India-New Zealand FTA: Can the trade deal deliver stable growth or just hype? Explained

“It reflects the deep trust, shared values and ambition that bind our two nations,” PM Modi said in a post on X responding to Luxon’s post. The agreement between India and New Zealand marks the culmination of negotiations that began in 2010, stalled in 2015 after nine rounds, and were revived in March 2025 before concluding in December last year making it one of India’s fastest-concluded FTAs.

A new analysis by Rubix Data Sciences shows that the India–New Zealand free trade agreement comes at a time when trade momentum had started weakening. According to the analysis, total bilateral goods trade rose to about $1.26 billion in FY25, it dropped to nearly $1.05 billion in FY26 (April–February). The decline was mainly due to a sharp fall in India’s exports, which slipped from around $711 million to about $524 million. Imports from New Zealand into India remained relatively steady at over $530 million, which led to a steep fall in India’s trade surplus to just about $9.4 million. Rubix says this trend shows the pact is coming at a time when there is a need for a more stable trade framework.

Even though New Zealand is still a small trading partner for India, ranking only around 80th in exports and 73rd in imports, the deal is seen as a way to unlock future growth. Rubix analysis shows that New Zealand can act as a gateway to Oceania and Pacific Island markets, which gives the agreement a wider regional importance. The presence of around 300,000 people of Indian origin, nearly 5% of New Zealand’s population, also strengthens business and cultural ties

Changing scenario of export and import mix

The report points to a clear change in what India trades with New Zealand. On the export side, higher-value goods are gaining importance. Pharmaceutical products increased their share from 9% in FY22 to 10% in FY26. While passenger vehicles rose from 2% to 5%. Refined petroleum products also emerged as a key category, jumping to about 5%. At the same time, traditional segments like bed linen and jewellery remained stable but did not grow as fast. On the import side, India is increasingly dependent on raw materials. Wood logs and ferrous scrap both doubled their share to about 13%, while coal imports also rose sharply. This shows that trade is becoming more focused and linked to industrial demand.

Rubix notes that the agreement directly addresses these gaps by improving market access. New Zealand will remove tariffs on all Indian goods, covering more than 8,000 product lines. This gives Indian exporters full duty-free entry and makes sectors like textiles, leather, and footwear more competitive. India will open about 70% of its tariff lines, but will continue to protect sensitive sectors like dairy. The deal will also make key imports such as coking coal and wood cheaper, which can support domestic industries.

According to the analysis, the agreement is not limited to goods. New Zealand has offered access across a large number of services sectors, which could help Indian firms expand globally. There is also a focus on promoting India’s traditional systems like Ayurveda and yoga. At the same time, Indian students will be allowed to work part-time, and skilled professionals will get dedicated visa pathways. These steps aim to make movement of people easier and strengthen economic links beyond trade.

Long-term investment and growth outlook

Rubix says New Zealand has committed to investing $20 billion in India over the next 15 years, while both sides are looking to expand cooperation in agriculture, MSMEs, and technology. Despite recent fluctuations, trade between the two countries has grown steadily over the past few years, crossing the $1 billion mark. However, New Zealand still ranks low among India’s trading partners, which means there is large untapped potential. The analysis says the FTA could help make trade more stable, predictable, and growth-oriented in the coming years.