India–New Zealand Free Trade Agreement Aims to Boost Exports, Promote Skilled Workforce Mobility

New Delhi, Dec 22: India and New Zealand on Monday signed a landmark Free Trade Agreement (FTA), marking a major step in strengthening bilateral economic engagement in the Indo-Pacific region. The Indian government described the pact as comprehensive, balanced and forward looking, aimed at boosting trade, investment, employment and skill mobility.

Prime Minister Narendra Modi spoke with his New Zealand counterpart Christopher Luxon following the successful conclusion of the agreement, according to an official statement. Prime Minister Luxon said the FTA will reduce or eliminate tariffs on 95 per cent of New Zealand’s exports to India, significantly expanding market access.

“It’s forecast that New Zealand exports to India could increase by USD 1.1 billion to USD 1.3 billion annually over the next two decades. This will create jobs, raise wages and open new opportunities for New Zealanders,” Luxon said, adding that the deal builds on the strong friendship between the two nations.

Fastest FTA Negotiated by India

The India–New Zealand FTA is among the fastest trade agreements concluded by India, with negotiations beginning only in March this year. The first formal talks were held on March 16 between Commerce and Industry Minister Piyush Goyal and New Zealand’s Minister for Trade and Investment Todd McClay.

According to the government, the agreement establishes a high-quality economic partnership focused on employment generation, skill mobility, trade and investment-led growth, agricultural innovation and enhanced participation of MSMEs.

Duty-Free Access for Indian Exports

Under the agreement, New Zealand will eliminate tariffs on 100 per cent of its tariff lines, providing duty-free access for all Indian exports. Key beneficiary sectors include textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods and automobiles.

The services sector will also gain expanded access, covering IT and IT-enabled services, professional services, education, financial services, tourism, construction and other business services.

Major Gains for Services and Skilled Professionals

The government said New Zealand has extended its most ambitious services offer to India under this FTA, surpassing commitments made in its earlier trade agreements. The pact will facilitate improved entry and stay provisions for Indian professionals, students and youth, including work opportunities during studies, post-study work options and dedicated visa arrangements.

Both countries have agreed to introduce a Skilled Employment Pathway through a new Temporary Employment Entry Visa, allowing up to 5,000 Indian professionals at a time to work in New Zealand for up to three years. Eligible categories include IT, engineering, healthcare, education, construction, as well as AYUSH practitioners, yoga instructors, Indian chefs and music teachers.

Investment and Strategic Impact

New Zealand has also committed to facilitating investments worth USD 20 billion in India over the next 15 years across manufacturing, infrastructure, services and innovation, aligned with India’s Make in India initiative.

Commerce Minister Piyush Goyal said the FTA is centred on people-driven growth. “It opens opportunities for our farmers, entrepreneurs, students, women and innovators, boosts agricultural productivity and gives India’s youth pathways to learn, work and grow globally,” he said.

India–New Zealand trade in goods and services stood at around USD 2.4 billion in 2024, with services accounting for USD 1.24 billion. The New Zealand pact is India’s third bilateral FTA concluded this year and the seventh in recent years, following agreements with Oman, the UK, EFTA countries, the UAE, Australia and Mauritius.