July 9: India and New Zealand launched negotiations for a Free Trade Agreement in March 2025 and concluded it by December 2025, making it one of India’s fastest finalised trade deals. The agreement significantly improves market access and tariff preferences for Indian exports to New Zealand, while also positioning New Zealand as a gateway to the broader Oceania and Pacific Island markets. As India’s second-largest trading partner in Oceania, New Zealand shares strong ties supported by a diaspora of around 300,000 persons of Indian origin, nearly 5% of its population, which strengthens cultural and economic linkages. The FTA was signed on 27 April 2026 and covers four key areas, including trade in goods , agriculture and MSME development, services and technical cooperation, as well as investment, mobility, and people-to-people connections.
1. Trade in Goods
• Comprehensive Tariff Elimination by NZ: The FTA ensures 100% duty-free access for Indian exports, with New Zealand eliminating tariffs on all 8,284 tariff lines from entry into force. While around 450 tariff lines covering key Indian exports attracted tariffs of about 10%, New Zealand’s average applied tariff on Indian exports was 2.2% in 2025. Tariff elimination gives Indian exporters complete market access and enhances their competitiveness.
• Boost to Labour-Intensive Sectors: Key sectors like textiles, apparel, leather, and footwear gain a significant competitive advantage through duty-free access.
• Support for Advanced Industries: Engineering goods, automobiles, pharmaceuticals, electronics, chemicals, and machinery sectors will see expanded export opportunities. • Expanded Access for Agricultural Products: Indian agri exports such as fruits, vegetables, coffee, spices, cereals, and processed foods gain improved market entry.
• Cheaper Imports for Industry Inputs: India benefits from reduced-cost imports like wooden logs, coking coal, and metal scrap to support domestic manufacturing.
• India’s Tariff Liberalisation Strategy: India offers access to 70.03% of tariff lines, with 30% immediate elimination and the rest phased over time.
• Sensitive Sectors Kept Excluded: India protects key sectors like dairy, certain crops, metals, and strategic goods by keeping them outside the agreement.
2. Agriculture, MSMEs, and Domestic Capacity Building
• Agricultural Productivity Collaboration Framework: Partnership initiatives aim to improve farm productivity and integrate Indian farmers into global value chains.
• MSME Growth and Employment Boost: Zero-duty access enhances the competitiveness of MSMEs and promotes job creation in labour-intensive sectors.
• MSME Cooperation and Market Access: Institutional mechanisms will support small businesses in accessing trade-related information and integrating into global markets. • Mutual Recognition of Organic Products: Both countries will work towards mutual recognition of organic certification to ease the trade in organic primary products.
3. Trade in Services and Technical Cooperation
• Comprehensive Services Market Access: New Zealand offers commitments in 118 service sectors with MFN treatment in 139 sectors, its most extensive ever.
• Recognition of Traditional Medicine Systems: For the first time, an annex facilitates trade in Ayurveda, Yoga, and other traditional medicine services, promoting global recognition of India’s AYUSH systems. It encourages medical value travel, supports collaboration in wellness services, and strengthens India’s position as a global hub for health and traditional medicine.
• Expanded Technical Cooperation Areas: The collaboration will extend to AYUSH, audiovisual industries, tourism, sports, and traditional knowledge systems, further promoting India’s wellness sector globally.
4. Investment, Mobility, and People-to-People Links
• Strong Long-Term Investment Commitment: New Zealand has committed to invest USD 20 billion in India over 15 years, reinforcing long-term economic cooperation.
• Student Mobility and Work Rights: Indian students can work 20 hours weekly and access extended post-study work visas (up to 4 years depending on qualification).
• Skilled Professionals Mobility Pathways: 5,000 visas annually allow Indian professionals across sectors like IT, healthcare, and education to work up to 3 years.
• Working Holiday Opportunities for Youth: 1,000 young Indians can live and work in New Zealand for 12 months with multiple entry flexibility.
Importance of India–New Zealand FTA
India–New Zealand merchandise trade surpassed the USD 1 billion (USD 1,298 million) milestone for the first time in FY2025. However, it moderated to USD 1,155 million in FY2026, a 11% decline y-o-y. Despite this temporary slowdown, bilateral trade remains well above historical levels, highlighting significant untapped potential that a Free Trade Agreement (FTA) could unlock through improved market access, lower trade barriers, and stronger trade facilitation, particularly amid an increasingly volatile global trade environment.
Despite steady engagement, New Zealand remains a relatively minor trading partner for India, ranking 80th in exports and 74th in imports, highlighting substantial scope for diversification and expansion of bilateral trade flows.
According to an analysis by Rubix Data Sciences
Export momentum eases in FY2026: India’s exports to New Zealand grew at a 4% CAGR over FY2022– FY2026 but declined from USD 711 million in FY2025 to USD 566 million in FY2026, recording a 20% y o-y decline, indicating moderation after a strong FY2025.
Imports show sustained growth from FY2024: Imports from New Zealand increased at a 12% CAGR, rising from USD 375 million in FY2022 to USD 589 million in FY2026, reflecting stronger demand for New Zealand-origin goods.
Total trade expands overall: Total merchandise trade recorded an 8% CAGR, increasing from USD 862 million in FY2022 to USD 1,155 million in FY2026, despite easing from the FY2025 peak of USD 1,298 million.
India’s goods surplus turns into deficit in FY2026: India’s trade balance shifted from a USD 113 million surplus in FY2022 to a USD 23 million deficit in FY2026, as faster import growth outpaced exports.
Export basket shifting toward high-value, concentrated, and growth-oriented sectors India’s exports to New Zealand show a clear structural shift towards a more focused and value-driven basket between FY2022 and FY2026. The rising share of pharmaceutical products (9% to 10%) signals sustained competitiveness in regulated, high-value sectors, while the sharp increase in passenger vehicles (2% to 5%) points to improving market penetration in durable goods. Notably, the emergence of refined petroleum products from negligible levels to 5% reflects opportunistic expansion into energy-linked exports, likely driven by pricing dynamics and refining capacity. In contrast, relatively stable shares of bed linen and jewellery articles indicate mature, steady demand segments. The decline in “Others” from 84% to 74% is a sign of increasing export concentration during a transition from a fragmented basket towards strategically competitive product categories.
Import basket increasingly focused on core raw materials and industrial inputs India’s imports from New Zealand are dominated by raw materials, with notable shifts in sourcing patterns over the same period. The import of wood logs has increased sharply from 6% to 13%, becoming a major category driven by construction and furniture demand. Ferrous scrap imports have risen significantly from 7% to 12%, in keeping with growing requirements in steel recycling. The share of coal imports has grown by more than twice from 4% to 11% to support industrial energy needs, while aluminium scrap has retained its share of 8%. In contrast, the share of raw wool imports has declined from 10% to 8%. The “Others” category has contracted sharply from 65% to 48%, indicating a clearer concentration in core commodity imports.