India and New Zealand on Monday finalized a major free-trade agreement that aims to eliminate or reduce tariffs on about 95% of New Zealand’s exports to India and provide India with tariff-free access to New Zealand markets.
New Zealand has also pledged to invest an additional $20 billion (€17 billion) in India over the next 15 years.
New Zealand Prime Minister Christopher Luxon said, “India is the world’s most populous country and fastest-growing major economy, and it creates jobs, exports and growth opportunities for Kiwis.”
He described the benefits of the scheme as “widespread and significant”.
In 2024, trade between the two was expected to total $1.8 billion – including pharmaceuticals from India and the bulk of forestry and agricultural products from New Zealand.
The deal was concluded in just nine months, with Indian Prime Minister Narendra Modi hailing it as a “historic milestone” in a social media post.
For New Zealand exporters, the deal will facilitate trade in timber, coal, sheep wool and other commodities, while Indian businesses will see benefits for clothing, footwear and leather as well as engineering goods and marine products.
However, India will maintain entry barriers on many New Zealand dairy and agricultural products in an effort to protect India’s domestic producers. These would include milk, cream, whey, curd and cheese, but also goat meat, onions and almonds.
Will the New Zealand government get the votes to approve the deal?
Wellington’s Trade Minister Todd McLay said the deal gives New Zealand more access to India’s markets than any other country:
“New Zealand is the first country to secure any access for apples and honey to India in an FTA. We have secured the best access for kiwi fruit in India than any other country in the world.”
India’s trade minister said the agreement reflects India’s “rapidly growing” trade relations with countries that complement its economy rather than compete with it.
The deal is the third major trade pact New Delhi has signed this year as it faces 50% US tariffs on its exports. Earlier deals were made with Oman and UK. New Delhi is expected to sign trade deals with the European Union, Chile and Canada soon.
New Zealand says it expects both sides to sign the agreement in the first half of 2026. However, this could prove difficult for the government in Wellington as it seeks support from its coalition partners in New Zealand First, a far-right populist party.
NZ First leader Winston Peters vowed that his party’s eight representatives would vote against the deal in the 123-seat parliament, saying, “It leaves too many concessions, particularly on immigration, and New Zealanders don’t get enough in return, including dairy.”
Edited by: Darko Janjevic