India-New Zealand FTA – Explained Pointwise

The India-NZ FTA has recently been concluded in December 2025, under which the New Zealand will levy zero duty on 100% of India’s exports & bring in $20bn in FDI by 2030. The FTA is designed to double bilateral trade from the current $2.4 billion to $5 billion within the next five years.

What are some of the key highlights of the India-NZ FTA?

1. Investment Commitment: New Zealand has committed to facilitating $20 billion in investment into India over the next 15 years, mirroring the model used in India’s deal with the EFTA (European Free Trade Association).
2. Trade Growth: The agreement aims to double bilateral trade from the current $2.4 billion to $5 billion within five years.
3. Gains for India: New Zealand will provide zero-duty access on 100% of Indian exports immediately upon the deal entering into force. This covers 1,379 tariff lines, providing a massive boost to textiles, leather, gems, jewelry, and engineering goods.
4. Gains for New Zealand: India will reduce or eliminate tariffs on 95% of New Zealand’s exports – with 57% of these products becoming duty free from day one:
   1. Immediate Duty-Free: Wool, wooden logs, coking coal, and sheep meat.
   2. Phased Reduction: Wine (tariffs cut from 150% to 25-50% over 10 years), kiwifruit, and apples.
5. Safeguarded Sectors (Exclusions): India successfully protected its most sensitive sectors. There are no tariff concessions on dairy (milk, cheese, butter), onions, sugar, wheat, rice, or spices.
6. STEM Professionals: A new pathway for 5,000 temporary employment visas annually for Indian professionals (valid for up to 3 years) in fields like IT, engineering, and healthcare.
7. Traditional Occupations: For the first time, specific quotas are reserved for Yoga instructors, Ayurveda practitioners, Indian chefs, and music teachers.
8. Geographical Indications (GIs): New Zealand will amend its laws to recognize Indian GIs (like specialized spirits and textiles) on par with the protection it gives to the European Union.
9. Agricultural Productivity Partnership: Instead of just trading produce, the two nations will collaborate to improve Indian farming yields through Centres of Excellence. Focused projects for Apples, Kiwifruit, and Honey to share New Zealand’s advanced cold-chain and orchard management technology with Indian farmers. 
10. Women-led FTA: India-NZ FTA is also one of the first FTAs negotiated & concluded entirely by a women-led & women-driven team – from the chief negotiating officer to the ambassador to New Zealand.

What is the importance of India-NZ FTA?

1. Expanding Economic Footprint: The India-NZ FTA is a framework for deeper cooperation in the future. It is India’s conscious move to increase its global economic footprint & diversify its trade partners. Diversification of trade partners means that India does not have to be dependent on traditional markets like EU, the USA & China.
2. The Diary Win: For years, the dairy sector was the primary deal-breaker. New Zealand is a global dairy giant, while India has millions of small-scale dairy farmers. India successfully excluded dairy from the pact, proving that it can sign high-quality deals with developed nations without compromising its sensitive agricultural base. 
3. The “EFTA Model” of Binding Investment: Following the precedent set with the EFTA (European) deal, this FTA includes a binding commitment for $20 billion in investment into India over 15 years. If the investment targets are not met, India has the right to suspend certain trade concessions. This shifts the focus from “trade for trade’s sake” to “trade for investment and job creation.”. 
4. Professional Mobility: The new Temporary Employment Entry (TEE) visa for 5,000 professionals annually creates a dedicated legal pathway for IT, engineering, and healthcare experts.
5. AYUSH & Traditional Medicine: This is the first time New Zealand has signed a dedicated annex recognizing traditional medicine. It promotes India’s Ayurveda and Yoga on a global stage, facilitating “medical value travel.”
6. Oceania Gateway: For India, New Zealand acts as a strategic gateway to the wider Pacific Island markets, strengthening India’s influence in the Indo-Pacific region.
7. Supply Chain Resilience: By securing duty-free inputs like wooden logs, coking coal, and wool, the FTA helps Indian manufacturers lower their production costs. This supports the “Make in India” initiative by integrating Indian MSMEs into high-value global supply chains.
8. Soft Power: The Indian diaspora in New Zealand constitute 5% of its population. This creates a promising exchange & opens opportunities for soft power politics between the two nations.

What are the criticisms of India-NZ FTA?

1. Apple Farmers (J&K and Himachal): Apple growers in Kashmir and Himachal Pradesh have protested the reduction of import duties on New Zealand apples (cut from 50% to 25% within a quota). They argue this “violates promises” made by the government and will allow cheaper foreign fruit to crush local livelihoods.
2. Exclusion of Dairy: For the first time in its history, New Zealand signed an FTA that completely excludes core dairy products (milk, cheese, butter). The critics, which include the current New Zealand government’s coalition partners, argue this is a “bad deal” because dairy accounts for nearly 30% of New Zealand’s total exports.
3. Trade Deficit Worries: Skeptics point out that India’s past FTAs (like those with ASEAN and Japan) have often led to a widening trade deficit. They fear that despite the “investment” promises, the immediate surge in imports (wood, wool, coal) might outweigh export gains in the short term.
4. Increase in India’s Import Bill: Some critics caution that even without dairy concessions, deep tariff cuts on up to 95% of New Zealand goods could add to India’s overall import bill, pressuring domestic producers if safeguards and rules‑of‑origin are weak.

Conclusion: Even though the India-NZ FTA is considered historic, it is important for India to invest in R&D for increasing quality for increasing quality & competitiveness of its product if it has to thrive in the global market.