India and New Zealand have concluded a free trade agreement, which seeks to deepen economic ties and sustain growth in both countries, at a time of increasing global trade uncertainty, Indian authorities announced today.
The agreement comes at a time when New Delhi is accelerating efforts to diversify the destinations of its exports as part of a strategy to offset the impact of tariffs imposed by the United States on imports of Indian products.
The formal signing of the agreement between India and New Zealand is scheduled for the first quarter of next year, once the legal review of the negotiated text is completed, India’s main negotiator, Petal Dhillon, announced in statements to journalists.
The India-New Zealand trade agreement, negotiated over nine months, aims to reduce tariffs, reduce regulatory barriers and expand cooperation in goods, services and investments, and is the result of India’s effort to sign commercial partnerships that go beyond traditional markets, in a context in which global trade faces pressures arising from unpredictable tariffs and geopolitical tensions, slowing growth and increasing protectionism.
As part of the agreement, India will benefit from tax exemptions for products exported to New Zealand, while Wellington will obtain tariff concessions and access to the Indian market for 95% of its exports, gradually.
India’s key sectors that will benefit from the tariff exemption include textiles, apparel, engineering products, leather and footwear and marine products, while New Zealand’s main gains will be in horticulture, timber exports and sheep’s wool, among others.
New Zealand has committed to investing $20 billion (€17 billion) in India over a 15-year period as part of the deal, India’s Ministry of Commerce said.
India excluded imports of dairy products such as milk, cream, whey, yogurt and cheese, along with animal and plant products including goat meat, onions and almonds, from the agreement, citing “domestic sensitivities”.
Bilateral trade between India and New Zealand remains modest compared with New Delhi’s biggest trading partners, but Indian officials say the deal has strong growth potential. Bilateral trade, including goods and services, reached 2.4 billion dollars (2 billion euros) in 2024, a value that the two parties hope to double in around five years, said Indian Secretary of Commerce, Rajesh Agarwal, cited by the Associated Press.
New Zealand Prime Minister Christopher Luxon announced today that he has spoken to his Indian counterpart, Narendra Modi, about the conclusion of the negotiations, stressing that New Zealand’s exports to India are expected to increase by $1.1 billion to $1.3 billion (€940 million to €1.11 billion) annually over the next two decades as a result of the agreement.
“Boosting trade means more jobs for New Zealanders, higher wages and more opportunities for New Zealand workers,” he said.
A statement from Modi’s office also announced that the trade deal will serve as a catalyst for greater trade, investment, innovation and shared opportunities between the two countries.