How do experts view the New Zealand-India FTA?
As India signs the “mother of all deals” with the European Union and an interim trade deal with the United States, four experts weigh in on the significance of the New Zealand-India FTA announced just before Christmas.
In February, the High Commision of India held an event in Wellington titled India-New Zealand FTA: Unlocking New Zealand's Pathways for Business
Dhruva Jaishankar
Executive director of the Observer Research Foundation America, and non-resident fellow, Asia New Zealand Foundation, Washington DC
For both India and New Zealand, their trade agreement represents, more than anything else, a risk mitigation strategy.
Dhruva Jaishankar
Dhruva Jaishankar
The conclusion in December 2025 of an India-New Zealand free trade agreement is part of a new trend in India's approach to international trade. Since 2021, India has concluded at least eight trade agreements after concluding none over the previous decade. There are important reasons for this sudden turnaround related to India's trade policy, which are tied to its overall economic prospects, desire for market access, the breakdown of multilateral negotiations, and concerns about supply chain security.
India has a reputation for being a protectionist economy. This is true insofar as India has among the highest tariffs on goods imports of any major economy under most favored nation (MFN). But as a consumer- and services-driven economy, India has also been among the largest net goods importers, after the United States and United Kingdom.
Foreign manufacturers enjoy large market shares in several sectors, whether Japanese auto companies or Korean electronics manufacturers, and India's relatively high tariffs overshadow a greater openness to foreign businesses along many other indicators relative to other developing and even developed economies. Nonetheless, India's attempts at concluding free trade agreements between 2002 and 2015 met with disappointing results.
Talks with the European Union stalled in 2013. Agreements with Japan, South Korea, and the Association of Southeast Asian Nations (ASEAN) were negotiated and concluded between 2009 and 2014 but had only a limited impact on bilateral trade or India's exports. Indeed, these experiences diminished the public and business appetite in India for trade agreements.
Indian Prime Minister Narendra Modi attending the 2017 Regional Comprehensive Economic Partnership (RCEP) Leaders’ Meeting, in Manila. India withdrew from the negotiations in 2019.
A set of inflection points occurred after 2019, when India withdrew from Regional Comprehensive Economic Partnership (RCEP) negotiations. Contrary to much commentary at the time, India’s withdrawal was primarily driven by concerns about lax rules of origin and Chinese overcapacity. This was followed by the Covid-19 pandemic, which exposed supply chain vulnerabilities in health and other sectors, as well as clashes between India and China and, shortly after, the Russian invasion of Ukraine. Together, these events compelled India to take concrete steps towards an industrial and manufacturing policy, which included offering large subsidies in key sectors and embarking upon steps to facilitate investment and seek better market access for its exports.
Consequently, after 2021, India concluded trade agreements with Mauritius, the United Arab Emirates, Australia, the European Free Trade Association (EFTA, consisting of Norway, Switzerland, Iceland, and Liechtenstein), Oman, the United Kingdom, New Zealand, and now the European Union. Last week, US President Donald Trump announced a trade agreement with India, slashing US tariffs on Indian imports to 18 percent. The common thread for many of these new commercial partners is that they are deemed “complementary”, being developing economies that do not compete directly with India on wages and employment.
For both India and New Zealand, their trade agreement represents, more than anything else, a risk mitigation strategy. Concerned about over-dependence on China and the United States as both producers and consumers — and the failure of multilateral trade negotiations at the World Trade Organization (WTO) — New Delhi and Wellington have opted to bet on each other and bring a modicum of certainty to an uncertain world.
Tracey Epps
International lawyer and trade policy consultant, Wellington
Since 2021, however, India has adopted a new approach, moving away from its traditional ambivalence towards trade agreements...
Tracey Epps
Tracey Epps
Over 70 percent of the world’s trade takes place under WTO rules. Yet over the past year the global trading system has experienced its most severe disruption in 80 years, with multilateral rules weakened by geopolitical tensions and unilateral actions. In response to such upheaval, the WTO director-general, Ngozi Okonjo-Iweala, has said that governments should “strengthen domestic and regional capacities” to build resilience. From New Zealand’s perspective, the importance of building resilience through bilateral and regional trade relationships has long been recognised.
