India and New Zealand announced a free trade agreement Monday that will eliminate tariffs on a majority of goods traded between the two countries. The deal, which will be reviewed after one year and signed in the first half of next year, aims to boost economic ties and facilitate greater mobility of professionals and students.
India-New Zealand Free Trade Agreement Details
The trade pact will eliminate and reduce tariffs on 95% of New Zealand’s exports, with nearly 57% becoming duty-free in India “from day one,” according to New Zealand Trade and Investment Minister Todd McClay.
New Zealand will invest $20 billion in India over the next 15 years and allow increased mobility of Indian professionals, skilled labor, and students. India, in turn, has secured zero-duty market access for all its exports to New Zealand, including textiles, apparel, leather, footwear, marine products, gems and jewelry, handicrafts, engineering goods, and automobiles.
“Today this Free Trade Agreement is about building trade around people and launching opportunities,” said India’s Commerce Minister Piyush Goyal. He added the deal will provide Indian businesses and youth with opportunities to “learn, work and grow on a global stage.”
Tariff Reductions and Exclusions
India will eliminate tariffs on sheep meat, wool, coal, and most forestry and wood exports. New Delhi will also allow duty-free access for dairy and other food ingredients for re-exports.
However, to protect domestic industries, New Delhi has excluded dairy, coffee, milk, cream, cheese, yoghurts, whey, caseins, onions, sugar, spices, edible oils, and rubber from the market access concessions.
Ranjeet Mehta, chief executive officer and secretary general of Indian industry body PHDCCI, stated the pact “provides policy certainty and lowers input costs for manufacturing, creating a vision for long-term economic resilience.”
Trade Statistics and Broader Context
Bilateral merchandise trade between India and New Zealand stood at $1.3 billion in 2024–25, with total trade in goods and services reaching $2.4 billion in 2024. The FTA is expected to unlock the full potential of this relationship, according to India’s commerce ministry.
This agreement marks India’s third free trade deal this year, following pacts with the UK in July and Oman earlier this month. The deals come as the U.S. has imposed 50% tariffs on certain Indian goods exports, including 25% duties on purchases of Russian oil.
India, aiming to become an export powerhouse, is diversifying its exports to mitigate the impact of U.S. tariffs. Following the implementation of steep U.S. tariffs in August, India’s exports to the U.S. experienced a decline of nearly 12% in September and 8.5% in October, before a 22.6% increase in November.
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