New Zealand and India announced on Monday the conclusion of negotiations on a free trade agreement, which is expected to significantly boost economic ties and help double bilateral trade over the next five years.
According to a report by Reuters, under the agreement, tariffs will be eliminated or reduced on 95% of New Zealand’s exports to India, with more than half of those products set to become duty-free from the first day the pact comes into force. In return, all Indian goods will receive duty-free access to the New Zealand market. New Zealand has also committed to investing $20 billion in India over the next 15 years.
“The gains are wide-ranging and significant,” New Zealand Prime Minister Christopher Luxon said in a statement.
“India is the world's most populous country and is the fastest-growing big economy, and that creates opportunities for jobs for Kiwis, exports and growth,” he added, as quoted by Reuters.
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The deal fulfils a 2022 election promise made by New Zealand’s governing National Party to finalise a free trade agreement with India within its first term in office.
As reported by Reuters, two-way trade between the two countries stood at approximately $1.81 billion in 2024, with India primarily exporting pharmaceuticals to New Zealand, while New Zealand’s exports were dominated by forestry and agricultural products. However, this trade volume remains small compared with India’s total goods trade, which exceeded $1 trillion in the 2024–25 financial year.
“Concluded in just nine months, this historic milestone reflects a strong political will and shared ambition to deepen economic ties between our two countries,” Indian Prime Minister Narendra Modi said in a social media post, Reuters has quoted.
India said the agreement excludes market access for sensitive sectors, including dairy, coffee, milk, cream, cheese, yoghurt, whey, caseins, onions, sugar, spices, edible oils and rubber, citing the need to protect domestic farmers and industries.
The deal comes as India accelerates trade negotiations with global partners to diversify exports following Washington’s decision to impose a 50% tariff on Indian goods entering US markets. The agreement with New Zealand marks India’s third trade deal this year, following pacts with Oman and the United Kingdom, as reported by Reuters.
Parliamentary approval still uncertain
The agreement is expected to be signed in the first half of 2026, according to the New Zealand government. However, parliamentary approval remains uncertain.
New Zealand First, a coalition partner of the National Party holding eight of the 123 seats in parliament, has said it will oppose the deal. NZ First leader Winston Peters said his party would vote against the agreement, arguing it does not adequately benefit New Zealand.
The deal “gives too much away, especially on immigration, and does not get enough in return for New Zealanders, including on dairy, Peters said in a statement, as quoted by Reuters.
While the governing coalition holds 67 seats, the Nationals have only 48 and rely on support from coalition partners, including New Zealand First, to pass legislation.
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