Even as the global trade sector has experienced an Annus Horribilis (horrible year), 2025 has been India’s year of trade acceleration. In July, New Delhi signed the India-UK Comprehensive Economic and Trade Agreement (CETA); in December, it sealed a Comprehensive Economic Partnership Agreement (CEPA) with Oman; and now, in a record nine months, India and New Zealand have concluded their free‑trade agreement (FTA), pending legal review and formal ratification.
Alongside early-harvest and launch tracks with the EU, Chile and the Eurasian Economic Union (EAEU), plus a revived Early Progress Trade Agreement (EPTA) with Canada, a clear picture of India’s new trade architecture is emerging. New Delhi is building high-quality, rules-based bilateral arrangements, phased where necessary, with partners that complement, rather than compete with, India’s strengths and priorities.
A pragmatic partnership with New Zealand
On one level, the India-New Zealand FTA is a straightforward extension of this — a pragmatic deal between two economies whose bilateral trade, while steadily growing, currently stands at a minuscule $2.4 billion, thus leaving plenty of potential to unlock. On the other hand, it tells us something broader about where India is headed and how it intends to build prosperity, with people, not just products, at the center.
For decades, commentators have reduced India’s trade strategy to a binary: open the gates and risk import surges or stay cautious and forgo the scale and opportunity that the global economic order offers. That false choice collapsed when India refused to join the Regional Comprehensive Economic Partnership (RCEP), and instead rewired its negotiating posture around complementarity.
This shift in strategy has been made possible by a wave of internal reforms that reached a new peak in 2025. Major changes, most notably the rollout of Goods and Services Tax (GST) 2.0 this year, alongside other key reforms under Prime Minister Narendra Modi’s tenure, including the simplification of foreign direct investment (FDI) norms, expanded production-linked incentive (PLI) schemes, digital governance improvements and the implementation of the Four Labor Codes, have all contributed to investor confidence.
It is this transformed, future-ready India that now approaches trade negotiations from a position of strength. New Zealand fits that map. It is a high-income, rules-based economy that doesn’t compete head-to-head with India in mass manufacturing; instead, it welcomes Indian services, talent and consumer goods under transparent and fair terms.
Tariff liberalization, sectoral protections and prioritizing people
Those terms are striking. New Zealand has granted zero-duty access to all Indian exports. Not “most,” not “nearly all” — all. For India’s labor-intensive sectors — textiles and apparel, leather and footwear, gems and jewelry, marine products, toys, handicrafts — this is a once-in-a-generation opening; the kind you build upon to broaden value chains. Small exporters who dreaded duties and nickel-and-diming at the border can now quote with confidence, contract with certainty, ship with speed and expand their operations thanks to cash flows freed from tariffs.
India, for its part, has offered tariff liberalization on about 70% of tariff lines, covering 95% of bilateral trade value. This has been done through a calibrated blend of immediate cuts (sheep meat, wool, coal, most forestry and wood), phased reductions (oils, select machinery, wine) and carefully managed tariff-rate quotas for a handful of sensitive horticulture lines (honey, apples, kiwifruit).
But these concessions have been meticulously crafted to ensure that India’s most sensitive sectors remain protected. Dairy is the most prominent exclusion; it is entirely ring-fenced. The shield extends further: animal products (other than sheep meat), key vegetables, sugar, some oils and strategic nonagricultural sectors such as gems and jewelry, copper and aluminum are all excluded from tariff concessions.
This is an unmistakable signal that India will write modern, liberal trade rules, but it will do so while securing farmer incomes, Micro, Small and Medium Enterprises (MSME) resilience, and food security. This is not protectionism; it is democratic prioritization for a country where agriculture is a livelihood for millions and not just another sector to be casually bartered away.
The agreement’s spine, however, is not goods but rather services and mobility. New Zealand’s services commitments are its most ambitious to date, granting Indian firms broad access across IT and IT-enabled services, professional and business services, education, finance, tourism and construction.
Crucially, the agreement includes a Most-Favored-Nation (MFN) clause: if New Zealand offers better terms to another partner in the future, India automatically receives the same benefits. For India’s already globally competitive services sector, this means new opportunities to establish a presence in Oceania, recruit local talent and scale operations in a stable, rules-based environment.
But the real innovation is the Temporary Employment Entry Visa, a pathway for up to 5,000 Indian professionals at any given time to live and work in New Zealand for up to three years, targeted at skill shortages (IT, engineering, healthcare, education, construction) and specialty roles (yoga instructors, Indian chefs, music teachers). Paired with the fact that the agreement removes numerical caps on Indian students, guarantees 20 hours/week of work during study, and extends post-study work to 3 years for science, technology, engineering and mathematics graduates and 4 years for doctorates, as well as a 1,000-place Working Holiday scheme, and you’ve stitched the “living bridge” of a 300,000-strong Indian diaspora into the economic fabric.
Critics — some inside New Zealand’s politics — have argued that these mobility channels “give too much away.” That is an entirely incorrect framing, though. Global trade today is not a container-ship contest; it is a talent distribution contest. When shortages hobble hospitals, classrooms and infrastructure sites, partnering with a country that supplies trained professionals under transparent, targeted and time-bound rules is not a concession for New Zealand; it is capacity building.
For India, talent mobility is not brain drain but instead brain circulation. Earnings, networks and know-how will eventually come home, while remittances in the interim can help stabilize families. Far from “giving away” jobs, this agreement allows New Zealand to fill gaps that its own workforce cannot meet. At the same time, the pathways it opens enable Indian professionals to gain global experience and return with skills that strengthen India’s economy — further enhancing India’s international reputation as a source of reliable, high-quality talent.
Implementation and future prospects
The FTA also does the dull yet decisive things right. Customs modernization commits India to 48-hour release windows at the border. That single clause can save exporters more money than many tariff cuts, because time itself can act as a shadow tariff. The pact hardwires cooperation on standards and sanitary rules and creates Agri-Technology Action Plans for kiwifruit, apples and honey. These plans mean both countries will collaborate on sharing best practices — needless to say, India will be the beneficiary.
Additionally, the agreement requires New Zealand to update its Geographical Indications (GI) framework, thereby granting India the same rights as the EU to register wines, spirits and other goods, ensuring full parity in GI protection. Regulatory access for pharmaceuticals, medical devices and organic products has also been streamlined, reducing duplication and accelerating approvals.
There is also long-term capital behind this agreement: New Zealand has pledged $ 20 billion in investment in India over the next 15 years. The scale of this commitment signals confidence in India’s economic trajectory and its potential as a global growth engine. The agreement also includes a rebalancing clause that allows India to take remedial measures if the delivery of investments falls short of its commitments. India has learned that FTAs without real capital and capability often disappoint; this one addresses both, the kind of long-term backbone that many earlier agreements lacked.
Of course, no agreement is without its challenges. The FTA will require careful implementation and timely ratification, efficient visa processing, and real delivery on its various Agri-tech and customs commitments.
But from an Indian perspective, the fundamentals are solid: the deal is structured to maximize opportunity while safeguarding core interests. It is precisely the template India should look to replicate — combining asymmetric access to goods that favors MSMEs with ambitious services and talent mobility. It is bilateralism that looks beyond tariffs, focusing instead on people, productivity and a true sense of partnership.
India’s new trade architecture is not merely about opening doors but about building bridges among economies, nations and, above all, people. In that vein, the India-New Zealand FTA is a blueprint for how the next decade of Indian trade can and should be built.
[Kaitlyn Diana edited this piece.]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.