India and New Zealand have long explored ways to improve their trade ties through dialogue and negotiations. The main goals have been to strengthen economic cooperation, investment flows, and market access. The involvement shows a shared desire to enhance bilateral economic ties gradually. Strong economic realities and interpersonal relationships influence India’s relationship with New Zealand. At present, India’s second-largest trading partner in Oceania is New Zealand. On December 22, 2025, India and New Zealand signed a historic Free Trade Agreement (FTA) to strengthen bilateral economic ties significantly.
The Free-Trade Agreement
In March 2025, India and New Zealand announced discussions for an FTA. The India-New Zealand FTA was finalised in December 2025 after multiple rounds of discussions, making it one of India’s fastest-concluded FTAs. As a gateway to the larger Oceania and Pacific Island markets, this FTA improves market access and tariff benefits for Indian exports to New Zealand.
Key Takeaways of the Agreement
100% of Indian exports are duty-free under the India-New Zealand Free Trade Agreement; a 15-year investment commitment of USD 20 billion, enhancing long-term strategic and economic collaboration; India defends its primary agricultural and dairy interests. Enormous victory for labour-intensive industries like leather and textiles; For the first time, New Zealand has signed the Annex on Health and Traditional Medicine Services; it also creates a new visa pathway for 5,000 skilled occupations and offers student mobility and post-study work visas for STEM graduates and skilled professionals; it has been decided to work together diligently in Ayush and Indian traditional knowledge. Duty-free or preferential access is secured under the India-New Zealand FTA in a number of sectors, including marine, agricultural and processed food, textile and apparel, and the engineering sector.
Conlcusion
An important turning point in India’s trade diplomacy is reflected in the India-New Zealand FTA, which creates new opportunities for extensive economic collaboration. The agreement delivered real and broad economic benefits by expanding market access for Indian commodities, increasing opportunities in services and mobility, and strengthening cooperation in investment and emerging sectors. It is anticipated that the deal will have wide-ranging effects, possibly boosting India’s economic participation across sectors such as agriculture, MSMEs, education, and skilled labour. Additionally, it supports India’s efforts to strengthen economic cooperation with New Zealand and its longer-term development goals.
