India and New Zealand have signed a landmark Free Trade Agreement (FTA) with a strong focus on agriculture, aiming to boost farm productivity, expand agri-exports and integrate farmers into global value chains while safeguarding sensitive domestic sectors.
The agreement is expected to transform bilateral trade relations by combining market access with agricultural cooperation and technological support for farmers. A key pillar of the pact is the Agricultural Productivity Partnership, which seeks to enhance farm output, improve quality standards and strengthen supply chains through collaboration between the two countries.
Under this partnership, Indian farmers are expected to benefit from improved agricultural practices, better access to global markets and integration into international value chains. The agreement emphasises capacity building, innovation and knowledge exchange, particularly in high-value agriculture and food processing sectors.
At the same time, India has taken a cautious approach to protect its domestic agriculture. The FTA explicitly safeguards sensitive sectors such as dairy and key farm commodities, ensuring that small farmers and rural livelihoods are not adversely impacted by increased imports.
Duty-free access and export boost
A major highlight of the agreement is that it eliminates duties on 100% of Indian exports to New Zealand, providing a significant boost to sectors including agriculture, processed foods and labour-intensive industries.
This is expected to enhance export opportunities for Indian agri-products such as fruits, vegetables, spices and processed food items, enabling farmers and agri-based industries to tap into premium markets in New Zealand and beyond.
The agreement also gives India a gateway to the wider Oceania and Pacific Island markets, expanding the reach of Indian agricultural exports and strengthening supply chain linkages.
Investment and rural economy impact
The FTA includes a commitment of USD 20 billion in investment from New Zealand into India over the next 15 years, which is expected to support infrastructure development, agri-processing and rural value chains.
This investment push is likely to create new opportunities for farmers, agri-entrepreneurs and MSMEs, while generating employment in rural areas. It will also encourage the adoption of advanced technologies in agriculture, improving productivity and sustainability.
The agreement opens up opportunities across sectors including agriculture, food processing, renewable energy, pharmaceuticals and services, thereby creating a broad-based growth framework.
Strengthening bilateral trade
India-New Zealand trade ties have already shown strong growth. Merchandise trade between the two countries increased from USD 873 million in 2023-24 to USD 1.3 billion in 2024-25, registering a growth of around 49%.
India’s merchandise exports to New Zealand rose to USD 711 million in 2024-25, reflecting a growth of 32%, while services exports grew by 13% in 2024 to reach USD 634 million, led by sectors such as travel, IT and business services. The FTA is expected to further accelerate this momentum by reducing trade barriers, improving market access and enhancing economic cooperation.
Services, mobility and broader cooperation
Beyond agriculture and goods trade, the agreement significantly expands opportunities in services, including IT, healthcare, education, engineering and construction. It also facilitates mobility of skilled professionals, opening pathways for Indian talent in New Zealand.
The FTA creates a transparent and predictable framework that promotes trade in services, encourages long-term investment and strengthens people-to-people ties between the two countries. Additionally, cooperation in emerging areas such as AYUSH, including yoga instructors, Indian chefs and cultural services, is expected to gain momentum under the agreement.
Strategic Indo-Pacific significance
The India-New Zealand FTA is also strategically important in the context of the Indo-Pacific region. It strengthens India’s engagement with smaller but high-value markets and supports diversification of trade partnerships amid global uncertainties.
New Zealand, on the other hand, gains improved access to one of the world’s fastest-growing major economies and a large consumer base, particularly for agricultural and high-value food products. The agreement reflects a broader vision of deepening economic ties, enhancing supply chain resilience and promoting sustainable growth across sectors.
Balanced approach to liberalisation
Despite its ambitious scope, the FTA adopts a balanced approach by combining liberalisation with protection. While it opens markets and promotes exports, it ensures that critical domestic sectors, especially agriculture, remain protected through safeguards and exclusions. This calibrated strategy is designed to maximise benefits for farmers, businesses and consumers, while maintaining economic stability and food security.
Terming it a significant milestone in strengthening India’s global trade engagement and expanding its export footprint, FIEO President, S C Ralhan said that the FTA will open new avenues for Indian exporters by enhancing market access to New Zealand across key sectors such as agriculture, textiles, pharmaceuticals, engineering goods, and services such as IT & ITES, Business Services, Engineering, Education, Construction and Health Services. With reduced tariff barriers and streamlined trade procedures, Indian businesses will gain with improved competitiveness in the New Zealand market, added Mr Ralhan.
FIEO Chief emphasized that sectors such as processed food, dairy alternatives, organic products could witness significant growth under the FTA framework. MRA for Organic Certification will facilitate the market access. AYUSH products for the first time will get the market access. Additionally, the services sector is likely to benefit from enhanced mobility provisions and mutual recognition of professional qualifications.
Highlighting the way forward, Mr Ralhan noted that to fully realize the benefits of the FTA, it is essential for exporters to stay informed about the rules of origin, compliance requirements, and regulatory frameworks. Capacity-building initiatives, market intelligence, and government support will play a crucial role in ensuring that Indian exporters can effectively capitalize on the opportunities presented.