NEW DELHI: India and New Zealand signed on Monday a free trade agreement that will remove tariffs on India’s exports, attract to the country $20 billion in foreign direct investment, and facilitate the migration of thousands of Indian professionals.
Negotiations for the deal started in March last year and was finalized in December. It was signed in New Delhi by India’s Commerce Minister Piyush Goyal and New Zealand’s Investment Minister Todd McClay during a gathering of business leaders from both countries.
Under the pact, all Indian goods will get duty-free access to the New Zealand market, while India will eliminate or reduce tariffs on 95 percent of New Zealand’s exports.
The deal also opens employment pathways for Indian professionals, with a quota of 5,000 visas at any given time and a stay of up to three years.
“It also has an investment commitment which will encourage businesses to leverage the strengths and scale that India offers. It will also encourage Indian businesses to look at the New Zealand market both for access in goods and services, and potential investment,” Goyal said during the signing ceremony.
The $20 billion New Zealand investment in India — negotiated as a part of the FTA — is intended to support manufacturing, infrastructure, services, innovation, and job creation. Goyal and McClay did not specify a timeline, but the Ministry of Commerce has previously said it would be over 15 years.
McClay said he hopes the trade agreement will be implemented by the end of 2026. It has yet to be approved by New Zealand’s parliament, where it faced criticism from the ruling coalition’s partner.
New Zealand Prime Minister Christopher Luxon said in an X post ahead of the signing that the deal is a “once-in-a-generation agreement that gives NZ exporters unprecedented access to 1.4 billion people and an economy set to become the third-largest in the world.”
While New Zealand First, a far-right populist party, has vowed to vote against the deal, saying it “gives too much away, especially on immigration, and does not get enough in return for New Zealanders,” the opposition Labour party said last week it would support the FTA, paving the way for it to clear parliament.
The pact is India’s third FTA since last year, when it accelerated its market diversification to weather the 50 percent US tariffs slapped on its exports by Donald Trump’s administration.
“This was one of the fastest concluded FTAs in Indian trade history. It is important to have fast-paced negotiations at a time when the cost of slow negotiations is rising, in an environment where tariff regimes can shift on a single political announcement,” Anisree Suresh, researcher at the Takshashila Institution, told Arab News.
“Although this is a small FTA, it can serve as a symbolic framework for India to expand its export market options and engage in fast-paced trade deals at a time when the rules-based trading system is eroding.”
In 2025, India signed another two major free trade deals — a Comprehensive Economic and Trade Agreement with the UK and the Comprehensive Economic Partnership Agreement with Oman, which are expected to enter into force in the first half of 2026.
India also announced it was finalizing an FTA with the EU in January, which is one of the nation’s most significant given the European bloc’s size, but it has not yet been signed.
