In a significant move to bolster economic resilience, India and New Zealand have finalised a comprehensive free trade agreement (FTA) after nine months of negotiations. The deal, announced on Monday 22 December 2025, is designed to deepen ties and stimulate growth as global commerce faces mounting uncertainties from protectionist policies and geopolitical strains.
Key Details of the Landmark Trade Pact
Officials confirmed that the agreement aims to lower tariffs, ease regulatory barriers, and expand cooperation across goods, services, and investments. India's chief negotiator, Petal Dhillon, stated that a formal signing is anticipated in the first quarter of next year, pending a final legal review of the text.
The tariff concessions are notably substantial. India will gain zero-duty export access for all its goods entering New Zealand. In return, Wellington will receive duty concessions and market access for approximately 70% of India's tariff lines. This access will cover a significant 95% of New Zealand's exports to India, implemented in a phased manner.
Sectors Set to Gain and Major Investment Commitments
The pact is expected to provide a major boost to specific industries in both nations. Key Indian sectors poised for growth through tax-free exports include:
- Textiles and apparel
- Engineering goods
- Leather and footwear
- Marine products
For New Zealand, primary gains are forecast in horticulture, wood exports, and sheep wool. Notably, New Zealand has committed to investments worth $20 billion in India over 15 years as part of the accord, according to India's Trade Ministry.
However, the deal also reflects certain protections. India has excluded sensitive imports from the agreement, including dairy products like milk, cream, and cheese, as well as certain animal and vegetable products such as goat meat, onions, and almonds, citing domestic sensitivities.
A Strategic Push for Growth and Diversification
This agreement underscores India's strategic drive to diversify its export destinations and secure trade partnerships beyond traditional markets. The move comes as New Delhi seeks to offset the impact of steep US import tariffs and navigate a volatile global trade landscape.
While bilateral trade between the two countries was a modest $2.4 billion in 2024, encompassing both goods and services, officials express strong optimism. Trade Secretary Rajesh Agarwal said the two sides hope to double this figure within about five years.
New Zealand Prime Minister Christopher Luxon heralded the conclusion of talks in a post on X, following a conversation with Indian Prime Minister Narendra Modi. Luxon projected that New Zealand's exports to India would rise by $1.1 billion to $1.3 billion annually over the next two decades, stating, "Boosting trade means more Kiwi jobs, higher wages and more opportunities for hard working New Zealanders."
Echoing this sentiment, a statement from Modi's office described the FTA as a catalyst for greater trade, investment, innovation, and shared opportunities, marking a new chapter in the bilateral relationship.
