India, New Zealand conclude FTA talks; third trade pact this fiscal

India on Monday, December 22, announced the conclusion of a Free Trade Agreement (FTA) with New Zealand, its third in the current financial year, as New Delhi continues to diversify trade partnerships

after relations strained with its largest trading partner the US.

The deal will be officially signed in the next three months post legal scrubbing, according to Indian commerce ministry. 

With this, New Zealand aims to invest $20 billion in India to support manufacturing, infrastructure, services, innovation, and employment over the next 15 years as both countries look to double bilateral trade over the next five years.

Prime Minister Narendra Modi and New Zealand Prime Minister Christopher Luxon finalised the deal in a phone call, capping negotiations launched during Luxon’s India visit in March 2025.

Commerce and Industry Minister Piyush Goyal said elimination of tariffs on 100% of tariff lines for duty-free access for all Indian exports will enhance competitiveness of India’s labour-intensive exporters in textiles, apparel, leather, footwear, marine products, gems and jewellery, handicrafts, engineering goods and automobiles, and directly support Indian workers, artisans, women, youth and MSMEs and integrating them deeper into global value chains.

 

Indian enterprises are expected to benefit from their presence in New Zealand and access to the wider Pacific Island markets. The ministry said that exports of pharma and medical devices are expected to gain through faster regulatory access. New Zealand will enable acceptance of inspection reports from comparable regulators, including approvals by the US FDA, EMA, and UK MHRA, among others.

 

The move will reduce duplicative inspections, lower compliance costs, and expedite product approvals to facilitate growth of India’s pharmaceutical and medical devices exports to New Zealand.

 

Terming the development as a major economic and strategic milestone in India’s engagement with the Indo-Pacific region, the commerce ministry said that the trade pact has established a high-quality economic partnership to promote employment, skill mobility, trade and investment-led growth, innovation for agricultural productivity, and MSME participation to strengthen long-term economic resilience.

 

Skilled mobility: 5,000 temporary work visas

 

The agreement also creates a new Temporary Employment Entry Visa pathway for Indian professionals, allowing up to 5,000 skilled workers to be employed in New Zealand at any given time for a period of up to three years.

The pathway covers occupations such as AYUSH practitioners, yoga instructors, Indian chefs and music teachers, along with high-demand sectors including IT, engineering, healthcare, education and construction.

The commerce ministry remarked that the pact delivers New Zealand’s most ambitious services offer under any of its FTAs so far, with India securing market access commitments across IT and IT-enabled services, professional services, education, financial services, tourism, construction and other business services.

Commerce Secretary Rajesh Agrawal described the deal as a “new-generation trade agreement” centred on tariffs, investment, agricultural productivity and talent mobility.

While India stands to gain from expanded exports and services access, New Zealand will receive deeper and more predictable access to India’s large and growing market, along with commitments on the movement of students and skilled professionals.

The pact also includes commitments on Geographical Indications, with New Zealand agreeing to amend its laws to facilitate the registration of Indian wines, spirits and other goods — a benefit previously accorded to the EU.

In addition, both sides have agreed to cooperate in areas including AYUSH, culture, fisheries, audio-visual tourism, forestry, horticulture and traditional knowledge systems. The ministry said the agreement will also help address non-tariff barriers through enhanced regulatory cooperation, streamlined customs procedures and stronger sanitary and phytosanitary measures.