FTA Opens Indian Market to New Zealand, Expands Services Access for India

India and New Zealand have successfully concluded a landmark Free Trade Agreement, announced on December 22, 2025, marking a significant milestone in bilateral economic relations between the two nations. Prime Ministers Narendra Modi and Christopher Luxon confirmed the deal's finalization, emphasizing its potential to dramatically expand market access, foster investment, and create substantial opportunities for businesses, innovators, entrepreneurs, farmers, and youth in both countries. This agreement is poised to deepen strategic cooperation and elevate trade ties to unprecedented levels.

The FTA eliminates or substantially reduces tariffs on approximately 95% of bilateral trade, covering 70% of India's tariff lines, while strategically excluding sensitive sectors such as dairy, animal products, and certain agriculture to safeguard domestic interests. Key provisions include enhanced access for Indian services in 118 categories, particularly in information technology, alongside provisions for 5,000 temporary work visas for Indian professionals in fields like engineering, healthcare, education, yoga, and culinary arts. Additionally, Indian students will benefit from unrestricted part-time work rights and post-study visa options, further strengthening people-to-people connections.

For New Zealand exporters, the agreement introduces managed access for products like apples, kiwifruit, and Manuka honey through tariff-rate quotas, minimum import prices, and seasonal restrictions, ensuring protection for Indian farmers against potential surges. Projections indicate that New Zealand's annual exports to India could rise by $1.1 billion to $1.3 billion over the next two decades, directly contributing to job creation, higher wages, and economic growth in New Zealand by opening doors to India's vast market of 1.4 billion consumers.

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Both leaders expressed strong optimism about the deal's transformative impact, with a shared goal to double current bilateral trade—valued at around $2.4 billion—within the next five years. The agreement also encompasses robust frameworks for intellectual property rights, investment facilitation, and streamlined customs procedures, alongside ambitions for $20 billion in New Zealand investments into India over 15 years. This comprehensive pact is expected to bolster fiscal resilience and promote inclusive growth across diverse sectors.

Following legal review and ratification processes, the formal signing is anticipated within three months, paving the way for full implementation within eight months. This timely execution underscores the commitment of both governments to capitalize on emerging opportunities in one of the world's fastest-growing economies, setting a foundation for sustained prosperity and mutual benefit in the years ahead.

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