On Monday, 22 December 2025, Prime Minister Narendra Modi and New Zealand PM Christopher Luxon announced the conclusion of a landmark Free Trade Agreement.

The deal eliminates or reduces tariffs on 95 per cent of New Zealand’s exports to India and grants zero-duty access to 100 per cent of Indian goods. Over the next 15 years, New Zealand is projected to invest USD 20 billion into India, with a strategic goal to double bilateral trade within just five years.

This agreement aims to foster economic growth by opening India’s 1.4 billion consumer market to Kiwi businesses while securing thousands of professional visas for Indian workers.

India-New Zealand FTA

This Free Trade Agreement (FTA) signifies a monumental shift in the relationship between India and New Zealand, moving beyond cricket and tourism into deep economic integration. Negotiated in a record time of just nine months, the pact addresses long-standing trade barriers that previously hindered growth.

For New Zealand, the agreement is a game-changer, projected to increase exports by USD 1.1 billion to USD 1.3 billion annually. Prime Minister Luxon highlighted that the deal is fundamentally about people, noting that it will generate more jobs and raise wages.

By diversifying trade partnerships, both nations are insulating their economies against global volatility and building a resilient Indo-Pacific supply chain.

Billions in Investment

A standout feature of the pact is the commitment from New Zealand to invest USD 20 billion in India over the next decade and a half. This capital is expected to flow into high-growth sectors such as food processing, renewable energy, and digital technology.

Additionally, New Zealand has secured preferential access for its premium agricultural products like apples, kiwifruit, and wine. Crucially, the deal includes “Agricultural Productivity Partnerships” to ensure that Indian farmers benefit from Kiwi technology rather than facing direct competition.

This collaborative approach ensures that the economic gains are shared, fostering a spirit of mutual prosperity and long-term industrial partnership.

Market Access

For India, the FTA opens significant doors for its young and talented workforce. The agreement provides dedicated visa quotas for 5,000 Indian professionals and 1,000 students annually, along with expanded post-study work rights.

Market access has been secured across 118 service sectors, including IT, healthcare, and traditional Indian medicine (AYUSH). This focus on “services mobility” ensures that Indian service providers can compete on a level playing field in New Zealand.

By facilitating the movement of skilled labor, the treaty acknowledges that human capital is just as vital as physical goods in the modern global economy, strengthening the people-to-people ties that bind these two democracies.

Indo-Pacific Corridor

Beyond the numbers, this agreement is a strategic masterstroke for India’s “Act East” policy. It positions New Zealand as a key partner in the Southern Hemisphere, creating a robust trade corridor that bridges the Indian and Pacific Oceans.

Commerce Minister Piyush Goyal noted that the pact is “balanced and fair,” protecting sensitive domestic industries while encouraging competition. As India marches toward becoming the world’s third-largest economy, partnerships like this provide the necessary infrastructure for sustained growth.

The deal also includes provisions for digital trade and intellectual property, ensuring that the legal framework remains modern and conducive to the innovations of the 21st century.

The Logical Indian’s Perspective

At The Logical Indian, we view this agreement as a triumph of diplomacy over protectionism. In an era where many nations are turning inward, the ability of India and New Zealand to find common ground in record time is a testament to the power of dialogue.

We celebrate the deal’s focus on professional mobility and technology transfers, which directly benefits students and small-scale entrepreneurs. True progress is achieved when trade lifts all boats, from the Kiwi orchardist to the Indian IT consultant. However, we must ensure that this rapid growth remains environmentally sustainable.

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