top of page

India New Zealand FTA and Its Strategic Connotation

By Balaji Chandramohan


Image courtesy: X/ @PiyushGoyal



India has steadily expanded its global trade partnerships to strengthen economic growth, create jobs, and enhance its global standing which has got highlighted with the recent signing of the Free Trade agreement with New Zealand. 1


After signing six Free Trade Agreements in the last five years, India and New Zealand have just concluded negotiations for a forward-looking FTA,  marking a historic milestone in bilateral economic relations. The Agreement delivers unprecedented duty-free access for Indian exports to New Zealand while safeguarding India’s sensitive sectors, strengthening economic resilience, and promoting inclusive growth aligned with India’s national priorities.2


Features of India New Zealand FTA

Salient Features of the India New Zealand FTA include the elimination of duty on 100% of Indian exports and a USD 20 billion investment commitment over 15 years strengthens long-term economic and strategic cooperation.


Further, the FTA boosts Jobs through Zero-duty access for labour-intensive sectors including textiles, apparel, leather, footwear, gems and jewellery, engineering goods and processed foods.


On the other hand, India has offered market access in 70.03% of the tariff lines while keeping 29.97 % tariff lines in exclusion. Immediate Elimination (EIF) on 30%, Rest is phased.


Certain products are excluded from the preview of the FTA such as dairy (milk, cream, whey, yoghurt, cheese etc.), animal products (other than sheep meat), vegetable products (onions, chana, peas, corn, almonds etc.), sugar, artificial honey, Animal, vegetable or microbial fats and oils, Arms and Ammunition, Gems and Jewellery, Copper and Articles (Cathodes, Cartridges, Rods, Bars, Coils etc.), Aluminium and articles thereof (Ingots, billets, wire bars) among others.


New Zealand’s market access offer covers immediate elimination of duties (zero duty) on 100% of tariff lines of New Zealand (8,284 tariff lines), from Entry into Force as envisaged in the FTA.


It’s understood that New Zealand maintained tariffs around 10% in around 450 lines of key Indian exports in products including textile/apparel products, leather and headgear, ceramics, carpets, ⁠automobiles and auto components. Additionally, the average applied tariff at 2.2% in 2025 will become zero from EIF.


Meanwhile, FTA offer extends gains to several products and sectors Labour intensive sectors like textiles and clothing, leather and footwear; Emerging and advanced engineering sectors like transport/auto, pharmaceuticals, plastic & rubber, electrical & electronic machinery, mechanical machinery, chemicals and;


Gains from import to support domestic industries: wooden logs, coking coal, waste and scrap of ferrous, non-ferrous metals Gains for Agriculture, Technology Cooperation, and Farmer Income Growth


Also, New Zealand have agreed on focused Action Plans for kiwifruit, apples, and honey to improve productivity, quality, and sectoral capabilities of these fruits growers in India The cooperation includes the establishment of Centres of Excellence, improved planting material, capacity building for growers, technical support for orchard management, post-harvest practices, supply chains and food safety which will improve bilateral trade.

Projects for premium apple cultivators and sustainable beekeeping practices will enhance production and quality standards.      


Investment and Economic Co-operation

As a part of the FTA, New Zealand will invest USD 20 billion in India over 15 years, strengthening long-term economic ties. Organic Primary Products: Mutual recognition of organic certification to be agreed between the two sides. MSME Cooperation: Institutional linkages to help small businesses access trade-related information and global markets.


Technical Assistance: Cooperation has been agreed in AYUSH, audio visual industries, tourism, sports and traditional knowledge systems. The FTA promotes India’s AYUSH systems internationally, encourages medical value travel, and positions India as a global wellness hub. 


