India and New Zealand launch trade pact to unlock $20 billion in investment

India’s free-trade agreement with New Zealand will take effect on Oct. 20, officials said on Oct. 19, widening market access and regulatory cooperation between two economies with about $1.1 billion in current bilateral merchandise trade.

Dairy stays outside concessions

The Commerce and Industry Ministry said the pact could facilitate up to $20 billion in New Zealand investment into India across agriculture, manufacturing, infrastructure and startups. That potential investment figure is about 18 times the current two-way merchandise trade level cited by officials.

Officials said the agreement is designed to speed regulatory approvals and improve business conditions between the two countries. The government is also targeting a doubling of bilateral trade in the coming years, officials said, as India pursues more free-trade agreements to expand market access and strengthen supply chains.

For India’s services sector, officials said the pact offers wider access in information technology, professional services, construction, tourism and audio-visual services. The agreement also includes dedicated visa quotas for Indian professionals and post-study work rights for students.

Indian pharmaceutical and medical-device exporters are expected to gain faster access after New Zealand accepts inspection approvals from globally recognized regulators, officials said. India excluded dairy, sugar, edible oils and most animal meat products from tariff concessions to protect domestic farmers.

On Oct. 20, the first test will be whether tariff, visa and inspection processes move fast enough to turn the agreement’s market-access provisions into trade and investment flows.