India concludes FTA talks with New Zealand, cuts tariffs on 95% Kiwi goods

New Zealand and India on Monday concluded a free trade agreement (FTA) aimed at deepening economic ties and expanding market access for exporters. This comes after negotiations between the two countries resumed in March this year following a gap of nearly a decade.

This is India’s third trade pact that Modi & Co have sealed this year while talks with the US and European Union are still underway. Earlier, New Delhi has signed pacts with United Kingdom and Oman.

The pact with Kiwis is expected to make it easier for New Zealand companies to sell goods and services in India, home to the world’s largest population and an economy projected to reach ($7 trillion) by 2030. Trade between India and New Zealand has grown steadily in recent years. In FY21, India’s exports to New Zealand stood at $486.2 million, while imports were valued at $381.5 million. By FY26*, exports are projected to reach $343.5 million, while imports are expected to rise to $356.9 million, reflecting a narrowing trade gap and evolving trade mix.

Under the agreement, tariffs will be cut or reduced on about 95% of New Zealand’s exports to India. More than half of these products will become duty-free from the first day the pact comes into effect, the New Zealand Prime Minister Christopher Luxon said.

Confirming the deal, Luxon said he had spoken with Indian Prime Minister Narendra Modi following the conclusion of the agreement. “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,” he said in a post on X.

Luxon said the agreement would support jobs and incomes in New Zealand. “Boosting trade means more Kiwi jobs, higher wages and more opportunities for hard working New Zealanders,” he said, adding that the deal builds on the strong relationship between the two countries.

“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 said.

What New Zealand and India are eyeing

New Zealand is looking to expand its exports to India, particularly in dairy, fresh fruit, wool and wine, while also seeking clarity on market access and regulatory barriers.

India has emphasised the need for easier movement of skilled professionals, better access for its IT and services sector, stronger investment commitments and work opportunities similar to those extended to Australia under previous trade deals.

India’s major exports during the period included drug formulations and biologicals worth $34.0 million, petroleum products at $24.1 million, cotton fabrics and made-ups at $19.9 million, motor vehicles at $16.9 million, and readymade garments at $16.3 million.

New Zealand’s exports to India were led by fresh fruit at $57.4 million, followed by iron and steel at $45.4 million, wood and wood products at $37.7 million, coal and related products at $30.3 million, raw wool at $28.9 million, and dairy products at $5.4 million.