India New Zealand strategic co-operation

In terms of strategic co-operation, India will improve it’s existing strategic connotation with the Indo Pacific by converting the trade relations into strategic partnership. 3


This coincides with New Zealand’s interests in South-East Asia’s Indian Ocean littoral and its long-standing commitments under the Five Power Defence Agreement. India’s increased power projection in the region could benefit New Zealand’s strategic interests there, which tend to parallel those of Australia. For instance, both India and Indonesia have decided to enhance their counter-terrorism mechanisms and maritime strategic co-operation, the latter primarily with China in mind. 4


For its part, after the end of the Cold War, India shed its ideological trappings and now seeks to conduct its bilateral relations not only on shared values of democracy but also to incorporate notions of realpolitik and a sound understanding of the present geo-political changes.


In the above context, China has enhanced its strategic scope in the Pacific Islands with the recent signing of the strategic partnership between the Cook Islands and China.


On the other hand, India’s previous position of non-alignment and its ambiguous stance on nuclear disarmament never sat comfortably in Wellington. On the other hand, both India and New Zealand have understood the value of connecting with a shared Commonwealth history as a part of their foreign policy endeavours.5


It is no longer a secret that, with its emergence as a great power in the Indo-Pacific, India could lead global multi-lateral platforms such as Commonwealth countries and even come to assume a leadership role among English-speaking democracies.


New Zealand, like India and Australia, has understood the changing strategic outlook in the Indo-Pacific. China’s emergence as a major power was reflected in the Defence White Papers released by Wellington.


India has never explicitly stated that it wishes to form some sort of alliance with democratic nations against China. Neither does New Zealand wish to be part of some anti-Beijing alliance, particularly considering that it signed a Free Trade Agreement with China in April 2008 – the first Western country to do so.6


However, a diplomatic initiative between two democratic countries which have shared values and common interests in the Indo-Pacific region should be explored further. The challenge for India and New Zealand in forming an effective strategic relationship lies in finding a consensus within their domestic constituencies for greater strategic relationships with the United States in the years to come.


New Delhi has been quite reluctant to embrace a better strategic relationship with the United States too closely or even with Australia or New Zealand.


Part of the problem lies in the fact that, while India’s foreign policy orientation very much favours such a relationship, it is still reluctant to deepen the strategic relationship to the extent that it might include more frequent port calls by US warships or even the stationing of US troops on Indian soil This position may change with the forming of the open strategic alliance between US and India.


This, some think, will give New Delhi the diplomatic freedom to pursue its own ambitions. But, at some stage, Indian policymakers will need to have a nuanced debate on an effective, flexible overall strategy.


In some ways, New Zealand’s position is similar to that of India. Within New Zealand, there is a domestic constituency that does not favour a closer strategic relationship with the US. But with an evolving geopolitical order and Beijing’s increased assertiveness in the South China Sea and greater presence in the South Pacific, New Zealand is keen to deepen its strategic relationship with the US, including closer defence co-operation.7


As part of India’s power projection efforts in the Indo-Pacific, New Delhi has decided to strengthen its Eastern Fleet in Vishakhapatnam and the tri-command service in the Andaman and Nicobar Islands. In the future, Southeast Asian countries such as Singapore and Malaysia will increasingly look to India, as well as the United States, for security.


The above posture  coincides with New Zealand’s interests in South-East Asia’s Indian Ocean littoral and its long-standing commitments under the Five Power Defence Agreement. India’s increased power projection in the region could benefit New Zealand’s strategic interests there, which tend to parallel those of Australia. For instance, both India and Indonesia have decided to enhance their counter-terrorism mechanisms and maritime strategic co-operation, the latter primarily with China in mind.


India and New Zealand have a lot in common: both countries have democratic institutions based on the Westminster parliamentary system, are members of the Commonwealth and have a keen interest in an international system that supports the rule of law.


