40-year wait ends: PM Modi historic visit will transform India-New Zealand relations

40-year wait ends: PM Modi historic visit will transform India-New Zealand relations: Prime Minister Narendra Modi is on a visit to New Zealand. This is the first official visit by an Indian Prime Minister to New Zealand in nearly four decades. During the visit, Prime Minister Modi and New Zealand Prime Minister Christopher Luxon will hold bilateral talks in Auckland. The two leaders will review cooperation in areas such as trade, investment, defense, education, and security.

How long-standing are the relations between India and New Zealand?

Relations between India and New Zealand have long been friendly. Both nations were once part of the British Empire. They are both members of the Commonwealth and share many commonalities, such as democratic systems, common law, the English language, sports, and strong people-to-people ties.

Diplomatic relations between India and New Zealand were established in 1952. However, a trade commission had already been set up between the two countries in 1950, which was later upgraded to the status of a High Commission. Over time, both nations have consistently advanced their political, economic, and strategic cooperation.

Why is India becoming increasingly important to New Zealand?

New Zealand views India as a rapidly emerging economy and one of the world's most populous nations. India's growing global influence, robust economy, and expanding role in the Indo-Pacific region are continuously enhancing its importance to New Zealand.

For this reason, New Zealand included India among its priority countries in 2011 under a policy aimed at unlocking new opportunities. Subsequently, through strategies such as the 'New Zealand-India Strategy' and 'India-New Zealand 2025: Investing in the Relationship,' both countries set goals to further strengthen trade, investment, and mutual cooperation.

What makes New Zealand special?

New Zealand is an island nation located in the southwestern Pacific Ocean, approximately 1,600 kilometers away from Australia.
According to Worldometer, its population is approximately 5.29 million (5,291,072).

It is ranked among the world's most developed nations and is known for its high standard of living, transparent governance, human development, and civil liberties.

According to the International Monetary Fund, New Zealand's economy (GDP) is projected to reach approximately $278.64 billion by 2026, with an expected economic growth rate of 2.1%.

In which areas do the two countries cooperate?

The two countries are cooperating in sectors such as trade, investment, defense, education, tourism, agriculture, technology, health, culture, and sports.
Both nations are members of international organizations such as the United Nations, the World Trade Organization (WTO), and the Commonwealth.
Furthermore, both countries share common interests regarding the security and stability of the Indo-Pacific region.
There have also been historic ties between the two nations in the defense sector. Soldiers from both countries fought together during World War I and World War II. Currently, both nations are working to enhance defense cooperation and military engagement.

How did trade relations grow?

In March 2025, both countries announced the start of negotiations for a comprehensive free trade agreement, and the deal was finalized on April 27—a process completed in a record nine months.
This agreement is considered significant for India in several ways. It will provide Indian exporters with better access to the New Zealand market while also strengthening pathways to reach countries in Oceania and the Pacific Islands.
India exports a variety of products to New Zealand, including pharmaceuticals, machinery, textiles, vehicles, and precious stones and jewelry.
Conversely, India imports wool, iron and steel, aluminum, fruits, nuts, wood products, and other goods from New Zealand.
Both nations are also exploring new opportunities in sectors such as IT, engineering, healthcare, education, construction, agriculture, food and beverages, aviation, and technical services.

What are the benefits of the FTA?

Under this agreement, import duties on 100% of India's exports will be eliminated. This will make Indian products more competitive in the New Zealand market.
New Zealand has pledged to invest US$ 20 billion over the next 15 years.
Under an agricultural productivity partnership, both countries will collaborate in the agricultural sector, helping to boost farmers' productivity and integrate them into global value chains.
The agreement will also boost MSMEs and employment. Labor-intensive industries—such as textiles, garments, leather, footwear, gems and jewelry, engineering goods, and processed foods—will benefit from zero-duty access.
India has granted New Zealand market access across 70.03% of tariff lines, while 29.97% of tariff lines have been excluded from the agreement. This covered segment accounts for approximately 95% of the bilateral trade between India and New Zealand.
India has excluded certain sensitive products from the agreement. These include dairy products (milk, cream, cheese, yogurt, etc.), most animal products, agricultural items (such as onions, chickpeas, peas, maize, and almonds), as well as sugar, artificial honey, vegetable and animal oils, arms and ammunition, copper, aluminum, and various products made from them.
Upon the agreement coming into effect, duties on approximately 30% of tariff lines will be completely eliminated. This includes products such as wood, wool, mutton, and raw hides/skins.
Duties on 35.60% of tariff lines will be phased out gradually over periods of 3, 5, 7, and 10 years. These include petroleum oils, malt extract, vegetable oils, certain electrical and mechanical machinery, and other products. For approximately 4.37% of products, duties will not be completely eliminated but rather reduced; this category includes items such as wine, medicines, polymers, aluminium, and certain iron and steel products. Meanwhile, a tariff-rate quota will apply to 0.06% of products, covering specific items like Manuka honey, apples, kiwifruit, and milk albumin.

What do the trade figures indicate?

Trade between India and New Zealand has been steadily increasing.
Looking at the last decade, the trade in goods between the two countries stood at US$ 855 million in 2015-16.
In 2023-24, the trade in goods between the two nations was US$ 873 million, rising to US$ 1.3 billion in 2024-25—an increase of approximately 49 percent.
India's exports to New Zealand reached US$ 711 million in 2024-25.
In 2024, India's service exports also grew by 13 percent, reaching US$ 634 million.

Why is this visit considered so significant?

This visit to New Zealand by an Indian Prime Minister—the first in nearly 40 years—is taking place at a time when both nations are actively working to enhance cooperation in trade, investment, defense, education, and the Indo-Pacific region. In recent years, economic ties between the two countries have strengthened, a free trade agreement has been concluded, and people-to-people connections have grown.

A day before PM Modi's arrival in Auckland, New Zealand Prime Minister Christopher Luxon announced that 57% of New Zealand's exports to India would become duty-free from day one. Welcoming this trade agreement, he wrote on the social media platform X that the deal would provide a major boost to New Zealand businesses.