Why in news?

India and New Zealand have concluded talks on a free trade agreement, granting India tariff-free access to New Zealand’s market, attracting $20 billion in investment over 15 years, and aiming to double bilateral trade to $5 billion within five years.

The FTA will be formally signed in the first half of 2026.

What’s in Today’s Article?

• India–New Zealand Bilateral Relations
• India–New Zealand Free Trade Agreement: A New Phase in Bilateral Ties
• India–New Zealand Free Trade Agreement: Key Highlights

India–New Zealand Bilateral Relations

• India and New Zealand established diplomatic relations in 1952 and share enduring ties rooted in Commonwealth membership, common law traditions, and democratic governance.
• Sporting links—especially cricket, hockey, and mountaineering—and tourism have long fostered goodwill between the two societies.
• Strategic Vision and Policy Frameworks
  • New Zealand has identified India as a priority partner through initiatives such as “Opening Doors to India” (2011) and the NZ Inc. India Strategy.
  • This was further deepened by the “India–NZ 2025: Investing in the Relationship” strategy, envisioning a more enduring strategic partnership across political, economic, and people-centric domains.
• Trade and economic ties
  • New Zealand is India's 11th largest two-way trading partner.
    • India-New Zealand total trade in 2023-24 was valued at US$ 1.75 billion.
  • Key trade sectors: Education, tourism, dairy, food processing, pharmaceuticals, renewable energy, and critical minerals.
  • Indian exports to NZ: Pharmaceuticals, precious metals & gems, textiles, motor vehicles, and non-knitted apparel.
  • Indian imports from NZ: Logs, forestry products, wool, edible fruit & nuts.
• Defence and Maritime Cooperation
  • Defence ties are expanding steadily:
    • Regular naval visits and port calls by Indian Navy ships.
    • High-level naval leadership exchanges.
    • Cooperation under Combined Task Force-150, with Indian Navy personnel contributing while NZ leads the task force.
  • These engagements support maritime security and Indo-Pacific stability.
• Education and Knowledge Partnerships
  • India is the second-largest source of international students in NZ (≈8,000 students).
  • Collaboration through:
    • NZ Centre at IIT Delhi
    • Joint research projects in cancer, robotics, cybersecurity, waste management, and medical technology
    • Education cooperation agreements with GIFT City and IIM Ahmedabad
• People-to-People and Cultural Ties
  • Indian-origin population in NZ: ~292,000, with Hindi as the fifth most spoken language.
  • Vibrant celebration of Indian festivals and strong presence of Indian cultural institutions.
  • Deep sporting connections, including shared mountaineering heritage linked to Sir Edmund Hillary.

India–New Zealand Free Trade Agreement: A New Phase in Bilateral Ties

• India and New Zealand have concluded a Free Trade Agreement (FTA), ending negotiations that began in March 2025.
• FTA talks were launched during Luxon’s visit to India, and the deal was finalised in a record nine months, reflecting strong political commitment and a shared goal of deepening bilateral relations.

India–New Zealand FTA: Key Highlights

• The FTA is expected to double bilateral trade within five years, deepen economic engagement, and strengthen cooperation beyond trade—covering defence, education, sports, innovation, and people-to-people ties.
• Investment and Market Access Gains
  • Investment: New Zealand will invest $20 billion in India over 15 years.
  • Healthcare: A dedicated health and traditional medicine annex—New Zealand’s first such agreement with any country—facilitates trade in health services.
• Tariff Liberalisation
  • 95% of New Zealand’s exports will see tariffs eliminated or reduced.
  • 57% of exports to India will be duty-free from day one, rising to 82% on full implementation; the remaining 13% will see significant tariff cuts.
  • India protected sensitive sectors—no concessions on dairy, onions, sugar, spices, edible oils, rubber, rice, wheat, and soya.
• Boost to Jobs and Exports
  • The FTA is expected to lift labour-intensive sectors—apparel, leather, textiles, rubber, footwear, home décor—and promote exports of automobiles, auto components, machinery, electronics, electricals, and pharmaceuticals.
• Mobility and Services Access
  • 5,000 temporary employment visas annually for Indian professionals, valid up to three years.
  • India gains market access across 118 services sectors and MFN status in 139 sectors, expanding opportunities for Indian professionals.
    • Most Favoured Nation (MFN) status is a key WTO principle that requires countries to treat all WTO members equally in trade.
  • Coverage includes IT, engineering, healthcare, education, construction, and niche roles like AYUSH practitioners, yoga instructors, chefs, and music teachers—strengthening services trade and workforce mobility.