India-New Zealand Announce Free Trade Agreement; PM Modi Holds Telephonic Conversation With Counterpart

India and New Zealand have finalised a free trade agreement, New Zealand said on Monday, making it easier for its exporters to reach the world's biggest population and an economy forecast to be worth NZ$12 trillion ($7 trillion) by 2030.

The agreement cuts or reduces tariffs on 95% of New Zealand's exports to India with more than half of products to be duty free on day one of the pact, improving access to India's rapidly expanding middle class, the New Zealand government said.

PM Modi Holds Telephonic Conversation With New Zealand PM

Prime Minister Narendra Modi on Monday held a telephone conversation with the Prime Minister of New Zealand, The Rt. Hon. Christopher Luxon today. The two leaders jointly announced the successful conclusion of the historic, ambitious and mutually beneficial India–New Zealand Free Trade Agreement (FTA).

With negotiations having been Initiated during PM Luxon’s visit to India in March 2025, the two leaders agreed that the conclusion of the FTA in a record time of 9 months reflects the shared ambition and political will to further deepen ties between the two countries. The FTA would significantly deepen bilateral economic engagement, enhance market access, promote investment flows, strengthen strategic cooperation between the two countries, and also open up new opportunities for innovators, entrepreneurs, farmers, MSMEs, students and youth of both countries across various sectors.

With the strong and credible foundation provided by the FTA, both leaders expressed confidence in doubling bilateral trade over the next five years as well as an investment of USD 20 billion in India from New Zealand over the next 15 years. The leaders also welcomed the progress achieved in other areas of bilateral cooperation such as sports, education, and people-to-people ties, and reaffirmed their commitment towards further strengthening of the India-New Zealand partnership.

Both the leaders agreed to remain in touch.

Key Highlights of the India-New Zealand FTA

Here are the five main highlights from the FTA between India and New Zealand:

1. Investment Commitment: New Zealand has agreed to channel USD 20 billion into India over the next 15 years. The money will go toward manufacturing, infrastructure, services, and new ideas. Similar to India's deal with European countries, this includes a safety clause, if the investment falls short, some trade benefits can be paused.
2. Market Access and Tariff Cuts: New Zealand will remove duties on all Indian goods over time, giving a strong push to Indian exports like clothes, leather items, and engineering products. India will gradually cut its average tariff from about 16% to 9% in ten years but has kept full protection for sensitive farm products such as dairy, sugar and spices to support local farmers.
3. Student & Professional Mobility: Indian students completing STEM degrees can stay and work in New Zealand for up to three years, while PhD graduates get up to four years with no caps on numbers. A fresh visa route opens for up to 5,000 skilled Indians, including IT specialists, engineers, and AYUSH experts. Plus, 1,000 young Indians can join a yearly working holiday scheme.
4. Focus on Services and Traditional Medicine: New Zealand has granted access in 118 service areas for Indian firms. For the first time ever in any of its trade deals, it added a special section on health and traditional medicine, making it simpler for Indian Ayurveda, yoga and other traditional practitioners to work there.
5.  Support for Smaller Businesses (MSMEs): Special rules in the agreement focus on Micro, Small and Medium Enterprises (MSMEs). These include better sharing of trade information and stronger direct links between businesses, helping smaller Indian companies enter the New Zealand market more easily.

Commerce and Industry Minister Piyush Goyal, described the FTA as one that "puts people first". He stated, "Today this Free Trade Agreement is about building trade around people and launching opportunities, for our farmers, for our entrepreneurs, for our students, for our Women and for our innovators."

Also Read: India-New Zealand Trade Deal: 5 Key Takeaways From The Historic FTA