India and New Zealand Finalize Free Trade Agreement to Boost Trade

India and New Zealand have finalized a Free Trade Agreement, or FTA, that will provide zero-duty access for Indian exports to New Zealand across all tariff lines. This landmark deal aims to significantly boost cooperation in services, mobility, goods, investment, and trade facilitation, with the goal of doubling bilateral trade over the next five years.

The agreement is expected to benefit various sectors including agriculture, textiles, engineering, and pharmaceuticals, while also enhancing opportunities for MSMEs, workers, artisans, and women-led enterprises.

New Zealand has committed to investing $20 billion in India over a 15-year period, targeting manufacturing, infrastructure, services, and innovation. Indian farmers will gain improved access to New Zealand markets for products like fruits, vegetables, and processed foods, supported by initiatives to enhance agricultural productivity.

The FTA notably includes provisions for services and mobility, with New Zealand offering market access in 118 service sectors and extending Most Favoured Nation treatment in 139 sectors. India reciprocates by granting market access in 106 service sectors.

For the first time, an Annex on Student Mobility and Post Study Work Visas has been included, allowing Indian students to work 20 hours per week while studying and offering post-study work visas for up to three years for certain graduates.

The agreement also establishes a new pathway for Temporary Employment Entry Visas for 5,000 Indian professionals in skilled occupations. Trade between India and New Zealand stood at $1.3 billion in merchandise for the fiscal year 2024-25, with total trade in goods and services around $2.4 billion.

This FTA is expected to enhance economic engagement and strategic cooperation between the two countries, creating opportunities for innovators, entrepreneurs, and the youth. Prime Ministers Narendra Modi and Christopher Luxon emphasized the significance of this FTA during a recent conversation, highlighting its potential to enhance trade and investment opportunities.

Luxon noted that the FTA could increase New Zealand's exports to India by $1.1 billion to $1.3 billion annually over the next two decades.