India and New Zealand started official Free Trade Agreement negotiations to develop economic joint ventures and improve bilateral commerce. The negotiation for an FTA comes after India achieved a similar agreement with Australia during 2022. The FTA targets three main goals which include strengthening supply chains, enlarging business opportunities and making economies more resilient. The volume of trade between India and New Zealand has experienced changes since India achieved yearly export increases of 5% resulting in $682M in 2023 exports while New Zealand exports lowered to $369M. The total value of the trade reached $1.75B as India focused on expanding its service sector operations. The main export products from India consist of pharmaceutical products, wool items and metallurgical scrap materials. The parties resumed FTA negotiations after a decade-long suspension to boost their trade framework and service connections as well as investment relationships.
Key Points
Official Announcement
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The announcement took place on March 16, 2025 when Piyush Goyal, the Indian Commerce Minister met with New Zealand Trade Minister Todd McClay in New Delhi.
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The negotiation for this Free Trade Agreement took place shortly before New Zealand PM Christopher Luxon led his official visit to India.
Bilateral Trade Scenario
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The economic exchange between the countries reached $1 billion during the period from April 2024 until January 2025.
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Trade between India and New Zealand experienced a significant shift as the initially positive $203 million surplus turned into a decreased $33 million surplus during 2024-25 due to rising import numbers.
Key Trade Sectors
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India’s Exports to New Zealand: Pharmaceuticals, machinery, textiles, pearls, and precious stones.
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India’s Imports from New Zealand: Wool, iron & steel, fruits & nuts, aluminum.
Indian Business Presence in New Zealand
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HCL Technologies along with Infosys and Tech Mahindra maintain business operations in New Zealand.
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The Indian banking sector includes operations of Bank of India and Bank of Baroda through their local branches.
Objective of FTA
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organizations should work to create a balanced trading system and supply chain connections.
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New Zealand aims to increase trading opportunities for its companies and consumers throughout markets.
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This agreement will enhance economic stability and joint economic success of both parties.
Bilateral Relations and Cooperation
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Diplomatic Ties: Established in 1952, with growing engagements in trade, education, and cultural exchanges.
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Agreements: MoUs in trade, taxation, civil aviation, education, and scientific research.
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Educational Collaboration: The India-New Zealand Education Council fosters academic partnerships and student exchanges.
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Science & Technology: Joint research in food, dairy, ocean science, and polar research.
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The Indian population active in New Zealand business combines with their substantial influence on cultural integration throughout the nation.
Trade Relation Between India and New Zealand
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The yearly export growth rate of Indian exports to New Zealand remained at 5% throughout 2018-2023.
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Total Trade Value amounting to $1.75 billion exists between both nations while India maintains a $0.91 billion market share and NZ follows with $0.84 billion.
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In 2023 India achieved minimal trade surplus with New Zealand worth US$ -78.26M (almost the balance was in favor of India).
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The countries initiated fresh talks about forming an FTA after stopping negotiations during the previous decade to advance trading and service connections and investment opportunities.
Last Five Year Trade between India and New Zealand
|
Year |
India's Exports to NZ (US$M) |
New Zealand's Exports to India (US$M) |
Total Trade (US$B) |
Trade Balance (US$M) |
|
2018 |
534 |
693 |
1.23 |
-159 |
|
2019 |
– |
– |
– |
– |
|
2020 |
– |
– |
– |
– |
|
2021 |
– |
– |
– |
– |
|
2022 |
– |
– |
– |
– |
|
2023 |
682 |
369 |
1.75 |
+313 |
|
2024 |
Slight Decline |
Growth |
– |
-78.26 |
Key Exports Between India and New Zealand (2023)
|
India’s Exports to New Zealand |
New Zealand’s Exports to India |
|
1.Pharmaceuticals (Packaged Medicaments) |
1.Wool |
|
2.Refined Petroleum |
2.Scrap Iron |
|
3.House Linen |
3.Scrap Aluminium |
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Note: Services Trade (2018): NZ exported $3.46B in services to India, mainly Travel ($3.34B). |
|
Strategic Significance
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New Zealand holds extensive importance as a partner entity for agricultural and dairy sectors and information technology services.
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The educational and research exchange programs create advantages for scholars and students.
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Sports activities mostly rugby along with cricket together with tourism help New Zealand build stronger cultural relationships with other countries.
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Joint efforts on climate change and sustainable development in global forums.
Conclusion
India-New Zealand FTA negotiations represent a vital moment that advances their entire diplomatic relationship. Economic cooperation together with trade ties and cultural development will create stronger bilateral collaboration between India and NZ. Moving ahead, both parties need to prioritize strategic investment promotion together with educational exchanges while expanding tourism exchange and establishing collaboration for worldwide challenges to obtain mutual benefits.