From India’s point of view, having a partner in New Zealand provides an effective way to further its expanding strategic interests. It very much coincides with Wellington’s growing interest in the Indo-Pacific region. It should serve as a common thread for Indo-New Zealand relations in the future, although there will be challenges such as a consensus for their strategic relationships with the United States and occasional differences over the Nuclear Non-Proliferation Treaty.8


The New Zealand Defence White Papers has tried to explain the complex geo-political game that Wellington is set to play in the foreseeable future which to a larger extent may impact the internal allocations of funds for the services and the politico-military strategy that Wellington has to undertake in the foreseeable future.


Strategically, the New Zealand Defence White Papers have tried to give answers to the ends ways and means triangle.


The way for the above for the strategic objective, it’s understood that New Zealand will strengthen the existing alliances with the United States and Australia which operationally meaning that there will be co-operation between Wellington and Washington in multi-lateral naval exercises such as the Rim of the Pacific Exercise.


One of the important aspects which included the Defence White Papers was Wellington’s explicit concurrence to Washington’s Pivot or Rebalance in the whole of the Asia Pacific which to a larger extent was a new development from the Defence White Paper 2010.


The above aspect has been reflected in New Zealand’s affirmation in the need to keep the Sea Lines of Communications open in the Asia Pacific and the need to have the Command of the Sea secured near its maritime zone.


However, the military means to get the political objectives is assumed to facilitate in shifting New Zealand strategic orientation to have a maritime strategic thought is important as it will enable the internal force structuring and externally it enables it to balance the existing delicate diplomacy that Wellington has to play between Washington and Beijing.


In terms of geo-political perspective the Defence White Paper 2016 has given importance to both Indo-Pacific and Asia-Pacific as the former doesn’t include the South Pacific. The above maritime strategic thinking and the geo-political changes overall New Zealand Defence Forces operational zone of responsibility. Secondly, it’s to be noted that the New Zealand Defence Capability Plans  released by Wellington, mentions the importance of Asia Pacific therefore it’s understood that a dichotomy exists between Indo-Pacific and Asia Pacific in New Zealand strategic mental mapping.


Third , as the New Zealand Defence White Paper has given importance to challenges that Wellington  has to face with the rise of China, it’s understood that New Zealand for its security reasons will commit itself to preserve the existing status quo in the international system and so especially in Asia Pacific. This aspect is the crucial difference between the Defence White Paper 2010 where attention


On too much expected monies to be spent on defense include NZ $20 billion increase in defense spending announced for the next 15 years adds up to a significant investment in New Zealand  Defence Forces' capabilities.


In the above said issue, from the Defence White Paper New Zealand maritime strategic maneuvering will involve both protecting the Sea Lanes of Communications and so conducting the operations in the littorals.


To protect the Sea Lanes of Communications, Wellington has used the newly coined maritime geo-strategic term Indo-Pacific and for conducting operations in the littorals of the South Pacific it’s understood that the term Asia Pacific will suffice.


The subtle variation is important as envisaged by the Defence White Paper 2010 as it’s understood that New Zealand’s strategic interest lies in between the South-West Pacific till South Pacific unlike its Antipodean neighbor which has identified it’s Area of Strategic interest from South-East Asia till South Pacific.


The above contradiction Wellington’s geo-political perspective and geo-orientation is important as that will affect Wellington’s strategic outlook and the internal balancing it requires among the services.


In that effect, New Zealand Defence White Papers underlined the importance of the Royal New Zealand Navy’s Doctrine 1997, though there is no explicit mention of terms such as Command of the Sea or spelling out the much needed Oceanic Policy much like its cross-Tasmanian counterpart.


To start with, as to strengthen its ability to deploy across the South Pacific, it’s understood that New Zealand will strive to have a maritime predominance on the overall military operations and so strengthening the existing capabilities of the New Zealand Defense Force for the logistics and lift operations and for that a new littoral vessel to be operated in the will be acquired. Interestingly, the Defence White Paper 2016 has also detailed New Zealand’s Defence Forces Area of Operation involving Antarctica and the Southern Ocean.


