India and New Zealand have officially concluded negotiations for a Free Trade Agreement (FTA). This landmark deal, finalized on December 22, 2025, is expected to significantly boost bilateral trade and investment between the two nations. The FTA aims to eliminate or reduce tariffs on a vast majority of goods traded between the two countries, paving the way for enhanced economic cooperation. The agreement is expected to be signed in the first half of 2026.

Key Highlights of the FTA:

• Tariff Elimination and Reduction: The FTA will eliminate or reduce tariffs on 95% of New Zealand's exports to India. Over 50% of exports will be duty-free from day one, increasing to over 80% over time. All of India's exports will receive zero-duty market access to New Zealand.
• Sectors to Benefit: New Zealand will see immediate tariff elimination on sheep meat, wool, coal, and over 95% of forestry and wood exports. Major tariff reductions will apply to seafood, fruit, wine, and manuka honey. India's labor-intensive sectors like textiles, apparel, leather, footwear, engineering goods, pharmaceuticals and farm products are expected to gain significantly.
• Services and Investment: New Zealand has offered India its best-ever market access and services offer, covering 118 service sectors. The FTA includes provisions for services, skilled work visas, and recognition of geographical indications. New Zealand has also committed to facilitating foreign direct investment of $20 billion into India over 15 years.
• Student and Professional Mobility: The deal will boost student mobility through post-study work visas and professional pathways in New Zealand, with no numerical caps, according to India's federal commerce ministry. New Zealand will provide temporary employment visas for Indian professionals in skilled occupations, with approximately 1667 three-year skilled work visas per year.
• Safeguards and Reviews: India has ensured the interests of its farmers by excluding certain sensitive agricultural products such as dairy, onions, sugar, spices, edible oils, and rubber from tariff concessions. The agreement includes a commitment to review the FTA one year after it enters into force, providing a mechanism for future improvements.

Economic Impact and Strategic Significance:

The India-New Zealand FTA is expected to significantly boost bilateral trade, with projections of doubling it to $5 billion in the next five years. New Zealand's exports to India are forecast to increase by $1.1 billion to $1.3 billion annually over the coming two decades as a result of the agreement. The agreement is a major step toward New Zealand's long-term goal of doubling the value of exports over 10 years.

For India, the FTA strengthens access to a high-income, rules-based Pacific market and supports its broader Indo-Pacific economic strategy. The deal also helps Indian exporters diversify shipments in the Oceania region, especially given trade barriers erected by the Trump administration.

Overall, the India-New Zealand FTA represents a significant step forward in strengthening economic ties between the two countries. It is expected to create new opportunities for businesses, students, and professionals in both nations, driving economic growth and fostering closer cooperation. The FTA reflects a shared commitment to deepen economic ties and a strong political will to create a mutually beneficial partnership.