India, New Zealand Economic Ties Deepen with FTA Revival and Strategic Cooperations

Posted by Written by Archana Rao Reading Time: 4 minutes

India and New Zealand have revived their free trade agreement (FTA) negotiations after more than a decade, marking a major leap in their economic partnership. The renewed talks come during New Zealand Prime Minister Christopher Luxon’s five-day visit to India, where he held bilateral discussions with Indian Prime Minister Narendra Modi in New Delhi.

Both sides have agreed to commence the first round of negotiations in April 2025.

On March 17, 2025, Indian Prime Minister, Narendra Modi, and New Zealand Prime Minister Christopher Luxon convened for a high-level bilateral meeting, marking a significant advancement in India-New Zealand relations. The two leaders also announced the launch of negotiations for a Free Trade Agreement (FTA). The proposed agreement, estimated to commence in April 2025, aims to establish a comprehensive and balanced framework to address market challenges, promote sustainable growth, and deepen economic integration between the two nations.

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Luxon described the announcement as a “major breakthrough,” underlining India’s pivotal role in New Zealand’s trade strategy. He highlighted that access to the Indian market would be instrumental in helping New Zealand achieve its target of doubling its export value over the next ten years.

Expanding bilateral cooperation beyond trade

India and New Zealand intend to deepen collaboration across multiple sectors beyond traditional trade, including defence, security, sports, environment, digital payments, and education. With Luxon’s latest visit to India, both nations signed a series of bilateral agreements.

  1. Joint statement on India–New Zealand partnership.
  2. Memorandum of Understanding (MoU) on defence cooperation between the Indian Ministry of Defence and the New Zealand Ministry of Defence.
  3. Authorized Economic Operators Mutual Recognition Agreement (AEO-MRA) between India’s Central Board of Indirect Taxes and Customs (CBIC) and the New Zealand Customs Service.
  4. Memorandum of Cooperation (MoC) on horticulture between India’s Ministry of Agriculture and New Zealand’s Ministry for Primary Industries.
  5. Letter of intent on forestry cooperation.
  6. Education cooperation agreement between the respective ministries of education.
  7. MoC in Sports between India’s Ministry of Youth Affairs & Sports and Sport New Zealand.

Relaunch of India-New Zealand FTA negotiations

India and New Zealand have officially relaunched negotiations for a FTA after a decade, marking a major milestone in strengthening their bilateral economic relationship. The proposed FTA aims to establish a comprehensive, balanced, and mutually beneficial framework that facilitates enhanced trade flows, deeper investment linkages, and broader economic cooperation between the two countries. It reflects a shared interest in promoting inclusive and sustainable economic growth.

Key focus areas of the FTA negotiations include:

  • Reduction of tariffs and non-tariff barriers
  • Enhanced market access for goods and services
  • Investment facilitation and protection
  • Digital trade and e-commerce cooperation
  • Customs procedures and trade facilitation
  • Intellectual property rights and regulatory harmonization

The FTA will also explore early cooperation in digital payments and financial technology, supporting innovation-driven trade ecosystems.

Additionally, the AEO-MRA signed between Indian and New Zealand customs authorities, is expected to complement the FTA by simplifying customs processes and facilitating the seamless movement of trusted traders.

The AEO-MRA signed between India’s CBIC and the New Zealand Customs Service is a bilateral initiative aimed at strengthening trade facilitation and supply chain security between the two countries.

This arrangement enables both nations to recognize each other’s Authorized Economic Operators (AEOs)—businesses that meet defined standards of compliance and security—as trusted, low-risk partners in international trade. Through this mutual recognition, AEO-certified businesses in India and New Zealand will benefit from simplified customs procedures, expedited cargo clearance, reduced inspections, and priority treatment at ports. The initiative is designed to increase efficiency, reduce costs and delays, and enhance predictability in cross-border trade.

As per the official announcement, both countries have appointed senior-level negotiators and expressed intent to fast-track the negotiation process, with a view to concluding an agreement that supports greater two-way trade, encourages investments in key sectors such as agriculture, education, tourism, horticulture, and green technologies, and creates new opportunities for businesses and professionals.

Other key announcements

  • Launch of negotiations on a mobility arrangement for professionals and skilled workers
  • New Zealand joins the Indo-Pacific Oceans’ Initiative (IPOI)
  • New Zealand becomes a member of the Coalition for Disaster Resilient Infrastructure (CDRI)

Advancing strategic partnership and trade cooperation

During their bilateral discussions, Modi and Luxon agreed to strengthen the strategic partnership between the two countries. They also agreed to expand cooperation across a wide range of sectors, including trade and investment, defence and security, education and research, science and technology, agri-tech and space, and mobility and sports

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They acknowledged the robust economic ties between India and New Zealand and emphasized the need to further enhance trade and investment relations to foster inclusive and sustainable economic growth.

READ: India-New Zealand Bilateral Relations: A Strategic Partnership

India-New Zealand Trade Overview (Value in US$ Million)

Trade activities

FY2019–20

FY2020–21

FY2021–22

FY2022–23

FY2023–24

FY2024–25* (Apr–Dec)

India’s exports to New Zealand

378.55

486.25

487.60

547.84

538.33

494.44

India’s imports from New Zealand

521.83

381.53

374.84

477.74

335.07

463.07

Total trade

900.38

867.78

862.44

1,025.58

873.40

957.51

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

*The import-export data for FY2024-25 are available from April to December 2024. The complete data for the financial year will be available after March 31, 2025.

Enhancing strategic and maritime cooperation

India and New Zealand are elevating their defence partnership with the signing of a MoU on defence cooperation. In a joint statement, both Prime Ministers welcomed the agreement, emphasizing its role in reinforcing bilateral defence ties and establishing a framework for regular defence engagement.

Maritime security remains a central element of this cooperation. The two leaders underscored the importance of securing sea lanes of communication and agreed on the need for continued dialogue to enhance maritime safety and cooperation across the Indo-Pacific region.

The defence MoU aims to institutionalize structured sectoral dialogue, foster cooperation in maritime safety, and support the protection of vital sea routes.

Conclusion

The revival of the India-New Zealand FTA negotiation marks a pivotal moment in the evolving bilateral partnership, underscoring both nations’ shared vision for a more inclusive, resilient, and interconnected economic future.  As negotiations move forward, the comprehensive framework of cooperation—ranging from trade and investment to defence, education, and digital innovation—signals a deepening strategic alignment between the two countries.

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