India and New Zealand on Monday announced the conclusion of free trade agreement negotiations, a move aimed at boosting bilateral trade in goods and investments.

IMAGE: Prime Minister Narendra Modi with Christopher Luxon, prime minister of New Zealand. Photograph: Adnan Abidi/Reuters

The talks started in May this year.

New Zealand Prime Minister Christopher Luxon said on Monday that negotiations for a free trade agreement with India have been concluded. The free trade agreement (FTA) reduces or removes tariffs on 95 per cent of our exports to India.

It’s forecast that New Zealand exports to India could increase from $1.1 billion to $1.3 billion per year over the coming two decades, Luxon said in a social media post.

“I’ve just spoken with India’s Prime Minister Narendra Modi following the conclusion of the NZ-India Free Trade Agreement.

“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.

In FY25, the bilateral trade was about $1.3 billion (India’s exports were $711.1 million and imports were $587.1 million).

New Zealand’s average import tariff is just 2.3 per cent, compared with India’s 17.8 per cent, and 58.3 per cent of New Zealand’s tariff lines are already duty-free.

India’s export basket to New Zealand is broad-based but concentrated in fuels, textiles, and pharmaceuticals.

Aviation turbine fuel (ATF) led shipments at $110.8 million, followed by clothing, fabrics, and home textiles at $95.8 million.

Medicines accounted for $57.5 million, while machinery, including turbojets, contributed $51.8 million.

Petroleum products were another major component, with diesel exports totalling $47.8 million and petrol exports totalling $22.7 million.

Other notable exports included automobiles and parts ($19.3 million), paper and paperboard ($18.3 million), electronics ($16.5 million), iron and steel ($14.1 million), shrimps ($13.7 million), basmati rice ($11.9 million) and gold jewellery ($9.9 million).

New Zealand’s exports to India, by contrast, are dominated by raw materials and agricultural inputs.

Wood and wood articles ($78.4 million) and wood pulp ($39.8 million) underline linkages in paper, packaging and construction.

Steel scrap exports reached $71.2 million, while aluminium scrap totaled $42.9 million, reflecting India’s dependence on recycled metal inputs.

In energy and heavy industry, coking coal exports totalled $48.8 million, alongside high-value turbojets valued at $66.2 million.

Agricultural and animal-based products also play a significant role, led by shorn wool ($47.3 million), milk albumin ($32.1 million), apples ($32.8 million) and kiwi fruit ($17 million).

Services trade is a more significant pillar of the relationship.

In FY24, India’s services exports to New Zealand stood at $214.1 million, while New Zealand’s services exports to India totaled $456.5 million.

India’s strengths lie in IT and software services, telecommunications support, healthcare and financial services.

New Zealand’s services exports are led by education — driven by Indian students — followed by tourism, fintech solutions, and specialised aviation training, he added.

Highlights of India-New Zealand free trade agreement

The pact is likely to be signed in three months and it is expected to be implemented next year.

• Zero Duty market access on 100 per cent of India’s exports. India has offered tariff liberalisation in 70 per cent lines covering 95 per cent of New Zealand India Bilateral trade.

• This market access enhances the competitiveness of India’s labour-intensive sectors including textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods and automobiles.

• Launched on March 16th 2025, the fastest with a Developed Country FTA concludes the year on a high note for all Indian exports including textiles, pharmaceuticals, leather, engineering goods, agricultural products

• Dedicated quota of Temporary Employment Entry visa for 5,000 professionals and 1,000 Work and Holiday Visas.

• New Zealand has committed to facilitate investments of $20 billion into India over the next fifteen years.

• Establishment of Agricultural Productivity Partnerships through Centres of Excellence  by New Zealand for Apples, Kiwifruit, and Honey to boost productivity.

• Duty free inputs for India’s Manufacturing Sector: Wooden logs, coking coal, waste and scraps of metals.

• Cooperation has been agreed in AYUSH, culture, fisheries, audio visual tourism, forestry, horticulture and traditional knowledge systems.

• Apart from tariff liberalisation, the FTA includes provisions to address non-tariff barriers through enhanced regulatory cooperation.

• Bilateral merchandise trade reached $1.3 billion in 2024–25, while total trade in goods and services stood at approximately $2.4 billion in 2024, with services trade alone reaching $1.24 billion.