In March 2025, India and New Zealand initiated negotiations for a Free Trade Agreement, which were successfully concluded by December 2025, making it one of India’s fastest-negotiated FTAs. The pact reflects a shared commitment to strengthen economic ties and achieve commercially meaningful outcomes within a remarkably short period.
For international businesses, the India–New Zealand FTA expands market access and tariff advantages, positioning New Zealand as a strategic gateway to the wider Oceania and Pacific Island markets. Beyond trade in goods, the agreement opens up avenues in services and skilled mobility, highlighting India’s role as a dependable talent source across priority sectors.
Moreover, the FTA sets the stage for collaboration in emerging and specialised domains, including AYUSH, wellness, and services such as Yoga instruction, culinary expertise, and creative professions. Altogether, it exemplifies India’s evolving trade strategy, integrating market access, services, skills, and long-term economic partnership.
Tracing Growth in India-New Zealand Trade Relations
Over the years, India and New Zealand have nurtured a steadily deepening trade relationship, making New Zealand India’s second-largest trading partner in Oceania and its 11th-largest global partner in two-way trade. Although bilateral trade remains selective in scale, its strategic importance has risen alongside growing commercial and demographic connections.
During 2023–24, total bilateral trade reached USD 1.75 billion, reflecting sustained engagement in both goods and services. New Zealand’s status as a high-income, globally integrated economy with a per capita income of USD 49,380 and total imports and exports of USD 47 billion and USD 42 billion respectively in 2024 further highlights its stability and sophistication as a market in the Oceania region.
New Zealand’s outward investment orientation reinforces this bilateral dynamic. With nearly 8% of its GDP invested abroad annually and total overseas investments amounting to USD 422.6 billion as of March 2025, the country represents a valuable source of global capital and long-term partnerships for emerging economies like India.
Adding to trade and investment flows, India’s diaspora of approximately 300,000 people representing nearly 5% of New Zealand’s population serves as a durable economic and cultural bridge. This community supports demand for Indian goods and services while facilitating business continuity, talent mobility, and cross-border cooperation, forming a solid foundation for the FTA.
Key Benefits of the India–New Zealand FTA
The India–New Zealand Free Trade Agreement provides a comprehensive suite of advantages aimed at deepening trade, promoting services, and supporting cross-border investment. Its provisions enhance predictability, improve market access, and foster long-term operational viability for businesses in both markets.
Tariff Liberalisation
The FTA introduces a calibrated tariff framework that balances full export access with domestic safeguards. From the Entry into Force, Indian exports gain 100% duty-free access to New Zealand, providing immediate clarity and competitiveness for manufacturers and exporters.
India has reciprocated by offering access on 70.03% of its tariff lines, while 29.97% remain on an exclusion list to protect sensitive sectors. Among the liberalised lines, 30% receive immediate duty elimination, covering products such as wood, wool, sheep meat, and raw leather hides. A further 35.60% of tariff lines will be phased out over 3, 5, 7, and 10 years, including petroleum oils, malt extracts, vegetable oils, selected electrical and mechanical machinery, and peptones. An additional 4.37% of products, such as wine, pharmaceutical products, polymers, aluminium, and iron and steel articles, will see reduced tariffs, while 0.06% including honey, apples, kiwi fruit, and milk albumin fall under tariff rate quotas.
Key sensitive items explicitly excluded by India include dairy and dairy derivatives, most animal products, select agricultural commodities, sugar, fats and oils, arms and ammunition, gems and jewellery, and certain copper and aluminium products. This structure provides foreign enterprises with predictable timelines, clear access, and a balanced liberalisation approach that aligns with long-term trade strategies.
Mobility and Education
The FTA introduces a structured framework for talent mobility, highly relevant for companies seeking skilled, globally mobile professionals. For the first time, New Zealand has signed an Annexe on Student Mobility and Post-Study Work Visas, ensuring long-term policy certainty. Indian students may work up to 20 hours per week during studies, with post-study work options of up to three years for STEM bachelor’s and master’s graduates and four years for doctoral graduates, strengthening the talent pipeline.
The agreement also creates dedicated professional pathways, including a quota of 5,000 visas for skilled Indian professionals for stays up to three years across priority sectors such as IT, engineering, healthcare, education, and construction, alongside recognised Indian professions including AYUSH practitioners, yoga instructors, chefs, and music teachers. A Working Holiday Visa quota of 1,000 places annually further supports short-term mobility and early-career exposure. Together, these measures enhance workforce planning and cross-border talent strategies for enterprises.
