India and New Zealand Sign Free Trade Agreement
New Delhi — India and New Zealand signed a free trade agreement on Monday to strengthen economic relations and enhance market access amid growing global trade challenges.
This deal allows India to explore new export markets, especially as it faces high tariffs from the United States and disruptions in shipping routes due to global tensions. For New Zealand, this agreement is a key step in reducing its dependence on China, its largest trade partner.
The agreement was formalized in New Delhi by India’s Commerce and Industry Minister Piyush Goyal and the visiting New Zealand Trade and Investment Minister Todd McClay. After nine months of negotiations, the deal will remove tariffs on 95% of New Zealand’s exports to India and make all Indian exports to New Zealand duty-free. Additionally, New Zealand has pledged to invest $20 billion in India over the next 15 years.
McClay referred to the agreement as a “once-in-a-generation” chance to strengthen economic ties, especially during a time of rising global trade tensions. India currently ranks as New Zealand’s 12th-largest export market, with bilateral trade reaching $2.15 billion through June 2025.
“This deal is concluded at a time of significant global uncertainty, making strong partnerships more crucial than ever,” McClay noted.
Goyal described the agreement as a “defining milestone” and emphasized the choice both nations made to partner closely during a time when the world economy is changing. The deal will open up markets across various sectors, fostering investment and regulatory collaboration.
Indian sectors likely to benefit from this agreement include textiles, engineering goods, leather, and marine products. Conversely, New Zealand expects to boost exports in horticulture, timber, coal, wool, and meat. However, India has excluded dairy and certain agricultural products from the agreement to safeguard its agricultural sector.
Indian exporters have been facing challenges due to increased U.S. tariffs since last August, especially in sectors like textiles and auto parts. Meanwhile, India is continuing its discussions with the U.S. for a separate agreement.
New Zealand usually sees bipartisan support for its trade agreements. The current deal now requires parliament’s ratification, which is anticipated to pass following support from the opposition Labour Party, despite some reservations from the New Zealand First party.
This agreement marks a significant step for both nations within a complex global trade landscape.
