A detailed investigation into the fourth round of negotiations between India and New Zealand as both countries strive for a balanced and future-ready trade pact.
After five intensive days of negotiations in Auckland and Rotorua, the fourth round of the India–New Zealand Free Trade Agreement (FTA) concluded on November 7 2025, marking a pivotal moment in bilateral economic diplomacy. The two countries reaffirmed their commitment to concluding a modern, comprehensive trade deal that aims to deepen trade flows, fortify investment links and enhance supply-chain resilience. Press Information Bureau With India’s commerce minister Piyush Goyal and New Zealand’s trade minister Todd McClay both signalling forward movement, there is optimism—but also realism—about the work ahead.
Strengthening Economic Ties: What’s at Stake
Both nations enter the talks recognising their modest yet fast-growing trade relationship: India’s bilateral merchandise trade with New Zealand reached US$1.3 billion in FY 2024-25, an approximate 49 % year-on-year jump. Press Information Bureau+1 The FTA aims to build on this momentum by opening new avenues in sectors such as:
Agriculture and food-processing
Renewable energy and climate-tech
Pharmaceuticals and healthcare services
Education and professional services
Investment in digital economy and supply-chains
The business community on both sides sees tangible gains: better market access, improved transparency and reduction of trade-friction. As one New Zealand agricultural exporter put it: “India’s growing appetite for dairy and horticulture is real—but tariff and non-tariff barriers must fall.”
Background: Why This FTA Matters
Past Rounds and the Broader Strategy
The formal launch of FTA talks came in March 2025, when Prime Ministers Narendra Modi of India and Christopher Luxon of New Zealand agreed on a time-bound process. Reuters India previously had many trade agreements, but this is among the few with a developed-economy Western partner in the Asia-Pacific. The fourth round follows earlier sessions in July and September. Reuters
India’s motive: diversify its global trade portfolio beyond traditional large partners; upgrade its export basket; strengthen supply-chain security. For New Zealand: access to India’s 1.4 billion-plus consumer base, and deeper integration within the Indo-Pacific economic architecture.
Historical Trade Snapshot
India’s exports to New Zealand in 2023 were modest but rising. Reuters
Trade in services and investment links remain relatively low compared with other Indian partners, leaving room for significant growth.
The push for this FTA aligns with India’s broader “Act East” / “Indo-Pacific” economic policy, and New Zealand’s interest in strengthening ties with emerging markets.
Key Developments in the Fourth Round
Five Days of Technical and Strategic Negotiation
The fourth round (Nov 3-7, 2025) was held in Auckland and Rotorua. Topics included:
Trade in goods: market access for key sectors, tariff liberalisation, non-tariff barriers.
Trade in services: liberalisation of professional, educational, digital services.
Rules of origin (RoO): vital for ensuring “Made in India/ NZ” claims and preventing third-country transits.
Investment and supply-chain resilience: supporting mutual investment flows.
Sustainability, climate-linkages and future-proof provisions: acknowledging green-trade imperatives.
The official statement said: “The discussions reflected the shared ambition to strengthen economic ties and build a mutually beneficial partnership that supports resilient, inclusive and sustainable growth.”Press Information Bureau
Market Access and Agriculture: The Core Challenge
One of the most sensitive issues remains New Zealand’s key agricultural and dairy exports: butter, cheese, milk powder. These sectors immediately feed into India’s domestic policy concerns of farm protection, subsidies and food inflation.
According to the AP News retrospective: “Differences over dairy tariffs have delayed progress.” AP News India demands safeguards for its small-scale farmers, while New Zealand seeks meaningful access to the Indian market.
Bilateral Trade Figures & Growth
Bilateral merchandise trade: US $1.3 billion (FY 2024-25) – up ~49%. The Times of India+1
Growth mainly driven by Indian exports of textiles, apparel, automotive components; New Zealand exports in dairy, meat and agrifood.
Services trade and investment flows remain under-penetrated.
Investigation: What’s Working and What’s Holding Back
Structural Differences
The two economies differ significantly:
India: large population, diversified manufacturing base, domestic market-focused; high protective duties in many sectors.
