PM Modi says India, New Zealand free trade agreement will boost farmers' incomes, attract investment

INdia and young sjaelland on mon signed a release merchandise agreement that Prime Minister Narendra Modi said would raise farmers’ incomes, strengthen rural economies and attract billions of dollars in investment, as both countries outlined plans for agricultural partnerships, manufacturing linkages and joint exports to global markets.The agreement, concluded in just nine months, gives duty-free access to 100% of India’s exports to New Zealand and opens the door to agricultural technology partnerships, joint ventures and lower-cost industrial inputs for Indian manufacturers.In a written message read out at the signing ceremony in New Delhi by Union commerce minister Piyush Goyal, Modi, who was in West Bengal, said the pact would combine New Zealand’s farming expertise with India’s development priorities. Modi was in Bengal.“The Agricultural Productivity Partnership and Centres of Excellence bring together New Zealand’s advanced agricultural expertise and India’s national priorities to drive transformational gains in productivity and infrastructure, while delivering meaningful benefits to our farmers and rural economies,” he said.Also Read | India-New Zealand FTA signed: $20 billion investment, 5,000 visas and duty-free access | Inside the historic dealGoyal said India had fully protected the interests of domestic farmers and the dairy sector while selectively leveraging New Zealand’s strength in efficient farming practices.Citing kiwi fruit cultivation and Manuka honey, he said Indian farmers could benefit from technology transfer, improved pollination methods and modern beekeeping systems.“I visited kiwi farms in New Zealand run by farmers from Punjab. They have mastered the technique to produce high-quality fruits in large quantities,” Goyal said.He added that honey and apiculture opportunities could particularly benefit farmers in Uttar Pradesh, West Bengal, Punjab, Bihar and Rajasthan.New Zealand trade minister Todd McClay described the pact as one of the “highest quality” FTAs and said businesses from both countries would look to jointly manufacture and export products to world markets. “I think you will see companies from New Zealand come to find partners in India,” he said. “Products from New Zealand and India mixed together can be an opportunity to sell to other countries. That’s how modern trade agreements work.”Under the pact, New Zealand has committed $20 billion in investments across agriculture, manufacturing, infrastructure, startups, innovation and emerging technologies.Modi said the investment commitment would complement the Make in India programme and strengthen India’s role in global supply chains. “This will support the startup ecosystem, entrepreneurs, innovators, women-led enterprises, MSMEs, energising job creation and redefining innovation-driven growth,” he said.Goyal said the India-New Zealand pact was India’s seventh free trade agreement in the past three-and-a-half years, with negotiations underway with the European Union and the United States. He said India now has or is pursuing trade arrangements covering nearly 65–70% of global GDP.Negotiations with New Zealand were launched on March 16, 2025, and concluded on December 22, 2025. Officials said the agreement is expected to come into force later this year after ratification by New Zealand’s Parliament.The FTA is expected to boost labour-intensive sectors including textiles, apparel, leather, footwear, gems and jewellery, engineering goods and processed foods by improving access to the New Zealand market. New Zealand previously imposed tariffs of up to 10% on several Indian exports including ceramics, carpets, automobiles and auto components.India also secures duty-free access to inputs such as wooden logs, coking coal and metal scrap, potentially lowering costs for manufacturers.Officials said India had provided calibrated market access while protecting politically sensitive sectors, especially dairy. India has offered tariff liberalisation on 70.03% of tariff lines covering 95% of bilateral trade value, while excluding 29.97% of tariff lines.Items kept in the exclusion list include dairy products such as milk, cream, whey, yoghurt and cheese; most animal products other than sheep meat; agricultural products including onions, chana, peas, corn and almonds; sugar; artificial honey; animal, vegetable or microbial fats and oils; arms and ammunition; gems and jewellery; and selected copper and aluminium products.While 30% of tariff lines will see immediate duty elimination, including wood, wool, sheep meat and raw hides, 35.6% will see phased tariff removal over three to 10 years on products such as petroleum oil, malt extract, vegetable oils, selected electrical and mechanical machinery, and peptones.Another 4.37% of products will face tariff reductions, including wine, pharmaceutical drugs, polymers, aluminium, and iron and steel articles. A further 0.06% fall under tariff rate quotas, including Mānuka honey, apples, kiwi fruit and albumins including milk albumin.A separate agricultural productivity partnership forms a major pillar of the deal. It includes centres of excellence, improved planting material, grower training, joint research and technical support in orchard management, post-harvest systems, supply chains and food safety.Officials said dedicated projects for apple growers and sustainable beekeeping could help raise output and quality standards.