India and New Zealand on Monday signed a long-awaited free trade agreement (FTA). The deal is being touted as a major step towards strengthening bilateral economic ties and opening new opportunities across goods, services, investment and labour mobility between the two countries. The FTA concluded a negotiation process that began in 2010, stalled in 2015 after multiple rounds and was revived in March 2025 before being finalised in December.
The agreement was formalised in the presence of Commerce Minister Piyush Goyal and his New Zealand counterpart Todd McClay. Prime Minister of New Zealand Christopher Luxon described the deal as a “once-in-a-generation” partnership.
Following the deal, PM Narendra Modi said, “This agreement will greatly benefit our farmers, youth, women, MSMEs, artisans, startups, students and innovators. It will open new avenues for growth, create opportunities and deepen our synergy across sectors. The investment commitment of $20 billion by New Zealand will further strengthen our cooperation in agriculture, manufacturing, innovation and technology, paving the way for a more prosperous and dynamic future for both countries.”
Speaking at the signing ceremony, Goyal said India was actively working to simplify regulations and reduce compliance burdens to create a more business-friendly environment. He invited global companies to invest in India and positioned the country as a gateway to major global markets including Africa, Latin America, Central Asia, the United States and Europe.
“This can become your gateway to the entire world,” Goyal said, emphasising India’s push to attract investment and boost manufacturing-led growth.
Tariff cuts and sectoral impact
Under the agreement, New Zealand will provide 100% duty-free access across all its tariff lines, significantly improving market access for Indian exporters. According to Agneshwar Sen, Trade Policy leader, EY India, this move will benefit sectors such as textiles, apparel, leather, pharmaceuticals, machinery and auto components, many of which previously faced tariffs of up to 10%.
India, in turn, has adopted a calibrated approach. It will eliminate tariffs on around 30% of tariff lines immediately, with phased reductions on another 35.6%, while excluding sensitive sectors such as dairy, edible oils, sugar and key agricultural commodities to protect domestic producers.
“Crucially, India has secured this without compromising its most sensitive sectors. Dairy, edible oils, sugar, spices, onions, and key agricultural commodities are explicitly excluded from India’s concession list, protecting domestic farmers and industry,” Sen added.
Gautam Khattar, Principal, Price Waterhouse & Co LLP said the agreement strikes a balance between market access and domestic safeguards. Tariff-rate quotas and minimum import prices have been built in to shield Indian farmers, while targeted concessions focus on inputs such as wool, coal and forestry products that support manufacturing.
Boost to services, mobility and food processing
Beyond goods, the FTA expands opportunities for Indian professionals in sectors such as IT, healthcare, engineering and education through enhanced mobility provisions. “Tariff‑rate quotas with minimum import prices safeguard domestic farmers, while explicit recognition of AYUSH and related wellness services expands opportunities for Indian practitioners in New Zealand,” Khattar added.
A key feature is a fast-track mechanism that allows Indian food processors to import New Zealand raw materials duty-free for processing and re-export, supporting India’s ambition to position itself as a global food processing hub.
The pact is expected to deepen economic engagement between the two countries, while reinforcing India’s broader strategy of securing high-quality trade agreements to integrate more closely with global supply chains.