India-NZ bilateral trade stood at US$1,298 million in 2024-2025
India and New Zealand have signed a Free Trade Agreement, with a US$20 billion investment commitment over 15 years from New Zealand, strengthening long-term bilateral economic and strategic cooperation.
The FTA negotiations began on 16 March 2025 and were concluded in a record 9 months, making this the fastest concluded free trade agreement, as well as enhancing market access and tariff preferences for Indian exports to New Zealand, while serving as a gateway to the wider Oceania and Pacific Island markets.
Minister of Commerce and Industry Piyush Goyal and New Zealand’s Minister for Trade and Investment Todd McClay signed the FTA in New Delhi on April 27.
Speaking on the signing, McClay called the India–New Zealand Free Trade Agreement a “once-in-a-generation” opportunity that will boost exports, create jobs, and strengthen bilateral economic ties. He highlighted strong participation from New Zealand businesses at the signing and said the pact will improve market access, reduce trade barriers, and support MSMEs. He also emphasised deep people-to-people links, including the Indian diaspora’s contribution in New Zealand, and longstanding cultural and sporting ties. Describing India as a key partner in a changing global landscape, he expressed confidence that the agreement will deepen cooperation and deliver shared prosperity.
Minister Goyal elaborated, “The India–New Zealand Free Trade Agreement marks a defining milestone in India’s engagement with the developed world. This is India’s 9th Agreement in the past few years- with 38 developed countries. At the heart of the agreement is the empowerment for exports, agricultural productivity, student mobility, skills, investment and services. The investment commitment of US$20 billion from New Zealand signals strong confidence in India’s growth story. It places special emphasis on strengthening MSMEs, fostering innovation, and enabling women-led enterprises to thrive in global markets.”
The agreement opens opportunities for India to emerge as a key supplier of skilled workforce, alongside prospects for future cooperation in areas such as AYUSH and services such as Yoga Instructors, Indian Chefs, and Music Teachers, and services under sector of interests like IT, Engineering, Healthcare, Education, and Construction.
At US$49,380, New Zealand is among the higher-income economies in Oceania. In 2024, New Zealand’s imports stood at US$47 billion, while exports were US$42 billion. New Zealand invests nearly 8% of its GDP annually overseas, with total overseas investment valued at US$422.6 billion as of March 2025.
Around 300,000 persons of Indian origin and NRIs live in New Zealand, making up nearly 5% of its population. This diaspora acts as a cultural and economic bridge, supporting stronger bilateral ties and demand for Indian goods and services.
India and New Zealand merchandise bilateral trade increased from US$855 million in 2015-2016 to US$1,298 million in 2024-2025. The exports increased by 130% whereas imports only increased by 7.21% in 10 years. In 2024-25, the exports from India to New Zealand was higher than imports from New Zealand, maintaining positive trade balance with the country.
Salient Features of the FTA
The FTA eliminates duty on 100% of Indian Exports
Through Agricultural Productivity Partnership, the FTA collaborates with farmers to boost productivity and integrate them in the global value chains.
The FTA boosts MSMEs and Jobs through Zero-duty access for labour-intensive sectors including textiles, apparel, leather, footwear, gems & jewellery, engineering goods and processed foods.
India has offered market access in 70.03% of the tariff lines while keeping 29.97 % tariff lines in exclusion, which covers 95% of New Zealand’s Bilateral Trade.
Certain products are kept in exclusion such as dairy (milk, cream, whey, yoghurt, cheese etc.), animal products (other than sheep meat), vegetable products (onions, chana, peas, corn, almonds etc.), sugar, artificial honey, Animal, vegetable or microbial fats and oils, Arms and Ammunition, Gems and Jewellery, Copper and Articles (Cathodes, Cartridges, Rods, Bars, Coils etc.), Aluminium and articles thereof (Ingots, billets, wire bars) among others.
30.00% of tariff lines will have immediate duty elimination, covering wood, wool, sheep meat, leather-raw hides etc.
35.60% of tariffs are subject to phased elimination over 3, 5, 7, and 10 years, including petroleum oil, malt extract, vegetable oils, and selected electrical and mechanical machinery, peptones etc.
4.37% of products face tariff reductions, such as wine, pharmaceutical drugs, polymers, aluminium, iron and steel articles etc
0.06% fall under tariff rate quotas, including Mānuka honey, apples, kiwi fruit, and albumins including milk albumin.
Enhanced Market Access for Indian Goods – Gains to India from FTA
The FTA provides duty-free access for 100% of India’s exports to New Zealand, covering all tariff lines, and is expected to significantly boost MSMEs and employment.
