India–New Zealand Free Trade Agreement Announced After PM-Level Talks

Prime Minister Narendra Modi on Monday held a telephone conversation with his New Zealand counterpart Christopher Luxon, during which the two leaders jointly announced the conclusion of a landmark India–New Zealand Free Trade Agreement (FTA).

The leaders said the agreement would act as a major boost to trade, investment, innovation and shared economic opportunities between the two countries. They also welcomed progress in other areas of bilateral cooperation, including defence, sports, education and people-to-people ties.

Negotiations for the FTA were launched during Prime Minister Luxon’s visit to India in March 2025. The leaders noted that concluding the agreement in a record nine months reflects the strong political will and shared ambition to deepen India–New Zealand relations.

According to official statements, the FTA is expected to significantly enhance bilateral economic engagement by improving market access, encouraging investment flows and strengthening strategic cooperation. The agreement is also expected to open new opportunities for innovators, entrepreneurs, farmers, MSMEs, students and young professionals in both countries.

With the FTA providing a strong foundation, both leaders expressed confidence that bilateral trade could double over the next five years. New Zealand has also committed to invest USD 20 billion in India over a 15-year period, broadly following the European Free Trade Association (EFTA) investment model. This investment commitment will be supported by a rebalancing mechanism, allowing trade concessions to be suspended if investment targets are not met.

Prime Minister Luxon, in a post on X, said the agreement would reduce or remove tariffs on 95 per cent of New Zealand’s exports to India.

"I've just spoken with India's Prime Minister Narendra Modi following the conclusion of the NZ-India Free Trade Agreement. The FTA reduces or removes tariffs on 95% of our exports to India. It's forecast that NZ exports to India could increase $1.1B to $1.3B per year over the coming two decades. Boosting trade means more Kiwi jobs, higher wages and more opportunities for hard working New Zealanders. The agreement builds on the strong friendship between our two countries. India is one of the fastest-growing economies in the world, and this gives Kiwi businesses access to 1.4 billion Indian consumers. Our Government is relentlessly focused on fixing the basics and building the future - with new trade deals like this helping to grow our economy so all Kiwis can get ahead,” he wrote.

The agreement places strong emphasis on services and mobility. New Zealand has offered market access in 118 services sectors and sub-sectors and extended Most Favoured Nation (MFN) treatment in 139 services sectors. An annex on health and traditional medicine services has been included, marking the first time New Zealand h as signed such an arrangement with any country.

Special provisions have also been made for Micro, Small and Medium Enterprises (MSMEs), aimed at strengthening cooperation, improving institutional linkages and enhancing access to trade-related information.
On student and professional mobility, New Zealand has signed an Annex on Student Mobility and Post-Study Work Visas for the first time with any country. Indian students will continue to enjoy 20 hours per week work rights, with no numerical caps. Post-study work visas of up to three years have been agreed for STEM bachelor’s and master’s graduates, and up to four years for doctorate holders.

A new Temporary Employment Entry Visa pathway has also been created, allowing up to 5,000 Indian professionals at any time to work in New Zealand for up to three years in skilled occupations, including IT, engineering, healthcare, education and construction, as well as roles such as AYUSH practitioners, yoga instructors, Indian chefs and music teachers. In addition, a Working Holiday Visa with multiple entry for 1,000 young Indians annually has been agreed.

India, in return, has offered market access to New Zealand in 106 services sectors and extended MFN treatment in 45 services sectors. In goods trade, India’s average MFN tariff of 16.2 per cent will be reduced to 13.18 per cent when the agreement comes into force, further lowering to 10.30 per cent after five years and 9.06 per cent by the tenth year.

Market access has been offered on over 70 per cent of tariff lines, while nearly 30 per cent have been excluded to protect sensitive sectors such as dairy, sugar, fats and oils, gems and jewellery, arms and ammunition, and certain metal products.

Bilateral trade between India and New Zealand has shown steady growth, with merchandise trade reaching USD 1.3 billion in 2024–25. Total trade in goods and services stood at around USD 2.4 billion in 2024, with services trade accounting for USD 1.24 billion.

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