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POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

11. India–New Zealand Free Trade Agreement (FTA)

India and New Zealand signed a landmark Free Trade Agreement (FTA) in April 2026, marking a significant
step in India’s strategy to diversify trade partnerships and deepen economic engagement in the Indo-
Pacific region. The agreement, concluded in December 2025 after a fast-tracked negotiation process of
less than a year, is expected to enhance bilateral trade, investment flows, and market access across goods
and services.

A key feature of the agreement is the comprehensive tariff liberalization framework. India has secured 100
per cent duty-free access for over 8,000 export product categories in the New Zealand market, covering
sectors such as textiles, pharmaceuticals, engineering goods, and services. In return, India has agreed to
reduce or eliminate tariffs on around 95 per cent of New Zealand exports, including wool, wood products,
machinery, and select agricultural goods.

Importantly, the agreement reflects a balanced and calibrated approach to trade liberalization. India has
excluded sensitive sectors such as dairy, edible oils, and key agricultural products from tariff concessions
to safeguard domestic farmers and industries. At the same time, provisions have been included to
facilitate limited cooperation in dairy processing for re-export, without opening the domestic market to
direct competition.

Beyond goods trade, the agreement also includes provisions to enhance services trade and labor mobility.
Notably, New Zealand has committed to providing around 5,000 temporary work visas annually for Indian
professionals, along with additional work and holiday visas, creating new opportunities for skilled labour
and strengthening people-to-people ties.

From an investment perspective, the FTA is expected to significantly boost capital flows, with New Zealand
indicating a commitment to invest approximately $20 billion in India over the next 15 years. The
agreement also aims to double bilateral trade to around $5 billion within five years, highlighting its growth
potential.

Key Features of the Agreement

• Market Access:
o 100% duty-free access for Indian exports to New Zealand
o Tariff reduction/elimination on ~95% of New Zealand exports to India

• Sectoral Coverage:
o India gains in pharmaceuticals, textiles, engineering goods, and IT services
o New Zealand gains in wool, forestry, seafood, and industrial goods

• Sensitive Sector Protection:
o Dairy, edible oils, and key agricultural products excluded from liberalization

• Mobility Provisions:
o ~5,000 annual work visas for Indian professionals

• Investment Commitments:
o ~$20 billion investment expected from New Zealand

• Trade Target:
o Bilateral trade expected to double to $5 billion in 5 years

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