New Zealand and India Conclude Landmark Free Trade Agreement

Historic Agreement Reached After Swift Negotiations

New Zealand and India have officially concluded negotiations for a comprehensive Free Trade Agreement (FTA), marking a significant milestone in bilateral economic relations. The agreement, finalized on December 22, 2025, was lauded as one of India's fastest-concluded FTAs, with negotiations commencing in March 2025 and concluding within nine months. This landmark deal is set to provide New Zealanders with unprecedented access to 1.4 billion Indian consumers, while also offering substantial benefits for Indian exporters.

The formal signing of the agreement is anticipated in the first half of 2026, following the completion of domestic processes and ratification in both countries.

Key Benefits for New Zealand Exporters

Under the new FTA, New Zealand exporters are poised to gain significant advantages. The agreement will eliminate or reduce tariffs on 95% of New Zealand's exports to India. Specifically:

• 57% of New Zealand's exports will become duty-free from day one.
• This figure will rise to 82% upon full implementation of the agreement.
• Immediate tariff elimination applies to sectors such as sheep meat, wool, coal, and over 95% of forestry and wood products.
• Most seafood exports, including mussels and salmon, will see duty-free access phased in over seven years.
• Tariffs on mānuka honey will be cut by 75% over five years, making New Zealand the first country to secure preferential access for honey in an Indian FTA.
• Wine tariffs will be reduced by 66-83% over ten years.
• New quota access has been secured for kiwifruit and apples, with tariffs on apples cut by 50% for a large quota.
• Duty-free access will also be granted for cherries, avocados, blueberries, and persimmons over ten years.

While India has largely protected its domestic dairy sector from tariff concessions, the agreement includes provisions for preferential access for dairy ingredients intended for further manufacturing and export.

Opportunities for India and Enhanced Bilateral Ties

The FTA is equally beneficial for India, providing 100% duty-free market access on all tariff lines for Indian exports to New Zealand. This will particularly benefit India's labour-intensive sectors, including textiles, apparel, leather, footwear, marine products, gems and jewelry, handicrafts, engineering goods, and automobiles.

Beyond trade in goods, the agreement includes a substantial commitment from New Zealand to invest USD 20 billion in India over the next 15 years, fostering long-term economic and strategic cooperation. Mobility pathways have also been enhanced, with New Zealand offering 1667 temporary three-year non-renewable work visas annually for Indian nationals in priority sectors such as doctors, nurses, teachers, ICT, and engineering. An additional 1000 places each year will be allocated under the Working Holiday Scheme for Indian nationals.

The agreement also features a first-ever Annex on Health and Traditional Medicine Services signed by New Zealand, promoting cooperation in areas like AYUSH systems.

Economic Impact and Future Outlook

The current two-way total trade between India and New Zealand stands at approximately NZ$3.68 billion annually (year ended June 2025). India is New Zealand's 12th largest goods and services export market. The FTA is projected to significantly boost these figures, with forecasts suggesting New Zealand's exports to India could increase by $1.1 billion to $1.3 billion per year over the coming decades. The overarching goal is to double bilateral trade to $5 billion within five years.

This agreement underscores a shared commitment to open, rules-based trade and is expected to strengthen the economic presence of both nations in the Indo-Pacific region.