India and New Zealand Resume Free Trade Agreement Negotiations to Strengthen Economic Ties

India and New Zealand have resumed Free Trade Agreement (FTA) negotiations to strengthen economic ties and improve market access. The decision was announced during New Zealand Prime Minister Christopher Luxon’s visit to India from March 16 to 20, 2025, following discussions between India’s Commerce Minister Piyush Goyal and New Zealand’s Trade Minister Todd McClay. The FTA aims to enhance supply chain integration and create new business opportunities, with bilateral trade already exceeding $1 billion between April and January 2025.

Previous negotiations under the Comprehensive Economic Cooperation Agreement (CECA) stalled in 2015 due to disagreements on tariffs and market access, particularly New Zealand’s push for dairy access and India’s demand for better opportunities for its professionals. India has maintained high tariffs on dairy, meat, and wine imports, which has been a major sticking point. India primarily exports pharmaceuticals, textiles, and IT services to New Zealand, while New Zealand exports dairy products, wool, and fruits.

Both nations now aim to reduce tariffs, ease investment restrictions, and create a balanced trade framework. As India continues to expand trade partnerships with Japan, South Korea, Australia, and the European Union, the resumed talks with New Zealand are expected to unlock new economic opportunities and strengthen bilateral trade relations.

India and New Zealand Resume Free Trade Agreement Negotiations to Strengthen Economic Ties

India and New Zealand have decided to restart talks for a Free Trade Agreement (FTA) to boost their economic relationship, improve market access, and strengthen supply chain connections. This decision was announced after a meeting between India’s Commerce and Industry Minister, Piyush Goyal, and New Zealand’s Minister for Trade and Investment, Todd McClay, on March 16, 2025. Both countries expressed their commitment to creating a trade deal that benefits both sides.

Piyush Goyal shared the news on social media, emphasizing the importance of this move in creating new trade opportunities. He noted that trade between India and New Zealand has been growing steadily, with bilateral trade surpassing $1 billion between April 2024 and January 2025. The FTA is expected to unlock new business opportunities and benefit consumers in both countries.

India and New Zealand initially began discussions on a Comprehensive Economic Cooperation Agreement (CECA) in 2010, but negotiations were paused in 2015 after nine rounds of talks. With the restart of FTA discussions, both nations aim to build a stronger economic partnership and support long-term growth.

The decision to resume FTA talks was also highlighted during New Zealand Prime Minister Christopher Luxon’s visit to India from March 16 to 20, 2025. This move aligns with India’s strategy to expand its trade partnerships and reduce reliance on traditional markets, particularly amid global economic uncertainties. Goyal stressed that the negotiations aim to establish balanced trade policies that will benefit both countries.

Trade Challenges and Past Negotiations

Previous negotiations between India and New Zealand faced several challenges. A key issue was New Zealand’s request for greater access to India’s dairy market, which India resisted to protect its farmers. India also opposed lowering tariffs on dairy, meat, and wine imports, while New Zealand was hesitant to provide better opportunities for Indian professionals seeking jobs in the country.

Experts believe that external factors, such as pressure from the U.S. to open India’s agriculture and dairy sectors, could influence the negotiations. With India’s average tariff rate at 17.8% and New Zealand’s at 2.3%, finding a middle ground will be crucial.

Current Trade Situation

Trade between India and New Zealand remains relatively low compared to India’s trade with other countries. In the 2023-24 financial year, bilateral trade was recorded at $1.54 billion. India exported goods worth $538.3 million to New Zealand, while New Zealand’s exports to India totaled $335.1 million.

New Zealand primarily exports dairy products, wool, and fruits to India, while India supplies pharmaceuticals, textiles, and IT services to New Zealand. As negotiations resume, both countries aim to expand these trade categories. New Zealand is particularly interested in strengthening its presence in India’s food processing and technology sectors, while India seeks better market access for its agricultural products and IT services.

The Road Ahead

Despite past challenges, both nations are committed to finding common ground. Negotiators will likely focus on reducing tariffs, easing investment restrictions, and establishing a framework for stronger economic cooperation.

India has signed FTAs with countries such as Japan, South Korea, and Australia in recent years, which have helped boost its trade volumes and global partnerships. Alongside the New Zealand deal, India is also negotiating FTAs with Oman, ASEAN, and the European Union.

Looking ahead, India has pushed for early approval of its grape exports to New Zealand and the recognition of pest control measures at its treatment facilities in Delhi and Lucknow. These steps would further facilitate smoother trade relations between the two countries.

By restarting FTA negotiations, India and New Zealand aim to unlock the full potential of their trade relationship, creating new economic opportunities and strengthening their positions in the global market.