Enhanced competitiveness in labour intensive sectors like textiles and clothing, leather and footwear, gems and jewellery, engineering goods, and processed foods.
India secures duty-free inputs for its manufacturing sector, including wooden logs, coking coal, and waste and scraps of metals, lowering production costs and enhancing the global competitiveness of Indian industry.
Reduced trade barriers and regulatory certainty will strengthen Indian manufacturing and global value chain integration for MSMEs in textiles, apparel, engineering goods, chemicals, food processing, and electronics.
Structured cooperation for MSMEs includes enhanced access to trade-related information, export readiness programmes, and linkages with New Zealand’s SME ecosystem, with specific focus on start-ups and enterprises owned by women and youth.
Gains for Agriculture, Technology Cooperation, and Farmer Income Growth
New Zealand have agreed on focused Action Plans for kiwifruit, apples, and honey to improve productivity, quality, and sectoral capabilities of these fruits’ growers in India.
The cooperation includes the establishment of Centres of Excellence, improved planting material, capacity building for growers, collaborative research, technical support for orchard management, post-harvest practices, supply chains and food safety.
Projects for apple cultivators and sustainable beekeeping practices will enhance production and quality standards.
This is Paired with Market access for the selected agricultural products (Apples, Kiwifruit, Manuka Honey) and Albumins from New Zealand in India. This access will be managed through a Tariff Rate Quota (TRQ) system with Minimum Import Price and seasonal imports, ensuring consumer choice while protecting domestic farmers. All TRQs are paired with delivery on Agriculture Productivity Action Plans and monitored by a Joint Agriculture Productivity Council, balancing market access with protection of sensitive domestic agricultural sectors.
Areas of cooperation under agriculture also include Horticulture, Honey, Forestry, Livestock, Fisheries, Apiculture, and the Wine sector.
Enhanced Opportunities Beyond Goods
Best-Ever Offer by New Zealand: Commitment across 118 services sectors, with Most-Favoured Nation (MFN) treatment in 139 sectors.
Health & Traditional Medicine: For the first time, New Zealand has facilitated trade in Ayurveda, yoga, and other traditional medicine services with India. This landmark provision promotes the global recognition of India’s AYUSH systems, supports medical value travel, encourages collaboration in wellness services, and reinforces India’s position as a global hub for health, wellness, and traditional medicine services. It gives centre stage to India’s AYUSH disciplines (Ayurveda, Yoga & Naturopathy, Unani, Sowa-Rigpa, Siddha, and Homeopathy) alongside Maori Health practices.
Mobility & Education
Student Mobility: New Zealand signed Annex on Student Mobility and Post Study Work Visa for the first time with any country. Indian students can work up to 20 hours per week while studying, even if there are policy changes in future, with extended post-study work visas (STEM Bachelor: 3 yrs; Master’s: up to 3 yrs; Doctorate: up to 4 yrs).
Professional Pathways: The FTA establishes a new Temporary Employment Entry (TEE) Visa pathwaywith a quota of 5,000 visas for skilled Indiansfor stay upto 3 years. The sectors of interest to India include iconic occupations like AYUSH practitioners, Yoga Instructors, Indian Chefs, and Music Teachers). The other sectors of interest also include IT, Engineering, Healthcare, Education, and Construction.
Working Holiday Visa: 1,000 young Indians annually can avail multiple entry in New Zealand for a period of 12 months.
These provisions create unprecedented opportunities for Indian youth and professionals to gain global exposure.
Investment and Economic Co-operation
Joint strategies to promote investment, research and innovation, technology flows, and skill development, particularly in renewable energy, digital services, and modern infrastructure, are fully covered.
A Rebalancing Clause is incorporated into the Agreement to provide a framework for addressing any shortfall in investment delivery, thereby ensuring robust and tangible economic outcomes.
Organic Primary Products: Mutual Recognition Arrangement between the two sides will be delivered in this agreement. Organic products which are expected to gain traction include Basmati rice, Flax seeds, Arabica Cherry AB, Psyllium husk (Isabgol), Soyabean oil cake, Organic Black Tea etc.
Technical Assistance: Cooperation has been agreed in AYUSH, audio visual industries, tourism, sports and traditional knowledge systems. The FTA promotes India’s AYUSH systems internationally, encourages medical value travel, and positions India as a global wellness hub.
A dedicated chapter on Culture, Trade, Traditional Knowledge, and Economic Cooperation advances mutual cooperation to enable and further both parties’ peoples’ economic and cultural aspirations.
Engagement with New Zealand’s indigenous Maori communities aims to promote cultural exchange and mutual respect. This strengthens India’s soft power and global recognition of its heritage. Fiinews.com
