India-New Zealand FTA: Expanding India’s footprint in Oceania

The free trade agreement (FTA) between India and New Zealand, signed on April 27, 2026, is now operative. The agreement comprises 20 chapters, with several contemporary and forward-looking chapters, such as investment promotion and cooperation; trade and sustainable development; cultural, trade, traditional knowledge and economic cooperation; and economic cooperation and technical assistance, making the agreement more comprehensive in its scope and coverage.

To put the trade relationship between India and New Zealand into perspective, India’s merchandise trade with New Zealand rose to $1.2 billion in FY26 from $862.4 million in FY22, registering a compound annual growth rate (CAGR) of 7.6%, according to the data from the Ministry of Commerce and Industry.

Data from the Department for Promotion of Industry and Internal Trade (DPIIT) shows that New Zealand’s foreign direct investment (FDI) equity inflows into India during April 2000 to March 2026 amounted to $88.80 million. India’s exports of services increased by 13% from CY2023 to CY2024, rising from $561 million to $634 million with travel, telecommunication, computer and information services, and other business services leading the list, as per World Trade Organization’s data.


From RCEP to bilateral trade partnerships

India withdrew from Regional Comprehensive Economic Partnership (RCEP) negotiations in 2019 due to concerns that the agreement could lead to an influx of imports, particularly from China, widen trade deficits and adversely impact India’s sensitive sectors. While this decision shielded India’s domestic industries but it also limited India’s participation in regional supply chains.

Against this backdrop, the implementation of this FTA marks an important milestone in India’s trade trajectory. Following the signing of this FTA, India has now inked FTAs with all RCEP members, except China, a development that will strengthen India’s role in the Asia-Pacific trade architecture and promote deeper integration into regional and global supply chains.

India may have opted out of RCEP, but not out of regional integration.Now, the real challenge is to translate these bilateral FTAs into tangible gains in trade, investment, and supply-chain integration.

Unlocking market access in goods trade

Indian exports have received 100% duty-free access to New Zealand’s market from day one, boosting the export competitiveness of India’s labour-intensive sectors, including textiles, apparel, leather, footwear, gems & jewellery, engineering goods, and processed foods. This will expand export opportunities for micro, small, and medium enterprises (MSMEs), support employment generation, and promote India’s integration into global value chains.

On the other hand, India has offered market access on 70.03% of the tariff lines while keeping 29.97% of the tariff lines in the exclusion list. India has also provided Tariff Rate Quotas (TRQs) for apples, kiwifruit, and Manuka honey, commodities of export interest for New Zealand, while safeguarding India’s sensitive sectors.

India receives duty-free access to a small but developed market while simultaneously adopting a carefully calibrated approach to tariff liberalisation.

One of the benefits of this FTA is that it narrows the tariff disadvantage faced by Indian exporters vis-à-vis China, which already enjoys preferential access to the New Zealand market under its FTA and remains New Zealand’s largest trading partner. But lower tariffs alone do not guarantee export gains. Success will depend on India’s ability to focus on specific tariff lines where tariff preferences reinforce genuine competitive advantages, translating these tariff preferences into gains in market share.

The FTA opens a door that China already knows how to walk through.

Beyond tariffs: Services, investment, and technical cooperation

New Zealand has offered commitments in 118 services sub-sectors with binding access and Most Favoured Nation (MFN) treatment in 139 sectors. In the area of student mobility and visa pathways, New Zealand has guaranteed students the right to work up to 20 hours per week while studying. It has also committed to post-study work rights of up to three years for STEM bachelor’s and master's graduates and up to four years for doctoral graduates. These commitments are particularly significant, given that India is the second-largest source of international students in New Zealand after China.

The agreement further provides opportunities for up to 5,000 Indian professionals in information technology (IT), healthcare, engineering, and other specialised occupations to work in New Zealand for periods of up to three years. This creates new avenues for India’s skilled workforce and youth, while reinforcing the relationship between mobility and trade.

By promoting cooperation in fintech, digital payments, and payment-system interoperability, the India-New Zealand FTA lays the foundation for deeper digital financial integration. This is expected to foster innovation, improve connectivity between businesses and consumers, and create new opportunities in the rapidly expanding digital economy. There is already tangible momentum. Underscoring this progress, Prime Minister Narendra Modi stated that “we are moving ahead with connecting India’s UPI (Unified Payments Interface) and New Zealand’s payment system.”

The agreement also recognises the growing importance of health-related services and traditional medicine, facilitating trade in these sectors and supporting medical value travel between the two countries.

The chapter on investment promotion and cooperation is particularly important. It seeks to enhance FDI (foreign direct investment) as a driver of economic growth, capital formation, capacity building, innovation, and employment generation. New Zealand’s commitment to facilitate $20 billion of investment over a 15-year period sends a strong signal of intent. The focus should be on sectors such as renewable energy, digital services, modern infrastructure, and other high value-added industries, thereby supporting deeper integration into value chains.

What is perhaps most interesting is the chapter on economic cooperation and technical assistance. It introduces a new dimension to the FTA by moving beyond market access and tariff concessions to promoting knowledge-sharing and capacity building between India and New Zealand.

The Agriculture Productivity Partnership (APP) establishes a framework for long-term collaboration aimed at improving productivity and returns for Indian farmers, fishers, and producers across agriculture and allied sectors. The partnership is expected to facilitate engagement across agricultural value chains and includes action plans for products such as kiwifruit, apples, and honey, including centres of excellence, to support technology transfer, dissemination of best farming practices, improvements in post-harvest management, and the strengthening of storage, logistics, and supply chain systems.

The deeper promise of the FTA lies not merely in enabling freer trade, but in strengthening the capacity to trade.

The FTA offers a promising platform to deepen cooperation in areas that extend beyond traditional trade. The significance of this agreement lies not only in opening markets, but its value rests in diversifying supply chains and linking trade more closely with talent mobility, investment, innovation, and services.

In conclusion, the ultimate measure of success will be the volume of investment mobilised and the projects successfully implemented. The emphasis should, therefore, be on translating intent into tangible outcomes.

The author is Partner, Deloitte. Views are personal