India, New Zealand set to ink FTA with zero tariffs, $20 billion investment plan

India and New Zealand are set to sign a long-awaited Free Trade Agreement (FTA) on Monday, in a move that signals New Delhi’s accelerating push to deepen trade ties with developed economies while reshaping its global economic footprint.

The proposed pact is expected to grant 100 per cent duty-free access to 8,284 Indian export items, alongside a projected $20 billion investment pipeline and a dedicated annual quota of 5,000 visas for Indian professionals, according to the Ministry of Commerce and Industry’s official factsheet published in December 2025.

Zero-tariff access across key sectors

At the core of the agreement is full tariff elimination by New Zealand on a wide range of Indian exports, including textiles, pharmaceuticals, engineering goods and select agricultural products.

For India, the deal opens up a relatively under-penetrated but high-income market, offering exporters improved price competitiveness and a chance to diversify beyond traditional destinations such as the US and Europe.

$20 billion investment pipeline

Beyond trade in goods, the FTA is expected to anchor a $20 billion investment commitment, targeting sectors such as renewable energy, food processing, logistics and advanced manufacturing.

The investment component aligns with India’s broader strategy to attract global capital and integrate more deeply into diversified supply chains, as companies look to reduce dependence on concentrated manufacturing hubs.

Industry executives say the deal could also facilitate technology transfer and support India’s ambitions to scale up value-added exports.

Mobility boost with 5,000 visas

In a significant services-sector gain, New Zealand is expected to offer 5,000 visas annually for Indian professionals, spanning IT, healthcare, engineering and education.

The provision is seen as a key win for India, easing mobility constraints and reinforcing its position as a global supplier of skilled talent.

Sensitive sectors kept out

Despite the sweeping scope, the agreement is likely to retain safeguards for politically and economically sensitive sectors. India is expected to exclude parts of its dairy and agriculture segments to protect domestic producers.

New Zealand, for its part, is likely to maintain restrictions on select items linked to biosecurity and local industry considerations.

Political fault lines in Wellington

Even as the agreement moves towards signing, it has triggered political divisions within New Zealand.

Although the opposition New Zealand Labour Party has
backed the deal, Labour leader Chris Hipkins said the pact did not fully reflect what his party would have negotiated, but said support in recognition of New Zealand’s broader strategic and economic relationship with India.

Prime Minister Christopher Luxon’s National Party and coalition partner ACT have supported the agreement, but the third partner, New Zealand First, has opposed it — making Labour’s backing critical for ratification.

Immigration row and political backlash

The agreement has also sparked a contentious domestic debate, particularly around immigration provisions.

The controversy intensified after New Zealand First deputy leader Shane Jones triggered outrage with his “
butter chicken tsunami” remark, warning of potential immigration flows linked to the FTA.

The comment drew sharp criticism across the political spectrum, with Hipkins calling it “racist at the least”, while Luxon described it as “alarmist”. The remarks were also criticised by the New Zealand Human Rights Commission.

Jones later defended his statement as deliberate “hyperbole”, while maintaining opposition to the agreement, citing concerns over migration and infrastructure.

A ‘generational opportunity’

For New Zealand, the agreement is being framed as a “generational opportunity” to deepen ties with one of the world’s fastest-growing major economies and reduce dependence on traditional partners such as China.

Government projections suggest bilateral trade could more than triple over the next five years if the pact is implemented effectively.