India and New Zealand on Monday signed a free-trade agreement to deepen economic ties and expand market access, as both countries navigate mounting global trade disruptions.

The deal comes as New Delhi moves to diversify export markets to offset the impact of steep tariffs imposed by the United States and instability in shipping and energy routes due to the Iran war. For New Zealand, the agreement is part of a broader push to reduce reliance on China, its largest trading partner.

The agreement was signed in New Delhi by India’s Commerce and Industry Minister Piyush Goyal and visiting New Zealand Trade and Investment Minister Todd McClay.

Negotiated over nine months and agreed in December, the deal will cut or eliminate tariffs on 95 per cent of New Zealand’s exports to India, while making all Indian exports to New Zealand duty free. Wellington has also committed to invest US$20 billion in India over the next 15 years.

McClay said the deal marked a “once-in-a-generation” opportunity to deepen economic ties at a time of rising global trade tensions and uncertainty. India is New Zealand’s 12th-largest export market, with bilateral trade valued at US$2.15 billion in the year through June 2025, according to official data.

“This agreement is also being concluded at a time of heightened global and regional uncertainty. In this context, strong, reliable partnerships matter more than ever before,” McClay said.