More Jobs, Higher Incomes: New Zealand PM Luxon Hails India Free Trade Agreement

New Zealand Prime Minister Christopher Luxon on Friday hailed the conclusion of a landmark Free Trade Agreement (FTA) with India, calling it a major breakthrough that would deliver more jobs, higher incomes and expanded export opportunities for his country.

Announcing the deal on X, Luxon said his government had fulfilled its first-term commitment to secure a trade pact with India, opening access to a market of 1.4 billion consumers. “This landmark deal means more jobs, higher incomes and more exports,” he said, describing the agreement as a foundation for long-term economic growth.

India and New Zealand jointly confirmed the successful conclusion of negotiations on a comprehensive FTA, one of India’s fastest-ever trade deals. The agreement aims to double bilateral trade within five years and unlock up to USD 20 billion in New Zealand investment into India over the next 15 years.

Fast-tracked negotiations, ambitious targets

Negotiations for the FTA were launched during Luxon’s visit to India in March 2025 and concluded in just nine months, reflecting strong political momentum on both sides. Prime Minister Narendra Modi and Luxon spoke by telephone ahead of the joint announcement, with officials describing the pact as “historic, ambitious and mutually beneficial”.

The agreement is expected to be formally signed in the first half of 2026 and implemented within seven to eight months after the completion of domestic ratification processes. Once in force, bilateral trade is projected to rise to USD 5 billion within five years. Merchandise trade currently stands at USD 1.3 billion, while total trade in goods and services is estimated at around USD 2.4 billion.

Market access and workforce mobility

Under the pact, New Zealand will grant duty-free access to 100 per cent of Indian exports from day one, eliminating tariffs of up to 10 per cent across nearly 450 tariff lines. These include textiles, apparel, leather goods, automobiles, auto components, carpets, ceramics and pharmaceuticals.

The agreement is expected to benefit labour-intensive Indian sectors such as textiles, footwear, gems and jewellery, engineering goods, plastics, rubber and processed foods. Regulatory cooperation measures will also ease market access for Indian pharmaceutical and medical device exporters.

India will gain expanded access to temporary employment pathways in New Zealand. A new visa route will allow up to 5,000 Indian professionals annually to work for up to three years across sectors such as IT, healthcare, education, construction and engineering. Additional provisions include working holiday visas for 1,000 young Indians each year and improved post-study work opportunities for Indian students, particularly in STEM fields.

Safeguards and investment commitments

While New Zealand will see tariffs reduced or eliminated on around 95 per cent of its exports to India, New Delhi has excluded sensitive sectors such as dairy, sugar, edible oils, onions, spices and certain metals to protect farmers and MSMEs. Quota-based concessions have been provided for products like kiwifruit and apples.

A central pillar of the agreement is New Zealand’s commitment to invest USD 20 billion in India over 15 years across manufacturing, infrastructure, services and innovation. Commerce and Industry Minister Piyush Goyal said the investment would strengthen domestic manufacturing and generate employment.

The pact also includes cooperation in agri-technology, forestry, fisheries, tourism, AYUSH, audio-visual services and traditional knowledge systems.

Strategic significance

Indian officials see the agreement as a key step in diversifying export markets in the Oceania region, while Luxon described India as the world’s fastest-growing major economy and a crucial partner for New Zealand’s future prosperity.

The India–New Zealand FTA is India’s third trade agreement this year and the seventh finalised under the NDA government, strengthening New Delhi’s broader strategy of deepening economic ties with major global partners.