New Zealand’s Prime Minister Christopher Luxon announced on Tuesday that India and New Zealand are set to finalize a free trade agreement (FTA) within the next two months. The pact is expected to strengthen bilateral trade, particularly in agriculture, aerospace, and renewable energy.
The negotiations, resuming after a decade-long pause, gained momentum following a meeting between Prime Minister Narendra Modi and Luxon during the latter’s visit to India. Speaking at a business gathering, Luxon emphasized the importance of advancing the trade relationship, expressing confidence in signing the agreement with Modi within 60 days.
This development comes amid rising global trade tensions, notably following former U.S. President Donald Trump’s move to impose reciprocal tariffs on imports from multiple countries, including India. In response, India has been intensifying efforts to establish trade agreements with key partners such as the European Union and the United Kingdom.
According to India’s trade ministry, bilateral trade between India and New Zealand surged by over 30% year-on-year, reaching $1.2 billion in 2024. Commerce Minister Piyush Goyal highlighted the potential of the proposed FTA to significantly enhance cooperation in sectors such as critical minerals, pharmaceuticals, and tourism. He projected that trade between the two nations could grow tenfold within a decade.
“The huge amount of innovation coming out of New Zealand can reach the world through India,” Goyal said, as quoted by Reuters. He also underscored India’s manufacturing capabilities, stating that competitive production for global markets could elevate the partnership to new heights.
Despite the optimistic outlook, analysts caution that negotiations may face hurdles over tariff differences, particularly on dairy products. India has resisted lowering agricultural tariffs, which range from 30% to 60%, citing the need to protect millions of small farmers.
Goyal reaffirmed that discussions would proceed with mutual respect, stating, “No free trade agreement is ever negotiated with a gun on anybody’s head.”
Luxon expressed New Zealand’s interest in expanding cooperation beyond trade, particularly in aerospace and renewable energy, signaling a broader strategic partnership between the two nations.
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