India and New Zealand Edge Closer to Free Trade Deal After 10 Years

India and New Zealand are nearing the final stages of a Free Trade Agreement (FTA) after resuming negotiations earlier this year, following a 10-year pause. The deal reflects renewed interest from both sides in strengthening economic ties, boosting trade flows, and supporting investment.

Historically, trade negotiations between the two nations were paused for a decade due to shifting priorities and economic challenges. Talks restarted in March 2025, signaling a fresh commitment to enhancing bilateral economic engagement. The FTA aims to facilitate smoother trade in goods and services while creating opportunities for investors and businesses on both sides.

Trade Patterns and Figures show that while India and New Zealand maintain steady trade, the volumes are moderate compared to India’s trade with other partners. In FY21, India exported goods worth $486.2 million to New Zealand, while imports from New Zealand stood at $381.5 million. Projections for FY26 suggest a slight dip in exports to $343.5 million and imports at $356.9 million, highlighting volatility and the need for easier market access, a key goal of the proposed FTA.

Both countries have specific priorities for the agreement. New Zealand wants improved access for its exports to India, particularly dairy products, fresh fruit, wool, and wine. The country is seeking reductions in tariff and non-tariff barriers and simpler supply chain arrangements to boost its exports.

India, on the other hand, is focused on better market access for its IT and services sector, enhanced opportunities for skilled professionals, and investment commitments aligned with FTA provisions. India is also aiming for labour and mobility arrangements similar to its existing agreements with Australia, reflecting its strengths in services and global workforce integration.

Looking at top traded products from April to October FY26, India’s main exports to New Zealand include drug formulations and biologicals ($34.0m), petroleum products ($24.1m), cotton fabrics ($19.9m), motor vehicles ($16.9m), and readymade garments ($16.3m). New Zealand’s main exports to India are fresh fruit ($57.4m), iron & steel ($45.4m), wood products ($37.7m), coal & coke ($30.3m), raw wool ($28.9m), and dairy products ($5.4m). These numbers show the potential for growth in specific sectors, especially agriculture, horticulture, and services.

One of the major negotiation challenges is the difference in tariff levels. On average, New Zealand’s tariffs are low at around 2.3%, while India’s tariffs average 17.8%. To reach a balanced agreement, India may need to consider further reductions, particularly for New Zealand’s agricultural exports.

If finalized, the FTA could bring several benefits. For India, it would enhance services sector growth, expand opportunities for skilled professionals, and strengthen ties with a developed Asia-Pacific economy. For New Zealand, the agreement would open access to one of the fastest-growing large markets, supporting growth in exports like dairy, fruit, wool, and wine. Bilateral trade overall could grow beyond current levels, fostering deeper business and investment linkages.

In summary, the India–New Zealand FTA negotiations are on track for completion after a long hiatus. By reducing trade barriers, facilitating services and labour mobility, and promoting investment, the deal promises to strengthen economic cooperation and provide growth opportunities for both nations. Key areas like tariff reductions and market access remain under discussion, but both sides are showing renewed commitment to finalizing the agreement.