In this context, the recently concluded FTA represents a significant new piece in the mosaic of arrangements that the government has concluded to build resilience by ensuring market access for our exporters within a rules-based framework. As Stephen Jacobi has written, “the FTA was a once-in-a-decade opportunity in a highly contested global environment and needs to be seen in that context. The Indian Government clearly wanted an agreement for broader reasons beyond the size of the New Zealand market.”
Prior to 2021, India — one of the world’s largest economies and a strategic priority for New Zealand — had signed only a limited number of regional and bilateral trade deals, and these were largely with partners in Asia. Since 2021, however, India has adopted a new approach, moving away from its traditional ambivalence towards trade agreements to an approach that reflects its evolving role on the world stage and focuses on diversification and supply chain resilience.
The FTA is not as comprehensive in terms of market access as some of New Zealand’s other FTAs— namely the notable exclusion of core dairy products — but it provides significantly improved market access for other sectors and a commitment to a rules-based framework by one of the world’s largest economies that is critical in the current global environment, along with a platform for continued engagement within that framework.
Felicity Roxburgh
New Zealand International Business Forum executive director, Auckland
The bottom line is that the FTA marks an important step forward for many exporters, but the real work starts now.
Felicity Roxburgh
Felicity Roxburgh
India is one of the world’s fastest growing economies and the India–NZ FTA is a vital step-up for many New Zealand businesses. From my vantage point at the New Zealand International Business Forum, the agreement brings welcome improved outcomes for important sectors, including kiwifruit, lamb, horticulture, forestry and wine. These outcomes will be commercially meaningful for many of our members and will help level the playing field for New Zealand exporters relative to India’s other trading partners.
It is also great to see a chapter supporting Māori business linkages across culture, trade, traditional knowledge and rongoā Māori (traditional medicine), recognising India as an important market for key Māori economic sectors and reflecting an inclusive approach to trade.
Felicity: "...India has longstanding sensitivities around its domestic dairy market..."
We knew from the start that India has longstanding sensitivities around its domestic dairy market, and the deal does not deliver comparable improvements for the dairy sector. This is disappointing for New Zealand given that dairy is our largest goods export and India represents one of the world’s most significant emerging consumer dairy markets. We are ready to work with the government on a proactive, dairy-specific strategy to address rising non-tariff barriers and explore further tariff reductions, with the goal of improving market optionality for the dairy sector in an increasingly volatile global trade environment.
The bottom line is that the FTA marks an important step forward for many exporters, but the real work starts now. The conclusion of negotiations marks a beginning, not an end. We look forward to seeing the agreement signed and brought into force quickly, so New Zealand companies can start to benefit from tariff reductions. We also need to ensure exporters are well supported to do business in India, which is a complex market. Government and business will need to work together in deepening trade, investment and innovation partnerships.
Raf Manji
Principal research fellow, Institute for Indo-Pacific Affairs, Christchurch
"...this agreement is not just about trade. It is also about building a long-term strategic partnership."
Raf Manji
Raf Manji
As one would expect, the headline was all about tariff elimination and reduction, particularly in the commodity sector. New quota access for apples and kiwifruit is also a welcome addition, alongside duty-free importation of New Zealand ingredients for export production, including dairy. With wine and manuka honey also seeing tariff reductions, this agreement is a major step forward for the trade relationship.
But this agreement is not just about trade. It is also about building a long-term strategic partnership. The chapter on investment promotion aims to deliver private sector investment into India of US$20 billion by 2040, facilitated by a bespoke “New Zealand Investment Desk”.
Raf: "New quota access for apples and kiwifruit is also a welcome addition..."
The chapter on economic cooperation and technical assistance includes working groups on agricultural productivity, fisheries and aquaculture, tourism, sports and medicine. This collaborative approach to developing key sectors is an important aspect of this deal, which should be seen as building an enduring partnership in trade, investment and economic security.
To enable and fulfil this ambitious vision, New Zealand will need to deploy more resources to India, with a broad geographic spread. Like the China relationship, it will require commitment and people on the ground to build the relationships necessary to foster trust and develop reliable channels to India’s enormous market. Our cricketers are leading the way and now is the time for others to follow.
The Foundation's Asia in Focus initiative publishes expert insights and analysis on issues across Asia, as well as New Zealand’s evolving relationship with the region.
