India, New Zealand Set to Sign Free Trade Agreement on April 27, Doubling Trade to $5 Billion in Five Years

India and New Zealand Set to Sign Historic Free Trade Agreement

India and New Zealand are on the cusp of signing a landmark free trade agreement (FTA) on April 27, with the ambitious goal of boosting bilateral trade to $5 billion over the next five years. This target was set jointly in December 2025, despite the current goods trade remaining at just over $1 billion.

According to the New Zealand Ministry of Foreign Affairs and Trade, the total bilateral trade in goods and services was around $2.4 billion in the fiscal year 2025. Achieving the $5 billion target will require a significant acceleration in both goods and services trade, indicating a substantial increase in economic engagement between the two nations.

Historically, India has maintained a trade surplus with New Zealand, driven by stronger goods exports. In FY25, exports stood at $711.10 million, while imports from New Zealand totaled $587.13 million, resulting in a surplus of $123.97 million. India's key exports currently include pharmaceuticals, textiles, engineering goods, and refined petroleum products, while imports from New Zealand are led by wood and forestry products, wool, iron and steel, and agricultural items such as fruits.

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The FTA, agreed to in December 2025, aims to increase bilateral trade by improving market access on both sides. The deal will provide preferential access for about 95 percent of New Zealand's exports to India, with more than half becoming duty-free immediately and coverage rising over time.

The agreement includes significant tariff reductions across sectors such as horticulture, forestry, seafood, and industrial goods, alongside phased liberalisation in other categories. However, reflecting India's cautious stance, sensitive sectors such as dairy have been kept outside the agreement, in line with New Delhi's traditional approach of protecting sensitive sectors.

Key New Zealand export sectors expected to benefit from the FTA include horticulture (such as apples and kiwifruit), forestry, seafood, wool, meat, and a range of industrial goods, with tariffs either eliminated on entry or reduced in a phased manner. High duties on products like wine are also set to be lowered, improving competitiveness in the Indian market.

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For India, the agreement is expected to secure near full duty-free access for its exports to New Zealand, particularly benefiting sectors such as textiles, pharmaceuticals, engineering goods, and processed foods. Beyond tariffs, the FTA is also designed to boost services trade, investment flows, and sectoral access across key areas, signalling a broader push to deepen economic engagement beyond current merchandise trade levels.

With services, especially travel and education, already forming a major share of bilateral flows, this expansion is expected to play a crucial role in scaling up overall trade. With total trade currently at about $2.4 billion, reaching $5 billion within five years would mean more than doubling flows.