On December 22, 2025, India and New Zealand concluded negotiations on a landmark Free Trade Agreement (FTA) that will significantly reduce trade barriers and make the majority of goods traded between them duty-free. The announcement, welcomed by leaders from both nations, signals a major step forward in strengthening economic ties and fostering long-term collaboration in trade, investment, and bilateral relations.
The agreement represents one of the fastest negotiated FTAs in India’s history, concluding after roughly nine months of talks that resumed in March 2025 following a ten-year hiatus. The pact is expected to be formalized by early 2026 and implemented soon thereafter, contingent on legislative approvals in both countries.
At its core, the FTA aims to liberalize trade by eliminating tariffs on the vast majority of goods exchanged between India and New Zealand. Under the terms of the agreement, New Zealand will provide zero-duty access for 100 % of Indian exports, giving Indian goods duty-free market access across sectors such as textiles, apparel, leather, footwear, marine products, gems and jewellery, engineering goods, automobiles, and more. Conversely, India has committed to reducing or removing tariffs on about 95 % of New Zealand’s exports, with a significant portion becoming duty-free immediately and the rest receiving sharp tariff cuts over time.
This broad duty-free framework is expected to unlock new opportunities for businesses and producers in both countries. For India, the zero-duty access opens up the New Zealand market—small in absolute size but strategically important as a gateway to further Pacific and global trade. It especially benefits labour-intensive industries and MSMEs (Micro, Small & Medium Enterprises) by enhancing competitiveness and export potential.
For New Zealand, the agreement dramatically improves access to India’s massive consumer market of 1.4 billion people, particularly as India’s middle class continues to grow. Sectors such as horticulture (fruit exports), wool, forestry products, seafood, coal, and industrial materials stand to benefit from reduced or eliminated tariffs. Immediate duties have been scrapped on major exports like sheep meat and wool, while other product categories will see phased tariff removal.
Beyond tariff liberalization, the trade pact includes complementary commitments designed to deepen economic integration. These cover cooperation on services, investments, and regulatory measures such as customs facilitation, sanitary and phytosanitary standards, and technical barriers to trade. Notably, the deal also includes expanded visa pathways and professional mobility, reflecting a mutual interest in strengthening people-to-people links and labour cooperation.
An important strategic element of the pact is New Zealand’s $20 billion investment pledge in India over the next 15 years, which underscores confidence in India’s economic growth trajectory and the potential for sustained bilateral commercial engagement.
Despite broad benefits, there are some sensitive exclusions. India has maintained protections for certain agricultural and food items,such as particular dairy products and other goods,citing domestic sensitivities and the need to safeguard local producers. However, vast sections of trade will still see meaningful tariff reductions or elimination.
Economists and policymakers see this agreement as part of India’s broader strategy to diversify its trade partnerships and reduce dependence on traditional markets amid global economic uncertainties and rising trade tensions elsewhere. Alongside other deals concluded in 2025, including with the UK and Oman, the India–New Zealand FTA exemplifies New Delhi’s proactive push toward greater global economic integration.
In summary, the India,New Zealand free trade pact marks a historic milestone in the economic relations of both countries. By making the majority of goods trade duty-free, it expands market opportunities, strengthens bilateral cooperation, and creates a framework for sustained growth and shared prosperity in the coming decades.