India and New Zealand struck a free trade agreement (FTA) on Monday, marking the end of negotiations that began back in March this year. The agreement was unveiled after a telephone conversation between PM Modi and New Zealand’s PM Christopher Luxon. During the call, the two leaders described the India–New Zealand Free Trade Agreement as historic, ambitious and mutually beneficial, saying that it would act as a catalyst for deeper trade, investment, innovation and shared opportunities between the two countries. They also welcomed progress across other areas of bilateral cooperation, including defence, sports, education and people-to-people ties. Negotiations for the FTA were initiated during Luxon’s visit to India. The leaders noted that the successful conclusion of the agreement within a record nine months reflected strong political will and a shared ambition to further strengthen bilateral ties.Hailing the deal, PM Modi said, “My friend PM Christopher Luxon and I had a very good conversation a short while ago following the conclusion of the landmark India-New Zealand Free Trade Agreement.”Luxon also took to X, saying, “I’ve just spoken with India’s Prime Minister Narendra Modi following the conclusion of the NZ-India Free Trade Agreement … 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.”The PM further wrote, “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.”
India-New Zealand Free Trade Agreement
The FTA is expected to significantly deepen economic engagement, improve market access, boost investment flows and strengthen strategic cooperation, while opening up new opportunities for innovators, entrepreneurs, farmers, MSMEs, students and youth in both countries across multiple sectors.Both leaders are confident that bilateral trade could double over the next five years.
- Investment: Under the FTA, India will receive $20 billion in investment from New Zealand over the next 15 years.
- Key sectors: A major highlight of the agreement is the focus on services and mobility. India has secured market access in New Zealand across 118 services sectors and sub-sectors, while also receiving Most Favoured Nation (MFN) treatment in 139 services sectors, strengthening opportunities for Indian professionals and service providers in the New Zealand market.
- Healthcare: An annex on health and traditional medicine services has also been included to facilitate trade in health-related and traditional medicine services, marking the first time New Zealand has signed such an annex with any country.
- Tariffs: Under the agreement, tariffs will be eliminated or reduced on 95% of New Zealand’s outflows to the country, which is one of the highest coverage achieved under any Indian FTA. At the same time, 57% of exports to India will be duty-free from day one, rising to 82% once the agreement is fully implemented, with the remaining 13% subject to significant tariff reductions.
The two leaders agreed to remain in touch as the partnership enters a new phase following the signing of the agreement.
