India’s Fastest-Ever FTA: How the New Zealand Deal Reshapes Trade, Jobs and Exports
India has sealed one of its most ambitious trade deals yet, and at record speed.
On December 22, 2025, India and New Zealand concluded negotiations for a comprehensive Free Trade Agreement (FTA) in just nine months, making it India’s fastest trade pact with a developed economy. Once implemented, New Zealand will eliminate tariffs on 100% of its tariff lines, offering zero-duty access to all Indian exports from day one.
For exporters, students, professionals—and eventually consumers—this is a deal with real consequences.
Negotiations began on March 16, 2025, during New Zealand Prime Minister Christopher Luxon’s visit to India and wrapped up after just five intensive rounds. According to Commerce Minister Piyush Goyal, the pace reflects strong political alignment between Luxon and Prime Minister Narendra Modi to deepen bilateral trade ties.
The agreement—covering goods, services, investment and mobility—is expected to be signed in early 2026 and will become India’s seventh trade pact since 2020, underlining a sharp acceleration in trade diplomacy.
Big wins for Indian exporters
The headline gain is clear: zero tariffs across the board in New Zealand.
Labour-intensive sectors stand to benefit immediately. Indian textiles and apparel will enjoy duty-free access across 1,057 tariff lines, targeting a $1.9-billion import market. Leather and footwear gain similar relief across 181 tariff lines, while engineering goods—already one of India’s fastest-growing export categories—see duties removed across 1,396 lines.
For Indian exporters, this dramatically improves price competitiveness against rivals from Southeast Asia and Latin America.
The services chapter may be even more consequential.
India secured New Zealand’s most ambitious services commitments ever, covering 118 services sectors—from IT and professional services to education, healthcare, construction, tourism and audio-visual services. Most Favoured Nation treatment applies to 139 sub-sectors, setting a new benchmark for India’s services trade.
Mobility provisions add another layer of impact. Indian students graduating with degrees or honours will be eligible for three-year work visas, while STEM and postgraduate graduates can access four-year visas. A dedicated quota of 5,000 skilled professionals—including yoga instructors, chefs, AYUSH practitioners and nurses—will receive three-year work permits. Another 1,000 working holiday visas annually will support youth mobility.
Together, these provisions strengthen India’s export of talent alongside goods and services.
New Zealand has also committed to facilitating $20 billion in investment into India over the next 15 years. Crucially, this promise comes with a safeguard: a rebalancing mechanism that allows trade concessions to be suspended if investment targets are not met—mirroring provisions used in the European Free Trade Association model.
The message is clear: access comes with responsibility.
Protecting India’s red lines
While New Zealand opened its market fully, India moved more cautiously.
New Delhi offered tariff liberalisation on about 70% of its tariff lines, keeping 30% excluded to protect sensitive sectors. Dairy remains a firm red line—no duty concessions for milk, butter or cheese. Other vulnerable areas such as sugar, pulses and select oilseeds are shielded through safeguards to protect farmers and food security.
The New Zealand pact follows two major agreements in 2025: the India–UK Comprehensive Economic and Trade Agreement and the India–Oman Comprehensive Economic Partnership Agreement. Together, they signal India’s shift from defensive trade policy to targeted, export-led engagement with developed markets.
Once signed—likely in the first quarter of 2026—the FTA will require parliamentary ratification in New Zealand. Implementation is expected within six to seven months, meaning exporters could start seeing zero-duty benefits by mid-2026.
Bilateral trade has already grown 49%, reaching $1.3 billion in 2024–25. With total two-way trade at $2.4 billion, the FTA aims to double volumes within five years, driven by early tariff relief and cooperation in fintech, education and services.
For India, this is not just a fast deal—it is a strategically calibrated one, designed to boost exports, protect domestic priorities, and lock in long-term growth.
(yMedia and ANI are content partners for this story)