PM Modi's New Zealand visit to boost ties after new FTA finalised

PM Modi is visiting New Zealand at PM Christopher Luxon's invitation, following a new FTA. The visit aims to enhance economic ties amid a recent trade slowdown, where India's trade balance shifted from a surplus to a deficit with New Zealand.

Prime Minister Narendra Modi will embark on an official visit to New Zealand on Friday at the invitation of New Zealand Prime Minister Christopher Luxon, a visit that comes on the heels of a newly finalised Free Trade Agreement (FTA) designed to reinvigorate bilateral commercial ties amid recent moderation in merchandise trade.

Trade Balance Shifts Ahead of Visit

According to a report by Rubix Data Sciences, total merchandise trade between the two countries recorded an 8 per cent CAGR from FY22 to FY26, reaching USD 1,155 million (USD 1 billion), despite easing from the FY25 peak of USD 1,298 million. The report highlighted that India's trade balance with New Zealand shifted from a USD 113 million surplus in FY22 to a USD 23 million deficit in FY26, as faster import growth outpaced exports. India's export momentum eased in FY26, declining 20 per cent year-on-year to USD 566 million from USD 711 million in FY25. Conversely, imports from New Zealand showed sustained growth, rising to USD 589 million in FY26.

PM Modi's Focus on Economic Engagement

"My visit will meaningfully build upon the strong momentum in our bilateral ties pursuant to the visit of Prime Minister Luxon to India in March 2025," Prime Minister Modi said in his departure statement to New Zealand. "During my visit, I shall discuss with Prime Minister Luxon how to further enhance economic, trade and commercial engagements. India and New Zealand have committed themselves to strengthening bilateral trade and commercial ties with the signing of the Free Trade Agreement," the Prime Minister added.

New FTA to Unlock Trade Potential

Despite the recent temporary slowdown where bilateral trade declined 11 per cent year-on-year from its FY25 peak, the trade volume remains well above historical levels. New Zealand remains a relatively minor trading partner for India, ranking 80th in exports and 74th in imports. This positioning points to substantial scope for diversification and expansion of bilateral trade flows, which the new FTA aims to unlock through improved market access and lower trade barriers.

India and New Zealand launched negotiations for an FTA in March 2025 and concluded the process by December 2025. The agreement was officially signed on April 27, 2026. It covers four key areas, including trade in goods, agriculture and MSME development, services and technical cooperation, alongside investment, mobility, and people-to-people connections.

Diaspora and Regional Importance

New Zealand stands as India's second-largest trading partner in Oceania, supported by a diaspora of approximately 300,000 persons of Indian origin, who make up nearly 5 per cent of the New Zealand population. (ANI)

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