Also, it’s to be noted that as the New Zealand Defense Force shifts its focus to maritime oriented it will be interesting to see some of the concepts which were discussed actively in the New Zealand strategic community on issues such as Revolution in Military Affairs in the early of this century will be achieved.


Perhaps, it seems from the outlook of the New Zealand Defence White Paper that there has been a wait till the Australian Defence White Paper was released therefore much clarity on thought on Wellington’s observations on South Pacific could take shape. For instance, the Australian Defence White Paper observed that Australia will eventually upgrade its submarines to 12 from the existing six and by guess it will be based in Australia’s Perth Fleet overlooking the Indian Ocean rather than on its Sydney Fleet overlooking South Pacific. This nugget means that New Zealand has to tighten its maritime outlook in the South Pacific which as a reflection means strengthening its patrolling capacities.


One of the key aspects which were left out in the Defence White Paper 2016 was how New Zealand’s strategic outlook will include with the new assertion of countries such as India and Indonesia beyond the Indian Ocean till South-West Pacific and even extending to South Pacific.


On Wellington's much awaited response to the South China Sea issue, the Defence White Paper is up front in saying that it will not take sides and so on the Senkaku/Diaoyu Islands in East Asia. However, from a geopolitical perspective it’s understood that the Defence White Paper commits itself to the existing status quo which to a larger extent angles to its alliance partners.


Further, the Defence White Paper has acknowledged the existing alliance to which it’s tied to Australia and so interestingly it has acknowledged the United States’ rebalances in the Asia Pacific and the commitments that it brings to New Zealand.


As an extension, the Defence White Paper reaffirms the Wellington Declaration in 2010 and the Washington Declaration in 2012. As an extension operationally it will be interesting to note that New Zealand may co-operate with both the Seventh Fleet and the Sixth Fleet of the United States. In terms of Command structure it means that co-operation will include between the New Zealand Defense Forces and the United State’s Pacific Command and Southern Command – the latter which overlooks the operations in the South-East Pacific.


On the above note, for example from India is inching close to the United States on issues such as The Logistics Support Agreement (LSA), Communications Interoperability and Security Memorandum of Agreement (CISMOA) and Basic Exchange and Cooperation Agreement (BECA) for Geo-spatial Cooperation. All these agreements which are aimed at sealing a comprehensive umbrella of security provisions in the Asia Pacific which also involve issues related to New Zealand’s security also.


Conclusion

In conclusion, the New Zealand India FTA will have great connotation both at the trade and security  level which will enhance the existing strategic partnership between New Delhi and Wellington.9

 

Notes

1)      Kripa Anand India-New Zealand Free Trade Agreement: Strategic and Maritime Implications for India’s Engagement with Oceania ( NMF, January 2926) 

2)      What is the India-New Zealand Free Trade Agreement? | Explained ( The Hindu, December 30,2025)

3)      Balaji Chandramohan New Zealand PM Luxon’s visit to India will enhance strategic partnership ( The Diplomatist, March 17,2026)

4)      Balaji Chandramohan India increases its strategic antenna towards the Pacific Islands ( Diplomatist, September 27,2024)

5)      Beyond Britain, Why India Should Lead the Commonwealth’, Indian Express, 27 November 2009.

6)      Balaji Chandramohan India has to worry over New Zealand election result ( IANS, November 15,2008)

7)      Balaji Chandramohan John Key visit to India for bilateral talks ( Indiannewslink, June 14,2011)

Balaji Chandramohan Chandramohan, Facing new defence challenges. New Zealand International Review, 41(6), 19–21 

8)      Balaji Chandramohan Paul G Buchanan Assessment Brief: Indian-Australian strategic co-operation in the early 21st century ( 36th Parallel Assessment, October 31 2012)

9)      Balaji Chandramohan Luxon visit could be game changer in the India New Zealand FTA stalemate

 

 

 (Mr. Balaji Chandramohan is a an expert writer. The views expressed here are that of the author and does not reflect the views of CAS.)


Comments

LATEST
bottom of page