India-New Zealand FTA: 5 Key Sectors To Benefit Amid Deepening Economic Ties

After having recorded a bilateral trade totalling $1.3 billion in 2024-25, New Zealand and India have inked a free trade agreement (FTA) to deepen economic ties in sectors like agriculture, and renewable energy.

The other sectors that stand to benefit after this nine-month-long trade talks concluded are food processing, pharmaceuticals, education, and services.

In his latest social media post, PM Modi said that the India-New Zealand FTA ensures "enhanced market access, deeper investment flows and numerous opportunities for innovators, entrepreneurs, farmers, MSMEs, students and youth."

On the other hand, New Zealand's PM Christopher Luxon said, "The FTA reduces or removes tariffs on 95% of our exports to India. It’s forecast that NZ exports to India could increase $1.1B to $1.3B per year over the coming two decades."

"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. India is one of the fastest-growing economies in the world, and this gives Kiwi businesses access to 1.4 billion Indian consumers, Luxon tweeted.

Meanwhile, trade diversification will aid Indian exporters to reduce dependency on particular nation and spread its exports across international operators.

5 Sectors To Benefit From IND-NZ FTA 

With the India-New Zealand FTA expected to benefit MSMEs, bolster exports, and enhance trade presence, let's look at key sector likely to benefit from the south Asian nation's third trade agreement in 2025.

Pharmaceutical sector: This vertical will witness a rise in imports directed towards New Zealand after zero-duty access across 90 tariff lines. Additionally, expedited regulatory pathways and acceptance of inspections by comparable regulators such as the US FDA, EMA (European Medicines Agency) and UK MHRA (Medicines and Healthcare products Regulatory Agency) will fast-track overseas trade.

Food processing: The good news for businesses operating in the food processing industry is tariffs upto 5% on processed foods, cereals, coffee, spices, fruits, and vegetables have been eliminated.

Leather sector: The leather and footwear sector, covered under 181 tariff lines, will also benefit from full tariff elimination. India's leather exports stood at USD 5.5 billion in 2024-25, with New Zealand importing over USD 0.5 billion worth of leather products per annum globally.

Textile sector: India's textile and apparel exports rose to USD 36.9 billion in 2024-25, while exports to New Zealand increased to USD 103 million, a trend expected to accelerate given New Zealand's annual global textile imports of nearly USD 1.9 billion. India-based exporters of textiles and clothing will receive zero-duty access across 1,057 tariff lines.

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

Services sector: The services export witnesses a surge to USD 634 million in 2024, driven by travel and business services, and IT.

This FTA strengthens mobility and talent pathways, with provisions for post-study work visas of up to three years for STEM graduates, four years for doctoral scholars, a 5,000-strong temporary employment visa quota for skilled professionals, and 1,000 working holiday visas annually.