A high-level delegation from New Zealand is set to arrive in New Delhi on Monday to commence negotiations for a free trade agreement (FTA) with India. The primary aim of this FTA is for both nations to diversify their trade partnerships and reduce their dependence on traditional markets. The formal launch of these talks was announced on 16 March 2025 by New Zealand Prime Minister Christopher Luxon during his visit to India, following initial reports in June 2024 about the resumption of the proposed FTA discussions.

The discussions will focus on crucial aspects such as enhanced market access for Indian goods, facilitating the mobility of Indian professionals, and establishing supply chain facilities to boost trade between the two countries. New Zealand is particularly interested in securing greater market access for its key exports, including dairy products, fruit, and wool.

This strategic move is crucial, especially given the recent imposition of an additional 10% tariff on imports from both India and New Zealand by the United States, effective 5 April. New Zealand’s trade is heavily based on agricultural products, education services, and technology, exporting dairy products, wool, and fruits to India, while India exports pharmaceuticals, textiles, and IT services to New Zealand.

In the fiscal year 2023-24, the total trade between India and New Zealand amounted to $873.4 million. India’s exports to New Zealand were valued at $538.33 million, while imports from New Zealand stood at $335.07 million. Recent data indicates a robust growth of 32.26% in India’s exports to New Zealand, increasing from $441.56 million during April–January in 2023-24 to $583.99 million in the corresponding period of 2024-25. Notably, India’s imports of fresh cheese from New Zealand surged by 500%, from $0.03 million to $0.18 million during the same period. Imports of kiwis and apples have also remained strong, demonstrating a consistent demand for New Zealand’s fresh produce in the Indian market.

Currently, over 700 trade lines are operational between India and New Zealand. A key point of contention, however, revolves around market access for dairy products, which is a top priority for New Zealand but faces resistance from India, which aims to protect its domestic farmers. Despite these reservations, both countries are keen on signing a mutually beneficial deal and are willing to address each other’s concerns to reach a constructive resolution.

Negotiations for the FTA initially began in April 2010 but were stalled in February 2015 after 10 rounds due to disagreements over market access and trade priorities. A significant challenge in finalizing the FTA is New Zealand's insistence on increased dairy access, which India has consistently opposed. India seeks greater access for its agricultural products, textiles, and IT services, including improved market access for its grapes. Furthermore, India has requested approval for vapour heat treatment (VHT) facilities in Delhi and Lucknow to eliminate pests, as reported on 12 August 2024.

India has already established FTAs with several countries, including Japan, South Korea, Australia, and the European Free Trade Association (EFTA), and is currently negotiating FTAs with Oman and economic blocs such as the Association of Southeast Asian Nations (Asean) and the European Union.