New Zealand-India Free Trade Agreement unlikely to deliver immediate boost to economy

The New Zealand-India Free Trade Agreement is unlikely to deliver an immediate boost to the economy, a new report from the New Zealand Institute of Economic Research (NZIER) says.

The NZIER Insight said the deal was less about short-term export gains, and more about positioning New Zealand in a more fragmented and uncertain global economy.

Too much focus was placed on tariff reductions and early trade benefits, principal economist Chris Nixon said.

"The real significance of this agreement lies in securing New Zealand's position with an increasingly important economy and geopolitical actor."

The report said India was becoming more integrated into global trade, investment, and technology networks, creating opportunities over time in areas such as services, education, investment, and specialised exports.

However, it noted the deal had clear limitations, particularly in agriculture and some regulatory areas, and was not as comprehensive as many of New Zealand's recent free trade agreements.

NZIER said the value of the agreement lay in building long-term relationships, improving regulatory engagement, and creating a platform for future opportunities, rather than delivering a sharp lift in trade straight away.

"Being there matters. Trade agreements create platforms for future opportunities, not just immediate market access gains."

The report also highlighted the importance of diversifying trade relationships, warning that reliance on a small number of markets left New Zealand exposed in a more volatile global environment.

It said India should be seen as part of a broader mix of trading partners, helping improve resilience rather than replacing existing relationships such as China, Australia, or the United States.