The ambitious target of becoming a Viksit Bharat by 2047 requires sustained efforts across multiple fronts. Trade remains central to this vision. Over the past few years, India has actively pursued free trade agreements (FTAs) across regions. These include agreements with Mauritius in Africa; the UAE and, recently, Oman in the Gulf; EFTA and the UK and EU in Europe; and Australia in the Oceania and Pacific region. The FTA with New Zealand further strengthens India’s engagement in Oceania and sets the stage for doubling bilateral trade within five years. The challenge now is making that aspiration real.
Bilateral merchandise trade grew by 49 per cent to $1.3 billion in 2024-25 but still falls short of its potential despite strong complementarities, with India accounting for just 1.84 per cent of New Zealand’s imports. The FTA addresses this gap by granting zero-duty access to 100 per cent of Indian exports from day one, eliminating tariffs of up to 10 per cent on sectors like textiles, leather, engineering, and footwear, and 5 per cent on pharmaceuticals, agriculture, electronics, and more — offering a major boost to labour-intensive clusters across India. At the same time, India has safeguarded sensitive sectors such as dairy and select agricultural products. Additional benefits include enhanced agricultural productivity through Centres of Excellence and faster customs clearance for express and perishable goods.
Services-led economies
India and New Zealand are both services-led economies, with services contributing about 49.9 per cent and 67.4 per cent of GDP respectively. While New Zealand runs a services trade surplus with India — largely driven by travel — its imports from India are diversified, spanning telecommunications, IT and business services. This positions Indian providers well to scale and move into higher-value segments.
Tourism, education, and the creative industries offer strong growth potential, combining India’s expanding creative economy with New Zealand’s global appeal. The agreement opens market access across 118 services sectors and eases mobility.
It removes caps on Indian students, allows 20 hours of work per week during study, extends post-study work opportunities, and introduces a Temporary Employment Entry visa for skilled professionals for up to three years. Together, these measures enable deeper engagement and long-term collaboration in services.
India’s trade agreement model with EFTA, which included a unique investment-linked provision, has been echoed in its agreement with New Zealand. This framework is expected to facilitate $20 billion in investment into India over 15 years, supported by a rebalancing clause to address any shortfall in commitments, ensuring steady inflows.
Beyond trade, this paves the way for deeper collaboration in manufacturing, infrastructure, innovation, and job creation. Combining India’s scale, execution strength, and digital infrastructure with New Zealand’s design, innovation, and governance capabilities, the partnership holds strong potential for co-investment, co-manufacturing, and co-innovation, extending into third markets across the Indo-Pacific and beyond.
The partnership’s true potential spans several high-value frontiers. Agritech and food processing represent the most natural area of complementarity. New Zealand’s expertise in precision agriculture, post-harvest technology, and food safety, combined with India’s scale and processing capacity, is a powerful combination.
Clean energy is another priority where both economies can genuinely co-invest; India’s renewable ambitions are vast, and New Zealand brings real innovation strengths. In digital technology — AI, cybersecurity, digital public infrastructure, and quantum computing — India’s population-scale platforms and New Zealand’s agile innovation ecosystem are natural complements.
Even in the near term, low-hanging fruit is clearly visible. Dairy equipment manufacturing, automotive, including electric vehicles and medical and scientific equipment are sectors where India’s cost competitiveness and scale align directly with New Zealand’s market demand and quality orientation. The onus is now on Indian industry to leverage this agreement to translate intent into tangible outcomes.
The writer is Director General, CII
Published on April 29, 2026