India, New Zealand Announce Free Trade Agreement; NZ will Invest $20 Bn, Offers Work Visas For Skilled Workers

New Zealand and India announced on Monday that they have reached a free trade agreement (FTA). Praising the deal, Prime Minister Narendra Modi said, "My friend PM Christopher Luxon and I had a very good conversation a short while ago following the conclusion of the landmark India-New Zealand Free Trade Agreement."

New Zealand Prime Minister Christopher Luxon also welcomed the agreement saying, "The gains are wide-ranging and significant. India is the world's most populous country and is the fastest-growing big economy, and that creates opportunities for jobs for Kiwis, exports and growth."

Trade Minister Todd McClay added that the agreement "will deliver thousands of jobs and billions in additional exports" and said it puts New Zealand on equal or better footing compared to other countries trading with India.

Investment Commitments

India will receive 20 billion US dollars in investment from New Zealand over the next 15 years according to the agreement. This long-term commitment is expected to bolster economic ties and aid growth in key industries.

Services and Mobility

The pact places strong emphasis on services and the movement of professionals. India has secured access to the New Zealand market across 118 service sectors and sub-sectors. In addition, India will receive Most Favoured Nation treatment in 139 service areas, meaning Indian professionals and service providers will enjoy the same advantages as those from other countries with which New Zealand has trade agreements.

This opens up opportunities for Indian workers in technology, education, healthcare, and other service industries.

Healthcare and Traditional Medicine

For the first time, New Zealand has signed an annex dedicated to health and traditional medicine services. This addition will make it easier to trade in health-related fields and traditional medicine practices, creating new avenues for ties between the two countries.

Visas for Skilled Workers and Holidaymakers

According to Reuters, as per the pact, New Zealand will provide 1,667 temporary work visas every year to Indians, particularly focused on areas where the country faces shortages of skilled workers. These include doctors, nurses, teachers, technology professionals, and engineers.

In addition, another 1,000 places will be offered annually under New Zealand's working holiday visa programme. This matches the terms of Australia's free trade agreement with India.

The pact will remove or cut tariffs on 95 per cent of New Zealand's exports to India. More than half of those products will become duty-free immediately once the pact begins. The New Zealand government said this will improve access to India's rapidly expanding middle class, giving exporters new opportunities.

Timeline and Political Opposition

The two countries are expected to ink the agreement formally in the first half of 2026. The deal also fulfils a 2022 election promise from New Zealand's governing National Party, which pledged to finalise a free trade agreement with India during its first term in office.
However, parliamentary approval is not guaranteed.

New Zealand First, which is part of the coalition government and holds eight of the 123 seats in parliament, has announced it will vote against the deal. Party leader Winston Peters said the agreement "gives too much away, especially on immigration, and does not get enough in return for New Zealanders, including on dairy."

Current Trade Between the Two Countries

The two-way trade between New Zealand and India totalled 3.14 billion New Zealand dollars in 2024. It is dominated by pharmaceuticals exported from India and forestry and agricultural products imported from New Zealand, including wool, logs, and apples.