India and New Zealand Confirm Major New Trade Deal

India and New Zealand have finally confirmed a game-changing free trade agreement, bolstering both sides' economies and diversifying exports.

The free trade agreement will see New Zealand remove all import tariffs on Indian exports, while New Zealand will gradually receive tariff reductions on 70% of Indian imports. However, that 70% of products represents around 95% of New Zealand exports to India, making the agreement a major benefit to both economies.

Furthermore, New Zealand will invest over $20 billion in the Indian economy over the next 15 years– a huge advancement from their current trade situation, which is around $2.4 billion when including both sides of exports and imports.

According to a post on X by New Zealand Prime Minister Christopher Luxon, the deal is projected to increase New Zealand's exports to India by $1.1 to $1.3 billion per year, giving them access to the Indian market in ways that other countries have not been able to.

The deal is expected to be signed in early 2026 and will undergo further review after one year.

Meanwhile, the agreement is yet another deal to assist India in moving away from their dependence on exports to the United States, a country which has been heavily impacted by incumbent President Donald Trump's tariffs. India now faces a staggering 50% tariff from the US, consisting of a 25% reciprocal tariff and an additional 25% tax due to India's continued purchases of Russian oil amid Russia's war with Ukraine.

Now, India is ramping up trade with other nations to avoid exporting to the United States– they have already improved relations with China and established free trade agreements with the United Kingdom in May and Oman last week. They are also hashing out agreements with the European Union and Chile and looking to begin negotiations with Canada, helping diversify their economy.

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Image credit to ANI