Services
The FTA delivers New Zealand’s most extensive services market access offer to date, reinforcing its relevance for service-led enterprises. Commitments cover 118 service sectors, providing enhanced certainty and non-discriminatory treatment for Indian providers. Moreover, Most-Favoured Nation treatment extends across 139 sectors, ensuring that any future liberalisation granted to other partners automatically benefits India.
Investment and Market Access Gains
Anchored by a long-term investment commitment, New Zealand plans to invest USD 20 billion in India over 15 years, signalling confidence in India’s growth and operating environment. For foreign businesses, this represents deeper capital integration and expanded opportunities across manufacturing, infrastructure, and services sectors.
On market access, New Zealand provides immediate zero-duty access on all 8,284 tariff lines from the Entry into Force, boosting competitiveness for Indian exporters. Previously applied tariffs of around 10% on roughly 450 key lines including textiles, apparel, leather, ceramics, carpets, automobiles, and auto components will be removed, reducing New Zealand’s average applied tariff from 2.2% to zero. These steps enhance trade efficiency, margins, and scalability for cross-border operations between the two countries.
Gains for Agro-Tech
The FTA encourages agri-technology collaboration, with New Zealand committing to Action Plans for kiwifruit, apples, and honey to enhance productivity, quality, and grower capabilities in India. Cooperation includes Centres of Excellence, improved planting material, grower training, and technical support covering orchard management, post-harvest practices, supply chains, and food safety.
These measures align with controlled market access for select New Zealand agricultural products through a Tariff Rate Quota system with minimum import prices and seasonal limits. Oversight by a Joint Agriculture Productivity Council ensures technology transfer and market access evolve together, balancing consumer choice with domestic protection.
Sector-wise Impact: Key Beneficiaries of the FTA
Agriculture
Current Exports:
USD 51.8 billion in 2024–25, up from USD 48.3 billion in 2023–24, reflecting 7.3% growth.
Tariff Coverage:
1,379 tariff lines, representing 17% of total product tariff lines, with tariff elimination up to a peak of 5%; tea already enjoys zero-duty access.
Impact and Opportunity:
Improved access for fruits and vegetables; stronger prospects for coffee, tea, cocoa, and spices in premium and value-added segments; enhanced competitiveness of cereal exports; and expanded opportunities for processed and ready-to-eat food products, supporting India’s food processing ecosystem.
Marine
Current Exports:
USD 7.0 billion in FY25, up from USD 6.8 billion in FY24; exports to New Zealand increased from USD 15.35 million to USD 15.89 million over the same period.
Tariff Coverage:
363 tariff lines, accounting for 4.4 percent of total tariff lines; pre-FTA tariffs of up to 5 percent reduced to zero under the agreement.
Impact and Opportunity:
Zero-duty access improves price competitiveness and supports expansion in a market where New Zealand’s global marine imports average USD 0.26 billion annually, creating scope for higher Indian export penetration
Textiles & Clothing
Current Exports:
USD 36.9 billion in 2024–25, up from USD 34.8 billion in 2023–24, reflecting 6.1 percent growth; exports to New Zealand increased from USD 98.14 million to USD 103.14 million.
Tariff Coverage:
1,057 tariff lines, representing 13 percent of total tariff lines; pre-FTA peak tariffs of up to 10 percent have been fully eliminated, providing zero-duty market access.
Impact and Opportunity:
Zero-duty access improves price competitiveness and supports expansion in a market where New Zealand’s global marine imports average USD 0.26 billion annually, creating scope for higher Indian export penetration.
Engineering Sector
Current Exports:
USD 77.5 billion in FY25, up from USD 64.4 billion in FY24, reflecting 20.3 percent growth; exports to New Zealand increased from USD 47.76 million to USD 68.26 million.
Tariff Coverage:
1,396 tariff lines, accounting for 16.9 percent of total tariff lines; pre-FTA average duties with peaks up to 10 percent have been eliminated.
Impact and Opportunity:
Zero-duty access enhances competitiveness in a market where New Zealand’s global engineering imports average USD 11 billion, supporting expanded market access and sustained export growth.
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Conclusion
The India–New Zealand Free Trade Agreement represents a strategically significant advance in India’s trade framework, offering tangible outcomes across goods, services, investment, and mobility. For global business leaders, it provides enhanced market access, lower tariff barriers, and a predictable operational environment supporting long-term planning and cross-border growth.
By combining full duty elimination on Indian exports with carefully structured domestic protections and forward-looking sectoral collaboration, the FTA strengthens India’s position as a competitive manufacturing hub, services destination, and talent partner. As implementation progresses, it is set to deepen bilateral integration, improve supply chain linkages, and generate lasting opportunities for businesses engaging with both markets, supported by efficient company registration services in India.
