India, New Zealand seal landmark free trade deal, paving way for duty-free commerce

India and New Zealand took a big step closer on Monday, announcing a free trade agreement that promises to make everyday business between the two countries easier, cheaper and more connected.

Once in place, most goods moving between the two nations will be duty-free, a change expected to give a real boost to trade and investment on both sides.

The deal, expected to be signed in the first half of next year and reviewed after its first year, will slash or remove tariffs on 95% of New Zealand’s exports. More than half of those products will be able to enter India without duties from day one. Calling it a “historic” moment, New Zealand’s Trade and Investment Minister Todd McClay said the agreement reflects a shared ambition to deepen economic ties.

However, the pact goes beyond cargo and customs. New Zealand has pledged to invest US$20 billion (S$25.9 billion) in India over the next 15 years, and the agreement also makes it easier for Indian professionals, skilled workers and students to live, work and study in New Zealand—opening new pathways for people, not just products.

Indian exporters also stand to gain. New Delhi has secured zero-duty access for all its exports to New Zealand, a win for sectors ranging from textiles and apparel to gems and jewellery, handicrafts, engineering goods and automobiles.

“This Free Trade Agreement is about people as much as it is about trade,” Commerce Minister Piyush Goyal said, adding that it will give Indian businesses and young professionals the chance to “learn, work, and grow on a global stage.”

On the imports side, India will cut tariffs on items such as sheep meat, wool, coal, and most forestry products, while allowing duty-free access for certain dairy and food ingredients meant for re-exports. At the same time, the government has been careful to protect domestic farmers and industries, keeping sensitive products like dairy, sugar, spices, edible oils, and rubber off the table.

Industry groups have welcomed the move. Ranjeet Mehta, CEO and Secretary General of PHDCCI, said the agreement brings much-needed policy certainty and lowers costs for manufacturers, helping build long-term economic strength.

Trade between the two countries already runs into billions. Merchandise trade stood at US$1.3 billion in 2024–25, while total trade in goods and services touched US$2.4 billion last year. Officials believe the new agreement provides a steady, predictable framework to take this relationship much further.

The New Zealand pact is India’s third trade deal this year, following agreements with the UK and Oman. It also comes at a time when India is rethinking its global trade strategy, especially as higher U.S. tariffs have created new challenges for exporters.

As India pushes toward its goal of becoming a global export powerhouse, partnerships like this one with New Zealand are increasingly seen as a way to spread risk, open fresh markets, and ensure Indian businesses—and people—can thrive on the world stage.