India and New Zealand finalise FTA with $20 billion investment pledge

NO DUTY CONCESSIONS ON DAIRY, VEGETABLES, SUGAR, COPPER, ALUMINIUM

- OUR CORRESPONDENT

India and New Zealand have concluded negotiations on a wide-ranging free trade agreement that is set to reshape bilateral economic ties by expanding market access, easing the movement of skilled professionals and anchoring a foreign direct investment commitment of $20 billion over the next fifteen years. The pact, which both governments expect to sign and bring into force within seven to eight months, is projected to double trade in goods and services to $5 billion within five years and introduce significant tariff liberalisation while protecting politically sensitive sectors.

Prime Minister Narendra Modi and New Zealand Prime Minister Christopher Luxon announced the completion of talks following a phone conversation on Monday. Negotiations began during Luxon's visit to India in March 2025 and were wrapped up within nine months. Officials said the rapid conclusion reflected the shared intent to expand economic cooperation and deliver new opportunities for businesses, farmers, students and young professionals in both countries.

A major component of the agreement is Wellington's pledge to facilitate investments worth $20 billion into India over fifteen years, in line with the model India adopted in its recent pact with the European Free Trade Association. According to the commerce ministry, these funds will support manufacturing, infrastructure, services and innovation under the Make in India programme. Commerce and Industry Minister Piyush Goyal said the investment commitment is backed by a rebalancing mechanism that allows suspension of benefits if targets are not met. He noted that only FDI is included in the commitment and not foreign portfolio investment, adding that long-term capital will aid job creation and domestic production. For New Zealand, which has historically invested modestly in India, the commitment of roughly Rs 1.80 lakh crore marks a substantial scale-up.