A good template: on India’s FTA with New Zealand

India’s recently announced closure of negotiations for a free trade agreement (FTA) with New Zealand marks a maturing in New Delhi’s approach to global trade. Unlike the earlier headline-grabbing mega trade pacts, this agreement has been negotiated from a position of sectoral caution and strategic clarity. Both countries begin from a relatively low base. India’s Commerce Ministry data indicate that total trade in goods and services in FY25 was a little over $2 billion, modest by India’s contemporary trade standards. Yet, the shared ambition to double trade within five years is notable — not because of the headline number, but because of how the agreement seeks to get there. The most striking feature is India’s success in negotiating a mobility clause, where 5,000 Indian professionals “at any given time” will be eligible for three-year work visas in areas where India enjoys strong domestic capabilities — IT services, health care, education and traditional medicine. This goes well beyond the limited precedents set elsewhere. Even the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) only provides for 1,000 “working holiday” visas annually, which allow young professionals to work short term, typically in hospitality or services, while travelling.

Read alongside New Zealand’s decision to allow uncapped entry of Indian students into higher education institutions and a minimum 20-hour weekly part-time work entitlement, the agreement creates a deeper, people-centric economic bridge. On tariff exclusions, nearly 30% of India’s tariff lines have been kept out, reflecting hard-won carve-outs to protect rural livelihoods. Dairy products; animal products other than sheep meat; and some vegetable products have been excluded. This is no small concession, given that dairy accounts for roughly a third of New Zealand’s global exports. The absence of similar safeguards was a key reason India exited the Regional Comprehensive Economic Partnership in 2019 — a pact in which New Zealand and Australia were central players. The agreement also includes New Zealand’s commitment to investments in India of about $20 billion over 15 years. In that sense, the deal moves past a narrow goods trade lens and gestures towards a more holistic economic partnership. If ratified by New Zealand’s Parliament, as expected, the agreement could come into force within seven months. These are modest gains in the face of mounting global trade headwinds. But for India, the real test lies ahead: ensuring the removal of non-tariff barriers — from recognition of Indian educational qualifications to quality standards and rules of origin — and actively popularising the agreement among sectors poised to benefit. That sustained, patient work will determine whether this FTA becomes a template rather than an exception.