New Delhi [India], December 22 (ANI): The India-New Zealand Free Trade Agreement (FTA) represents a framework for deeper cooperation rather than a major trade breakthrough, with its real impact depending on how both countries strengthen practical economic links beyond tariff reductions, said the Global Trade Research Initiative (GTRI) in a note.
According to GTRI, given the limited scale of bilateral trade at USD 2.1 billion in FY2025, the FTA is strategic in nature and not volume-driven.
While the agreement brings greater predictability in goods, services, mobility and investment, its success will hinge on building supply chains, expanding services trade, deepening education and skills partnerships, and leveraging the Indian diaspora along with mobility provisions.
It stated, “Given the limited scale of bilateral trade–USD 2.1 billion in FY2025–the India-New Zealand FTA is less a trade breakthrough than a framework for deeper cooperation.”
The think tank noted that an FTA alone is unlikely to unlock the full potential of economic ties between India and New Zealand, as current trade volumes remain modest. Business groups on both sides believe the pact must be supported by practical steps to deepen commercial engagement.
New Zealand could expand exports of dairy and horticulture products to India even at MFN tariffs, while India could scale up shipments of pharmaceuticals, textiles and IT services to New Zealand.
GTRI added that Wellington could also diversify its engagement by growing education, tourism and aviation training services for Indian students and professionals. People-to-people links and better connectivity will be crucial in this effort.
New Zealand’s Indian diaspora of over 300,000 people, accounting for about 5 per cent of its population, provides a strong bridge for trade and investment. Easier visas, faster student pathways and lower education costs could further boost services trade.
Looking ahead, GTRI said both countries could aim to double two-way trade by 2030 by using the FTA as a stable platform.
This could be achieved through early tariff relief on select products, stronger business engagement, and sectoral cooperation in areas such as agriculture, forestry, fintech and education, supported by the India-New Zealand Business Council.
More direct flights, simpler visa rules and mutual recognition of professional qualifications, especially in IT, healthcare and aviation, would further ease movement.
India and New Zealand have concluded FTA negotiations and are set to sign the deal in early 2026. The negotiations were concluded on December 22, 2025, marking India’s seventh trade pact since 2020.
In FY2025, India exported USD 711.1 million worth of goods to New Zealand, led by aviation fuel, textiles, pharmaceuticals and machinery, while New Zealand’s USD 587.1 million exports to India were dominated by raw materials, scrap metals, coal and farm-linked inputs. The FTA covers 20 chapters, extending beyond tariffs into investment, MSMEs, IPR, sustainability and traditional knowledge. While New Zealand will eliminate duties on 100 per cent of tariff lines, India will open 70 per cent with safeguards for sensitive farm products.
With mobility, services and investment at its core, the FTA is seen as a foundation for a broader and more diversified economic relationship, GTRI said. (ANI)
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