India and the New Zealand on Monday are signing the India-New Zealand Free Trade Agreement (FTA) in the presence of Commerce and Industry Minister Piyush Goyal and New Zealand’s Trade and Investment Minister Todd McClay. The agreement is expected to significantly strengthen economic ties between the two countries. It aims to double bilateral trade, provide Indian exporters duty-free access to the New Zealand market, and attract investments worth $20 billion over the next 15 years.A free trade agreement is a pact between two or more nations under which they agree to eliminate or substantially lower customs duties on a wide range of traded goods. It also seeks to reduce other barriers that may affect trade and investment between the participating countries.Ahead of the signing, Goyal on Sunday said that the free trade agreement with New Zealand,will open up substantial opportunities for Indian businesses, including leather exporters based in Agra.Goyal said that products shipped from India to New Zealand would enter the market without any import duties, creating major growth prospects for sectors such as Agra’s leather industry. He added that the pact would further enhance two-way trade, which currently stands at around $2.4 billion.Goyal was Agra alongside New Zealand’s Trade and Investment Minister Todd McClay. During their visit, the two ministers interacted with industry representatives from a range of sectors, including leather and sports goods.
India-New Zealand FTA: Top Points
Negotiations for the India-New Zealand trade pact originally began in 2010. After nine rounds of discussions, talks were put on hold in 2015. They were revived in March 2025, marking a fresh start to the process. The successful conclusion of the talks was announced on December 22, 2025.
- The pact has 20 chapters covering key areas such as trade in goods, rules of origin, services, customs procedures and trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, trade remedies, dispute resolution, and legal frameworks.
- For India, the agreement offers significant advantages. All Indian exports to New Zealand, including products from labour-intensive industries such as textiles, plastics, leather, and engineering goods, will enjoy duty-free access. New Zealand’s average import tariff currently stands at just 2.3 per cent. New Zealand has also committed to investing $20 billion in India over the next 15 years.
- In services, India has secured market access commitments across several high-value sectors, including information technology and IT-enabled services, professional services, education, financial services, tourism, construction, and a range of other business services.
- The agreement also creates new opportunities for skilled Indian professionals through a Temporary Employment Entry Visa pathway. This route will allow up to 5,000 Indian professionals in skilled occupations to stay and work in New Zealand for a period of up to three years at any given time.
- Additionally, Indian exports of wine and spirits will receive duty-free access to the New Zealand market. At the same time, wines imported from New Zealand will enter India at concessional tariff rates, with duties to be reduced gradually over a 10-year period.
- For New Zealand, the agreement provides substantial access to the Indian market. Following the framework adopted in India’s trade pact with Australia, India has opened 70 per cent of its tariff lines to New Zealand.
- India has also granted tariff concessions on agricultural products including apples, kiwifruit, manuka honey, and albumins, including milk albumin. However, these benefits will be subject to quota limits and minimum import price requirements.
- In addition, tariffs on a range of iron, steel, and scrap aluminium products will be gradually eliminated over a period of up to 10 years.
At the same time, India has protected its domestic interests by withholding tariff concessions in several sensitive sectors. Items placed on the exclusion list include dairy products such as milk, cream, whey, yoghurt, and cheese; animal products other than sheep meat; and a variety of vegetable products, including onions, chana, peas, corn, and almonds. Sugar, artificial honey, and animal, vegetable, or microbial fats and oils are also excluded.The exclusion list further covers arms and ammunition, gems and jewellery, copper and copper products such as cathodes, cartridges, rods, bars, and coils, as well as aluminium and related products including ingots, billets, and wire bars.Merchandise trade between the two countries was at $1.3 billion in 2024-25. India exported goods worth $711.1 million, while imports from New Zealand amounted to $587.13 million during the same period.