India and New Zealand Conclude Free Trade Agreement, Exclude Dairy Products

India and New Zealand have concluded talks on a Free Trade Agreement (FTA) aimed at significantly boosting economic ties and potentially doubling bilateral trade over the next five years.

Prime Minister Narendra Modi held a telephone conversation with the Prime Minister of New Zealand Christopher Luxon today. The two leaders jointly announced the successful conclusion of the historic, ambitious and mutually beneficial India–New Zealand Free Trade Agreement (FTA).

The agreement will eliminate or reduce tariffs on about 95 per cent of New Zealand’s exports to India, with more than half of those products becoming duty-free immediately. In turn, all Indian goods would have duty free-access to New Zealand. New Zealand has also pledged to invest $20 billion in India over the next 15 years under the pact. 

Prime Minister Narendra Modi described the deal as a milestone in strengthening economic cooperation between the two democracies. “This historic milestone reflects strong political will and shared ambition to deepen economic ties,” Modi said. New Zealand Prime Minister Christopher Luxon said India’s large and fast-growing market offers substantial opportunities for New Zealand exporters. 

However, sensitive agricultural products, most notably dairy items including milk, cream, cheese, yoghurt and whey, have been excluded from tariff concessions to protect India’s domestic industries and farmers. Other products such as onions, spices and edible oils were also kept out of the liberalisation schedule. 

The deal fulfils an election promise by New Zealand’s governing National Party and will now require approval by the New Zealand Parliament. That process could face hurdles as the NZ First party, a coalition partner, has expressed reservations about aspects of the agreement, including its benefits for the dairy sector. 

Negotiations for the FTA come as part of India’s broader strategy to diversify trade partnerships amid global economic uncertainties and rising tariffs from major markets like the United States. This is India’s third trade deal this year, following agreements with the United Kingdom and Oman.