Tue Dec 30 18:38:00 UTC 2025: ## India and New Zealand Seal Landmark Trade Deal, Signalling India’s Rising Global Economic Influence
New Delhi – In a move highlighting India’s growing economic clout and strategic importance on the world stage, Prime Ministers Narendra Modi and Christopher Luxon announced the conclusion of the India-New Zealand Free Trade Agreement (FTA) on December 22, 2025. The agreement, expected to be signed early next year, signals a strengthening of India’s international trade relations and a shift towards diversifying trade partnerships.
The FTA focuses heavily on services and labor mobility, sectors where India possesses a significant comparative advantage. Notably, New Zealand will eliminate duties on 100% of its tariff lines, granting duty-free access to all Indian exports, while India will offer market access on 70% of its tariff lines.
“From both sides, there have been firsts,” notes a statement from the Confederation of Indian Industry (CII), referring to India’s duty concessions on apples and New Zealand’s unprecedented service access offer, encompassing sectors like IT, education, fintech, telecom, tourism, and construction. New Zealand has also committed to invest $20 billion in India over the next 15 years.
The FTA aims to boost bilateral trade, projected to double from $2.4 billion in 2024-25 to approximately $4.8 billion by 2030. Indian sectors poised to benefit include textiles, apparel, leather, engineering goods, pharmaceuticals, and farm products. Moreover, duty-free access to intermediate inputs like wooden logs and metal scrap will lower manufacturing costs.
A key feature of the agreement is an annex on health and traditional medicine services, creating new opportunities for India’s pharmaceutical and health-care industries and solidifying India’s role as a global health partner. The deal also cautiously addresses agriculture, focusing on value chain development for specific products like apples, kiwifruit, and honey, while protecting sensitive areas such as dairy and sugar.
Chandrajit Banerjee, Director General of CII, emphasizes the importance of optimal utilization of the FTA. He urges business associations, large enterprises, and policymakers to build awareness and capabilities to translate the negotiated benefits into effective market access. He further encourages expanding services trade, deepening skills and education linkages, and leveraging mobility and diaspora networks.
The India-New Zealand FTA strengthens India’s position as a reliable and stable trade partner, particularly amid ongoing global economic uncertainties. With this agreement, India has now concluded economic partnership agreements with all Regional Comprehensive Economic Partnership (RCEP) members, except China. It reflects a growing trust from developed economies in India’s trade policies and its ability to establish norms of effective cooperation through balanced and high-quality agreements.
The FTA is anticipated to propel Indian firms up global value chains and contribute towards the nation’s $7 trillion economy goal by 2030.
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