India and New Zealand have announced the conclusion of a bilateral Free Trade Agreement (FTA), marking India’s third major trade pact in 2025 after agreements with the United Kingdom and Oman, according to people familiar with the development.
Prime Minister Narendra Modi on Monday spoke with New Zealand Prime Minister Christopher Luxon to reaffirm the shared commitment to strengthening economic ties. The agreement is expected to be formally announced later this week, following the finalisation of a draft text.
Officials said the FTA is designed to be comprehensive, balanced, and mutually beneficial, while respecting the sensitivities of both countries. India will continue to safeguard the interests of its subsistence farmers and dairy sector, while offering limited concessions on non-competing products such as kiwi fruit and timber.
Negotiators from both sides achieved convergence on most outstanding issues after extensive physical and virtual discussions. The fourth formal round of negotiations took place in Rotorua, New Zealand, in November during Union Commerce and Industry Minister Piyush Goyal’s visit. Subsequently, New Zealand’s Minister for Trade and Investment, Todd McClay, met Minister Goyal in New Delhi on December 12 to advance the talks.
The proposed FTA is expected to enhance India’s access to the New Zealand market for goods such as organic products and pharmaceuticals, as well as professional services. A key component of the agreement may include Mutual Recognition Agreements (MRAs), which enable both countries to recognise each other’s professional qualifications and quality standards.
Officials noted that the agreement will support India’s broader strategy of trade diversification by reducing reliance on any single geographic market. While specific tariff schedules and sectoral commitments have not yet been disclosed, the FTA is expected to lower trade barriers and create a more predictable and business-friendly environment for investors.
India’s bilateral merchandise trade with New Zealand reached USD 1.3 billion in 2024–25, recording nearly 49 percent year-on-year growth, according to a Commerce Ministry statement issued in November. The FTA is expected to unlock further opportunities in agriculture, food processing, renewable energy, pharmaceuticals, education, and services.
FTA negotiations were formally launched on March 16, 2025, and concluded after four rounds of talks. The discussions gained momentum following Prime Minister Luxon’s five-day visit to India in March, during which both leaders welcomed the launch of negotiations for a balanced and ambitious trade agreement. The two countries also agreed to explore cooperation in emerging areas such as digital payments.
