India & New Zealand announced on Monday, 22 December 2025, that they have reached a free trade agreement between them. The two countries intend to deepen their economic ties and bolster growth amid increasing global trade uncertainties.
This move comes in the wake of New Delhi accelerating efforts to diversify export destinations as part of a broader strategy to offset the impact of steep U.S. trade tariffs.
A formal signing of the agreement between India and New Zealand is expected to occur during the 1st quarter of next year, following the legal review of the negotiated text, according to India’s chief negotiator, Petal Dhillon, who spoke to reporters.
This new India-New Zealand trade agreement has been negotiated over the last 9 months. It aims to lower tariffs and ease regulatory barriers, besides expanding cooperation across goods, services and investments.
It underscores India’s push to lock into trade partnerships beyond traditional markets as global commerce faces strains from unpredictable tariffs and geopolitical tensions. It slows growth and raises protectionism.
As part of the agreement, India would benefit from zero-duty export access for all its goods to New Zealand. This is while Wellington would receive duty concessions and market access for about 70% of New Delhi’s tariff lines. The agreement covers 95% of exports in a phased manner, according to Indian officials.
India’s major sectors that will benefit from tax-free exports include textiles, apparel, engineering goods, leather & footwear, and marine products. New Zealand’s major gains will primarily be in horticulture, wood exports, coal, sheep wool, and meat, among other sectors.
New Zealand has committed investments worth USD 11.6 billion in India over a period of 15 years as part of the agreement, India’s Trade Ministry spokesperson shared.
New Delhi has excluded dairy imports such as milk, cream, whey, yoghurt, and cheese from the deal. The deal also excludes animal and vegetable products, such as onions and almonds, due to “domestic sensitivities.”
Bilateral trade between India and New Zealand remains modest compared with New Delhi’s bigger partners. Officials believed that the deal has strong growth potential. 2-way trade that includes merchandise goods and services stood at USD 1.392 billion last year in 2024. Indian Trade Secretary Rajesh Agarwal believed that the 2 sides intend to double the traded values in about 5 years.
Given the limited scale of bilateral trade, the agreement is less a trade breakthrough than a framework for deeper cooperation, as shared by trade analyst Ajay Srivastava.
New Zealand Prime Minister Christopher Luxon said in a post on X on Monday, December 22, that he spoke with his Indian counterpart Narendra Modi about the conclusion of bilateral talks. Luxon said that New Zealand’s exports to India are forecast to increase by USD 0.638 billion to USD 0.754 billion annually over the next two decades as a result of this agreement.
Boosting trade means more Kiwi jobs, higher wages, and greater opportunities for hard-working New Zealanders. Luxon added.
New Zealand’s Trade Minister, Todd McClay, said that this agreement gives the country access to markets that India has not provided to any other country.
New Zealand is the 1st country to secure access for apples and honey into India in an FTA. We have secured the best access for kiwifruit into India of any country in the world, McClay added.
Indian Trade Minister Piyush Goyal said that the agreement demonstrates India was rapidly expanding its trade relations with countries that complement the Indian economy rather than competing with it.
India is betting that a wider network of trade agreements will help India cushion external shocks and anchor its export ambitions.
