New Zealand and India Forge Landmark Free Trade Agreement

New Zealand has reached a significant free trade agreement with India, a partnership aimed at tapping into an economy projected to be worth $NZ12 trillion by 2030. The agreement will eliminate or reduce tariffs on 95% of New Zealand’s exports to India, with over half of the products becoming duty-free from the outset. This development is expected to enhance access for New Zealand businesses to India’s rapidly growing middle class.

In addition to trade benefits, New Zealand will provide approximately 1,667 temporary work visas annually in sectors facing shortages, such as healthcare, education, technology, and engineering. Furthermore, the country will also offer 1,000 places each year in its working holiday visa programme, aligning with Australia’s existing free trade pact with India.

Prime Minister Christopher Luxon emphasized the importance of this agreement, stating, “The gains are wide-ranging and significant. India is the world’s most populous country and is the fastest-growing big economy, and that creates opportunities for jobs for Kiwis, exports, and growth.”

Details of the Agreement and Expected Signing

The formal signing of the agreement is anticipated in the first half of 2026. Todd McClay, New Zealand’s Trade Minister, noted that the deal positions New Zealand on an equal or better footing compared to other countries trading with India. He forecasted that this pact will generate thousands of jobs and billions in additional exports.

The Indian government has confirmed the agreement but has yet to provide detailed comments. India’s trade minister is scheduled to address the media later this week.

This agreement fulfills a campaign promise made by New Zealand’s National Party during the 2022 elections, pledging to finalize a free trade agreement with India within its first term. Despite this progress, parliamentary approval remains uncertain. The coalition partner, New Zealand First, which holds eight of the 123 seats in parliament, has expressed opposition to the deal. Party leader Winston Peters criticized it for conceding too much, particularly regarding immigration, and not securing enough benefits for New Zealanders, especially in the dairy sector.

Current Trade Landscape

In 2024, two-way trade between New Zealand and India reached $NZ3.14 billion. The trade balance is heavily influenced by pharmaceuticals imported from India and a variety of agricultural exports from New Zealand, including wool, logs, and apples.

As New Zealand prepares to finalize this agreement, both nations are poised to strengthen their economic ties significantly, potentially transforming their trade dynamics for years to come.