India and New Zealand have signed a significant Free Trade Agreement (FTA) that eliminates tariffs on all of India’s exports to New Zealand and reduces or removes tariffs on 95% of New Zealand’s imports from India. The agreement, finalized in just nine months since its launch in March 2025, signifies a new era in the economic ties between the two nations. Under this deal, India will have duty-free access to all tariff lines, a substantial reduction from the current 10% tariffs on various Indian exports like textiles, apparel, leather products, ceramics, carpets, automobiles, and auto components.
The FTA also includes a provision where New Zealand will invest $20 billion in India over 15 years, mirroring the European Free Trade Association’s $100 billion investment commitment in their FTA with India. Additionally, the agreement encompasses clauses related to the mobility of professionals and students. New Zealand has agreed to a student mobility annex and post-study work visas for Indian students, allowing them to work part-time while studying and extending post-study work opportunities.
Moreover, the FTA allocates 5,000 visas for skilled Indian workers to stay up to three years in sectors of interest to India, such as AYUSH practitioners, yoga instructors, chefs, music teachers, IT, engineering, healthcare, education, and construction. The Working Holiday Visa program within the agreement permits 1,000 young Indians yearly to have multiple entries into New Zealand for a year. Notably, certain items like dairy products and farm goods have been excluded from the FTA.
The FTA between India and New Zealand is anticipated to boost India’s leather industry, aiming for a $50 billion growth by 2030 through a shift to high-value manufacturing. The elimination of duties on all Indian exports and the reduction of tariffs on leather and footwear to zero will provide Indian exporters a competitive edge. Furthermore, the pharmaceutical and medical devices sectors will benefit from quicker regulatory access under the FTA, streamlining compliance and product approvals for Indian manufacturers.
