India and New Zealand are set to sign a free trade agreement (FTA) today that will eliminate tariffs on all Indian exports to New Zealand, while either removing or significantly reducing tariffs on 95 per cent of imports from New Zealand.
Talks for the FTA began in March last year, after a hiatus of ten years and with the goal of doubling bilateral trade to $5 billion over the next five years.
On microblogging platform X, New Zealand’s Prime Minister Christopher Luxon described the pact as a ‘once-in-a-generation agreement’ that offers New Zealand exporters unprecedented access to 1.4 billion people and an economy on track to become the world’s third-largest.
India and New Zealand will sign an FTA today that will remove tariffs on all of the former’s exports to the latter, and either sharply reduce or remove tariffs on 95 per cent of imports from the latter.
Talks began in March 2025, after a hiatus of ten years.
India feels the FTA will open new export opportunities for traditional and MSME-driven sectors, particularly in leather, handloom and handicrafts.
“Just over a year ago, I met with Prime Minister Modi in India. We agreed then, that we would launch negotiations on a free trade agreement. For decades, many people said it could not be done. But tonight, that deal gets signed,” Luxon posted on X yesterday.
“It means more jobs on farms and orchards, it means more money coming into local communities, and it means more opportunities for your family to get ahead,” he said.
The announcement was confirmed by Indian Commerce and Industry Minister Piyush Goyal, during his visit to Agra with New Zealand’s Minister for Trade and Investment, Todd McClay.
Goyal said the FTA will open new export opportunities for traditional and micro, small and medium enterprises (MSME)-driven sectors, particularly in leather, handloom and handicrafts.
“We will get new opportunities for our Agra leather business and Uttar Pradesh handloom and handicrafts—to our one district one product—to our carpenters who make the goods to the hand carvers and many more opportunities,” he was quoted as saying by Indian media outlets.
India exports various clothing items to New Zealand, which include apparel, home textiles, and raw materials like cotton and vegetable fibres.
Indian textile exporters can benefit from the FTA as New Zealand currently has a zero per cent tariff only on Indian products used in its final production. Indian finished goods manufacturers could benefit greatly from reduced tariffs on Indian value-added goods.
The FTA holds promising potential for boosting India’s textile exports, particularly in cotton and synthetic fibre-based apparel. Products like knitted cotton T-shirts, babies’ garments, and women’s dresses stand to benefit greatly from reduced tariffs, enhancing India’s competitive edge in the global market.
Fibre2Fashion News Desk (DS)