways, dedicated visa arrangements and a Working Holiday visa framework, strengthening people-to-people ties and expanding global exposure for Indian youth.
The FTA Opens Skilled Employment Pathways through a new Temporary Employment Entry Visa pathway 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. This pathway covers Indian professions such as AYUSH practitioners, yoga instructors, Indian chefs, and music teachers, as well as high-demand sectors including IT, engineering, healthcare, education, and construction, strengthening workforce mobility and services trade https://www.meity.gov.in/.
Establishment of dedicated Agri-Technology Action Plans on kiwifruit, apples and honey, focus on productivity enhancement, technology, research collaboration, quality improvement and value-chain development, to strengthen domestic capabilities and supporting income growth for Indian farmers.
The cooperation includes the establishment of Centres of Excellence, improved planting material, capacity building for growers and technical support for orchard management, post-harvest practices, supply chain performance, and food safety. Projects for apple cultivators and sustainable beekeeping practices will enhance production and quality standards.
The Agreement significantly strengthens the investment partnership between the two countries. New Zealand has committed to facilitate investments of US$20 billion into India over the next fifteen years, thereby supporting manufacturing, infrastructure, services, innovation and employment under India’s Make in India vision. Indian enterprises are also expected to benefit from their presence in New Zealand and access the wider Pacific Island markets.
Boost to Pharma and Medical Devices through faster regulatory Access by enabling acceptance of GMP and GCP inspection reports from comparable regulators, including approvals by the US FDA, EMA, UK MHRA, and other comparable regulators. This will reduce duplicative inspections, lower compliance costs, and expedite product approvals, thereby facilitating the growth of India’s pharmaceutical and medical devices exports to New Zealand.
Commitment has been extended on Geographical Indications, including amendment of its law to facilitate the registration of India’s wines, spirits and ‘other goods’, a benefit that was accorded to the EU by New Zealand- to be completed under defined timelines.
Cooperation has been agreed in AYUSH, culture, fisheries, audio visual tourism, forestry, horticulture and traditional knowledge systems. The FTA promotes India’s AYUSH systems internationally, encourages medical value travel, and positions India as a global wellness hub.
Apart from tariff liberalisation, the FTA includes provisions to address non-tariff barriers through enhanced regulatory cooperation, transparency, and streamlined customs, Sanitary and Phyto-sanitary (SPS) measures and Technical Barriers to Trade disciplines. All systemic facilitations and fast-track mechanisms for imports that serve as inputs for our manufactured exports ensure that tariff concessions translate into effective and meaningful market access.
India–New Zealand economic engagement has shown steady momentum. Bilateral merchandise trade reached US$1.3 billion in 2024–25, while total trade in goods and services stood at approximately US$2.4 billion in 2024, with services trade alone reaching US$1.24 billion, led by travel, IT and business services. The FTA provides a stable and predictable framework to unlock the full potential of this relationship.
The India–New Zealand FTA is India’s third concluded this year and represents a new generation trade partnership. It stands as a significant step in India’s journey towards becoming a globally competitive, inclusive and resilient economy under the vision of Viksit Bharat 2047, the Ministry of Commerce and Industry said.
The key achievements of Financial Services Annex in the FTA include the following:
Electronic Payments and Real-Time Transaction Infrastructure: India and NZ have committed to collaborate on developing domestic payments interoperability and supporting real-time cross-border remittances and merchant payments through integrated Fast Payment Systems (FPS). This provision directly strengthens India’s digital payments ecosystem and fintech sector, enhances remittance flows from the Indian diaspora, creates market opportunities for Indian payment service providers and leverages India’s technological expertise in digital payment systems such as UPI and NPCI.
Financial Technology and Regulatory Innovation: India and NZ have committed to strengthen collaborative efforts in financial services innovation. The agreement includes specific provisions for learning from each other’s Regulatory Sandbox and Digital Sandbox frameworks for cross-border applications. These provisions position India as a fintech hub within the bilateral partnership. Further it facilitates knowledge exchange and regulatory learning with a developed economy and create collaboration opportunities for Indian fintech companies while supporting India’s regulatory sandbox initiatives.
Transfer and Protection of Financial Information: India and NZ recognize each party’s right to maintain legislative and regulatory requirements concerning the transfer, processing and storage of financial information, and aims to facilitate financial service suppliers to establish cross-border digital operations while ensuring complete regulatory control over data sovereignty and consumer privacy protections.
Credit Rating and Non-Discrimination: Indian financial institutions are cushioned from arbitrary or discriminatory credit assessment practices in the New Zealand market. This provision ensures parity of treatment with New Zealand domestic institutions, facilitates market access for Indian banks, insurance companies, and other financial service suppliers, and prevents discriminatory regulatory treatment that could restrict Indian financial institutions’ operational capabilities.
Back-Office and Support Functions: In the financial services annex, India and NZ have committed to support the provision of back-office and financial services support functions. This will leverage India’s world-leading information technology and business process services capabilities. This will enable cost-efficient delivery of financial services through centralized back-office operations in India, will also support growth in India’s financial services, IT and business process outsourcing sectors. This demonstrates mutual recognition of India’s critical infrastructure capacity for the bilateral financial services partnership.
Increased FDI Investment limits and Bank Branches: The schedules of specific commitments reflect progressive collaboration among both sides, with comprehensive commitments on Market Access and National Treatment in key Banking and Insurance Sectors and Subsectors. India’s sectoral offers represent a forward-looking liberalization approach, featuring enhanced Foreign Direct Investment (FDI) limits in banking and insurance, alongside a liberalized bank branch licensing framework allowing up to 15 bank branches to be established over a four-year period. This is a significant expansion from the previously offered GATS limits of 12 branches. These offers will enable Indian financial service suppliers to expand operations into New Zealand, strengthening India’s position in financial services exports and cultivating progressive sectoral growth. They also position New Zealand’s financial institutions competitively in India’s dynamic and rapidly expanding financial services market, while simultaneously reflecting India’s commitment to progressive market liberalization in consonance with its broader strategic objectives.
Overall, the conclusion of negotiations on the India-New Zealand Financial Services Annex underscores both governments’ commitment to deepening the economic ties and harnessing mutual opportunities in the rapidly evolving financial services landscape. The agreement is forward-looking, balanced and designed to provide enhanced market access, regulatory clarity and cooperative frameworks that will benefit financial institutions and service providers from both countries.
Currently, two Indian banks—Bank of Baroda and Bank of India—maintain subsidiary operations in New Zealand with a combined total of four branches while New Zealand currently has no banking or insurance presence in India, and no Indian insurance companies have established operations in New Zealand.
This FTA, by establishing clear market access commitments, regulatory transparency and bilateral cooperation frameworks, will facilitate increased bilateral investment, institutional presence and services delivery. The agreement will serve as an important catalyst for broadening India’s financial services presence in New Zealand and welcoming New Zealand financial institutions to India’s growing and dynamic financial services markets. fiinews.com
