Negotiations for a free trade agreement between India and New Zealand are nearing completion, as stated by Commerce Secretary Rajesh Agrawal. After a series of discussions at both official and ministerial levels, Agrawal expressed optimism about finalizing the agreement soon. The talks, which commenced on March 16, 2025, have intensified with both virtual and in-person meetings focused on resolving outstanding issues. This proposed agreement is expected to significantly enhance bilateral trade, which has already experienced substantial growth.
Progress in Negotiations
The fourth round of negotiations has recently concluded, with officials from both countries indicating a favorable position to finalize the free trade agreement. Agrawal noted the positive momentum, expressing, “We are in a good zone where we hope that the agreement will be closed and finalized soon.” Significant interactions have included visits from key officials, such as New Zealand’s Trade Minister Todd McClay, who met with India’s Commerce and Industry Minister Piyush Goyal to assess the negotiation progress. This collaborative approach highlights both nations’ commitment to strengthening their economic ties.
Trade Growth and Expectations
Bilateral merchandise trade between India and New Zealand reached $1.3 billion in the fiscal year 2024-25, marking an impressive 49 percent increase from the previous year. Officials anticipate that the free trade agreement will further stimulate trade flows, bolster investment ties, and improve supply-chain resilience. The agreement is designed to create a stable and predictable environment for businesses in both countries, thereby facilitating smoother trade operations. New Zealand’s low average import duty of 2.3 percent is expected to expedite market access once the agreement is finalized.
Historical Context of Trade Talks
These negotiations build on earlier discussions that began in April 2010 when India and New Zealand initiated talks on a Comprehensive Economic Cooperation Agreement (CECA). However, those discussions stalled after nine rounds in 2015. The renewed emphasis on a free trade agreement reflects both countries’ desire to revitalize their economic partnership and reap mutual benefits. The proposed agreement aims to reduce or eliminate customs duties on a wide range of goods while also relaxing regulations to promote trade in services and investments.
Key Exports Between India and New Zealand
India primarily exports a diverse array of products to New Zealand, including clothing, textiles, pharmaceuticals, refined petroleum, agricultural machinery, automobiles, and electronics, along with specialty items like basmati rice and diamonds. Conversely, New Zealand’s major exports to India consist of agricultural products and minerals, such as apples, kiwifruit, lamb, milk products, and timber. This diverse trade portfolio highlights the potential for increased economic collaboration between the two nations, further underscoring the importance of finalizing the free trade agreement.
Digihunt is not a financial advisor and this is not investment advice.