NEW DELHI: India and New Zealand have concluded negotiations on a free trade agreement, their prime ministers announced on Monday, marking New Delhi’s third such deal this year with a developed nation as it seeks to diversify its export market.
Negotiations on an FTA between India and New Zealand formally began in March 2025 during the visit of New Zealand Prime Minister Christopher Luxon to the South Asian nation. The two countries reached a deal after five formal discussion rounds over the course of nine months — New Delhi’s fastest with a developed country.
Under the pact, 100 percent of Indian goods will get duty-free access to the New Zealand market, while bilateral trade is expected to double in five years from the current $2.4 billion.
“This historic milestone reflects a strong political will and shared ambition to deepen economic ties between our two countries,” Indian Prime Minister Narendra Modi said on X.
“This FTA ensures: enhanced market access, deeper investment flows and numerous opportunities for innovators, entrepreneurs, farmers, MSMEs, students and youth.”
The tax-free exports will benefit labor-intensive sectors in India, including textiles, apparel, leather, footwear, marine products, gems and jewelry, and engineering goods, the Ministry of Commerce and Industry said in a statement.
New Zealand has also committed investments worth $20 billion in India over a period of 15 years as part of the agreement.
“The FTA reduces or removes tariffs on 95 percent of our exports to India,” Luxon wrote on X.
“India is one of the fastest-growing economies in the world, and this gives Kiwi businesses access to 1.4 billion Indian consumers.”
The New Zealand deal demonstrates how India is “expanding trade relations rapidly” with countries that complement the Indian economy rather than compete with it, Indian Trade Minister Piyush Goyal said during a press briefing in New Delhi.
India has accelerated discussions to finalize several trade agreements in recent months, with advanced talks ongoing with the EU and Chile, among others.
The move comes as Indian exporters face pressure from hefty US tariffs, which went into effect in August.
“The government is trying its best to finalize the FTA with different countries because the US … is giving big trouble to us,” Lalit Thukral, president of the Noida Apparel Export Cluster, told Arab News.
“Our garment industry is in very bad shape because of this tariff system … Everybody is losing money. They are running factories because they want to keep their labor.”
With the US being India’s biggest export market, the 50 percent tariffs on Indian goods have weighed on sectors such as textiles, auto components, metals and labor-intensive manufacturing.
The latest free trade deals will at least help “cover up our losses,” Thukral said.
Last week, India signed a comprehensive economic partnership agreement with Oman, which allows India to export most of its goods without paying tariffs, covering 98 percent of the total value of India’s exports to the Gulf nation.
Delhi also signed a multi-billion-dollar free trade pact with London earlier in July, which gives around 99 percent of Indian goods duty-free access to the UK market.
