- In a landmark bilateral development, India and New Zealand have agreed on a Free Trade Agreement allowing 100 per cent duty-free access to Indian products in New Zealand.
- New Zealand has also agreed to invest 20 billion dollars in India over the next 15 years.
- India has taken a cautious and pragmatic approach by excluding the dairy sector.
In a landmark bilateral development, India and New Zealand have agreed on a Free Trade Agreement allowing 100 per cent duty-free access to Indian products in New Zealand. This is a game-changer not only for the bilateral relationship between the two countries but also in the context of the rapidly changing geo-economic environment.
At a time when the United States of America’s belligerent economic policies have created disruptions in the global economy, and with the Iran-United States conflict, along with the blockade of the Hormuz Strait, creating an unprecedented global crisis, emerging economies like India are bearing the brunt. This has triggered energy concerns and significantly disrupted global trade. In such a situation, India’s continuous pragmatic economic policies are aimed at shielding its economy from ongoing geo-economic instability.
The Free Trade Agreement between India and New Zealand is a significant development. It will have immediate tangible benefits, especially for India’s small and medium enterprises. Products such as textiles, leather, gems and jewellery will receive duty-free access to the New Zealand market. Additionally, India has committed to expanding its presence in sectors such as construction, IT services, and tourism in New Zealand.
New Zealand has also agreed to invest 20 billion dollars in India over the next 15 years. The talks for this agreement resumed in March 2025 and were concluded within a short span of time, making it one of the fastest trade agreements signed by India. The agreement, concluded in December 2025, includes 20 chapters covering trade in goods, rules of origin, services, customs procedures, trade facilitation, and sanitary and phytosanitary measures.
A key highlight is that up to 5000 skilled Indian professionals will be allowed to work in New Zealand, contributing to its economy. This agreement is expected to boost the overall merchandise trade between the two countries, which stood at approximately 1.3 billion dollars in 2024 to 2025. The broader objective is to diversify trade, involve multiple sectors, and deepen economic engagement.
However, India has taken a cautious and pragmatic approach by excluding the dairy sector. This is a critical decision since small farmers and cooperatives largely drive India’s dairy industry. Allowing New Zealand dairy imports could disrupt the domestic market and create both economic and political challenges. This reflects India’s balanced approach, where it remains open to trade while protecting its farmers and domestic interests.
This agreement also signals that in a period of global economic uncertainty, India is emerging as a stable and reliable economic partner. Countries like New Zealand are increasingly willing to engage with India, recognising its economic potential.
At a time when global institutions such as the World Trade Organisation are facing stagnation due to a lack of consensus, India is actively pursuing bilateral trade agreements. Agreements with the United Arab Emirates, Australia, the European Union, and now New Zealand highlight India’s strategic use of trade partnerships to advance its economic interests.
Aayush Pal is a freelance writer on contemporary geopolitical developments. The views expressed in his work are entirely his own.
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