New Zealand: small domestic market, export-oriented agriculture, services-led economy, advanced regulatory standards.
These asymmetries complicate negotiations on tariffs, quotas, and regulatory alignment.
Political Economy Issues
In India, agriculture and dairy policy remain politically sensitive ahead of elections in some states. Any agreement perceived as favouring foreign supply could provoke backlash. In New Zealand, the trade minister has to balance farm-sector interests with export diversification goals.
Supply-Chain and Investment Opportunities
The FTA is not solely about trade in goods; it’s about reshaping supply-chains. India’s ambition: become an alternative manufacturing hub to China, attract foreign investment. New Zealand: diversify export destinations, integrate into Indo-Pacific value-chains.
Experts say this FTA could:
Encourage Indian sourcing of NZ agrifood (high-quality dairy) under Indian “Atmanirbhar Bharat”-manufacturing chains.
Enable NZ investment into Indian renewable-energy infrastructure, educational institutions, services.
Regulatory and Standards Alignment
Negotiations on sanitary & phytosanitary (SPS) standards, technical barriers to trade (TBT), intellectual-property protection and digital-trade rules are complex. India’s regulatory regime has multiple stakeholders (ministries of agriculture, consumer affairs, commerce), making convergence slower.
Expert Perspectives & Stakeholder Voices
“The FTA presents an important strategic pivot for India outside the big-players; but the real question is whether the deal is meaningful or just symbolic.” — Dr Rishabh Arya, Trade Economist, Centre for Indian Trade Policy.
“New Zealand sees India as the last big frontier for dairy and services expansion; but it knows the political reality in India is hard.” — Fiona Morrow, Senior Analyst, New Zealand Institute of Economic Research.
A small-scale dairy-farmer in Canterbury, NZ: “We hear of export markets opening—but India means everything to us, so we want real-access not token promises.” An Indian electronics exporter in Bengaluru: “The FTA talk gives hope—but unless tariffs drop and regulations simplify, we won’t see much change.”
India’s total goods exports in FY 2024-25: ~US $460 billion (for context).
NZ’s exports to India: historically small but rising; experts expect double-digit growth if FTA enacted.
According to Organisation for Economic Co-operation and Development (OECD) data, small economies like NZ face large sensitivity to export-market access.
Leveraging NZ’s strengths in clean-tech, green energy, education and services.
For New Zealand
Gaining entry into India’s vast market; planting for long-term growth rather than volume.
Reducing over-dependence on Australia and China as export destinations.
Positioning as part of India’s Indo-Pacific trade expansion.
For Both
Enhances supply-chain resilience in an era of geopolitical fragmentation.
Sets standard for future India-Pacific free-trade deals—especially with small developed partners.
Demonstrates ability of India to negotiate “advanced economy” FTAs, bolstering its global trade credibility.
Conflict, Friction and the Tough Negotiations
Dairy and agricultural tariffs: NZ’s key pain-point; India’s political sensitivity.
Services market access: India pushes for strong commitments in tech, education; NZ cautious.
Rules of origin: India demands flexibility; NZ insists on stringent criteria to protect its domestic producers.
Sustainable-trade clauses: NZ favours strong environmental provisions; India requires balance with developmental priorities.
Time-lines and process: NGOs and opposition in India question the speed and transparency of negotiations.
A Deal with Promise—but Not Yet Locked-In
The fourth round of India–New Zealand FTA talks marked clear progress. Both countries have signalled that they are serious about a deal. But serious work remains. The strategic opportunity is large—yet so too are the technical, political and economic hurdles.
If the FTA is concluded and ratified, it could become a model for India’s trade relations with small, advanced-country partners: modern, inclusive and forward-looking. If it falters, it may be a missed chance in an era when trade alliances matter increasingly.
For now, the words from the ministers—commitment, momentum, future-ready—are encouraging. The test will be: can they translate into meaningful outcomes for exporters, farmers, services firms and consumers on both sides?
India and New Zealand stand at the beginning of what could become a defining economic partnership for the Indo-Pacific age. But early momentum must be matched by detailed delivery. The next few rounds will show whether progress becomes ground-truth—or remains rhetoric.
