New Delhi, Apr 27 (PTI) India and New Zealand on Monday inked a 'once-in-a-generation' trade pact, giving duty-free access to 100 per cent of domestic exports, including textiles, leather footwear, and gems and jewellery, in the island nation.

The pact is expected to be implemented by the end of this year as it requires New Zealand Parliament's approval. In India, the Union cabinet approves a trade pact.

For the second time in a trade deal, India has received FDI (foreign direct investment) commitment of USD 20 billion in over 15 years. A similar commitment of USD 100 billion was made by four-European nation bloc EFTA in its pact with India.

The India-New Zealand pact, signed by Commerce and Industry Minister Piyush Goyal and visiting New Zealand's Trade and Investment Minister Todd McClay here, is expected to help double bilateral trade in goods and services to USD 5 billion in five years.

Commenting on the pact, Prime Minister Narendra Modi said it will greatly benefit farmers, youth, women, MSMEs, artisans, startups, students, and innovators.

"The investment commitment of $20 billion by New Zealand will further strengthen our cooperation in agriculture, manufacturing, innovation and technology, paving the way for a more prosperous and dynamic future for both countries," Modi said in a social media post.

Describing it as a "once-in-a-generation agreement", New Zealand's Prime Minister Christopher Luxon said it would provide exporters with unprecedented access to 1.4 billion people and to an economy set to become the world's third-largest.

Commerce and Industry Minister Piyush Goyal said that this is India's ninth agreement in the past few years, with 38 developed countries.

"At the heart of the agreement is the empowerment for exports, agricultural productivity, student mobility, skills, investment and services," Goyal said.

McClay, who is leading a 40-member delegation, said it is a high-quality FTA. "FTA reduces friction, provides certainty, sets clear rules and makes it easier for businesses to build relationships," he added.

The trade agreement, negotiations for which were concluded in December 2025, provides duty-free access for 100 per cent of India's exports to New Zealand, covering all tariff lines or product categories such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods, and processed foods.

Earlier, New Zealand maintained peak tariffs of up to 10 per cent on key Indian exports, including ceramics, carpets, automobiles, and auto components.

On the other hand, India has offered tariff liberalisation on 70 per cent of tariff lines of New Zealand covering 95 per cent of bilateral trade value, while keeping 29.97 per cent of product categories outside the purview of the pact.

The products that are kept in exclusion include dairy (milk, cream, whey, yoghurt, cheese), animal products (other than sheep meat), agri goods (onions, chana, peas, corn, almonds), sugar, artificial honey, animal, vegetable or microbial fats and oils, arms and ammunition, gems and jewellery, copper and articles (cathodes, cartridges, rods, bars, coils), aluminium and articles (ingots, billets, wire bars).

India will provide duty-free access of number of goods from New Zealand and that includes wooden logs, coking coal, waste and scraps of metals, wood, sheep meat, and leather-raw hides.

Similarly, on goods such as petroleum oil, malt extract, vegetable oils, selected electrical and mechanical machinery, and peptones, India will reduce levies in a phased manner over 3, 5, 7, and 10 years.

New Zealand products which enjoy tariff reductions include wine, pharmaceutical drugs, polymers, aluminium, iron and steel articles.

On certain products such as Manuka honey, apples, kiwi fruit, and albumins, including milk albumin, New Delhi has offered quota-based duty concessions with Minimum Import Price and other safeguards, ensuring quality imports and consumer choice while protecting domestic farmers.

All tariff rate quotas (TRQs) for apples, kiwifruit and Manuka are paired with delivery on "Agriculture Productivity Action Plans" which would be monitored by a Joint Agriculture Productivity Council, balancing market access with protection of sensitive domestic agricultural sectors.

On the services side, India will get market access commitments by New Zealand in about 118 services sectors such as computer-related services, professional services, audiovisual, telecommunication, construction, education, environmental, financial services, tourism and travel.

It will provide easier access to New Zealand's services market across many sectors, which can boost India's services exports.

Further 'Most-Favoured Nation' (MFN) commitment will be granted in about 139 sub-sectors to India.

MFN commitment means that if New Zealand gives better treatment to any other country in those sectors later, it can extend the same treatment to India as well.

The FTA also establishes a new temporary employment entry visa pathway for Indian professionals in skilled occupations, with a quota of 5,000 visas at any given time and a stay of up to three years.

This pathway covers Indian professions such as AYUSH practitioners, yoga instructors, Indian chefs, and music teachers, as well as high-demand sectors including IT, engineering, healthcare, education, and construction.

For the first time with any country, New Zealand has created a dedicated pathway for student mobility and post-study work visas with India.

Total bilateral trade in goods and services reached USD 2.4 billion in 2024.

Bilateral merchandise trade stood at USD 1.3 billion (USD 711.1 million and imports 587.13 million) in 2024-25, while total trade in goods and services reached about USD 2.4 billion in 2024, with services trade alone reaching USD 1.24 billion, led by travel, IT, and business services.

India exports include aviation fuel, pharmaceuticals, motor vehicles, petroleum products, readymade garments, and machinery; while imports include wood and wood products, iron and steel, raw wool, dairy products, scrap metals, coal and farm-linked inputs. PTI RR MR