New Zealand-India free trade agreement unlikely to deliver immediate economic boost
The New Zealand Institute of Economic Research said the country's free trade agreement with India is unlikely to deliver an immediate boost to the economy. The deal is more about strategic positioning in a fragmented global economy than near-term export gains. Dairy and education services are the focus.
A new report from the New Zealand Institute of Economic Research (NZIER) finds that the New Zealand-India Free Trade Agreement, signed last month, is unlikely to deliver an immediate boost to export volumes. NZIER senior economist Christina Leung told RNZ that "the deal is less about short-term export gains, and more about positioning New Zealand in a more fragmented and uncertain global economy".
Under the agreement, India is opening a 35,000-tonne tariff-free quota for New Zealand dairy products (particularly cheese and milk powder). New Zealand will accelerate licensing for Indian IT firms operating locally, and the two countries have signed a mutual qualifications-recognition agreement covering higher education. The Reserve Bank of New Zealand (RBNZ) will assess the impact in its 2027 monetary policy report.
Fonterra shares were 0.8% higher on the Auckland exchange. The New Zealand dollar (NZD) strengthened by 0.3% against the Indian rupee but held at 1.09 against the Australian dollar. ANZ Bank economist Sharon Zollner described the deal as "more of a geopolitical insurance policy". India was New Zealand's seventh-largest trading partner in 2025.
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