New Delhi: The announcement followed a telephone conversation between the two leaders, who noted that the FTA negotiations, initiated during Luxon’s visit to India in March 2025, were concluded in a record nine months, reflecting strong political will and shared ambition to deepen bilateral ties.

The agreement is expected to significantly enhance economic engagement between India and New Zealand, with both leaders expressing confidence that bilateral trade will double over the next five years. New Zealand has also committed to invest USD 20 billion in India over a 15-year period, following a model similar to the European Free Trade Association (EFTA) framework. This investment commitment will be backed by a rebalancing mechanism, allowing trade concessions to be suspended if targets are not met.

The FTA covers goods, services, investment, mobility and trade facilitation. New Zealand will reduce or remove tariffs on 95 per cent of its exports to India, with Luxon stating that New Zealand exports to India could rise by USD 1.1 billion to USD 1.3 billion annually over the next two decades. He said the agreement would boost jobs, wages and business opportunities, while giving Kiwi firms access to India’s 1.4 billion consumers.

A major highlight of the pact is services and mobility. New Zealand has offered market access in 118 services sectors and Most Favoured Nation (MFN) treatment in 139 sectors. India, in turn, has offered access in 106 services sectors and MFN treatment in 45 sectors. An annex on health and traditional medicine services, signed by New Zealand for the first time with any country, has been included to facilitate trade in health-related services.

On education and mobility, New Zealand has signed its first-ever annex on student mobility and post-study work visas, offering uncapped arrangements and locking in 20 hours of work per week for Indian students. Post-study work visas range from up to three years for STEM bachelor’s and master’s graduates to up to four years for doctorate holders. A new temporary employment visa pathway will allow up to 5,000 Indian professionals at any time to work in New Zealand for up to three years across sectors such as IT, engineering, healthcare, education, construction, as well as traditional Indian occupations including AYUSH practitioners, yoga instructors, chefs and music teachers. Additionally, a multiple-entry working holiday visa for 1,000 young Indians annually has been agreed.

The agreement places special emphasis on Micro, Small and Medium Enterprises (MSMEs), aiming to strengthen institutional linkages and improve access to trade-related information. It also establishes a robust Rules of Origin framework to prevent circumvention and ensure the integrity of preferential market access.

In goods trade, India’s average MFN tariff will decline from 16.2 per cent to 13.18 per cent upon the FTA’s entry into force, further reducing to 10.30 per cent after five years and 9.06 per cent by the tenth year. Market access has been granted on just over 70 per cent of tariff lines, while sensitive sectors, including dairy, select agricultural products, sugar, fats and oils, arms and ammunition, gems and jewellery, and certain metals, remain excluded.

Bilateral trade between India and New Zealand has shown steady growth, with merchandise trade reaching USD 1.3 billion in 2024–25 and total trade in goods and services estimated at USD 2.4 billion in 2024.