New Delhi, India – March 17: Prime Minister Narendra Modi and New Zealand Prime Minister Christopher Luxon witness the exchange of MOUs at a joint press conference at Hyderabad House in New Delhi on March 17, 2025.
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India and New Zealand on Monday announced a free trade agreement that will make most trade in goods between the two countries duty-free.
The trade agreement will be reviewed in a year’s time and is expected to be signed in the first half of next year.
“This historic agreement will eliminate or reduce tariffs on 95% of New Zealand’s exports,” New Zealand Trade and Investment Minister Todd McCrae said in a statement, adding that nearly 57% of New Zealand’s exports would be duty-free “from day one”.
The Pacific island nation plans to invest $20 billion in India over the next 15 years and allow the movement of professionals, skilled workers and students from India to New Zealand, an Indian statement said.
India has also secured a ‘zero duty market’ for all exports to New Zealand, including textiles, apparel, leather, footwear, seafood, gems and jewellery, handicrafts, engineering products and automobiles.
Piyush Goyal, India’s Commerce Minister, said: “Today, this free trade agreement aims to build trade and create opportunity with people at the heart.”
The agreement will give Indian businesses and young people the opportunity to “learn, work and grow on the world stage”, he added.
India will eliminate tariffs on almost all exports of sheep meat, wool, coal, forestry and timber. New Delhi will also allow duty-free access to dairy products and other food ingredients for re-export.
However, New Delhi said dairy products, coffee, milk, cream, cheese, yogurt, whey, casein, onions, sugar, spices, edible oil and rubber will be excluded from market access to ensure protection of farmers and domestic industries.
The India-New Zealand trade deal “brings policy certainty, lowers manufacturing input costs and creates a vision for long-term economic resilience,” said Ranjit Mehta, chief executive and executive director of Indian industry body PHDCCI.
Bilateral goods trade between the two countries will reach $1.3 billion from 2024 to 2025, and the total trade in goods and services in 2024 will be $2.4 billion. “The FTA provides a stable and predictable framework to realize the full potential of this relationship,” India’s Ministry of Commerce said.
The FTA is India’s third such agreement this year, following the free trade agreement with the UK in July and the agreement with Oman earlier this month.
The deal comes as the United States, New Delhi’s largest trading partner, has imposed a 50% tariff on exports of goods, including a 25% tariff on India’s purchases of Russian crude oil.
India, with ambitions to become an exporting powerhouse, is looking to diversify its exports to offset the impact of US tariffs.
After steep tariffs went into effect in August, India’s exports to the US fell by nearly 12% in September and 8.5% in October, but rose sharply to 22.6% in November.
