India, New Zealand To Deepen Banking, Digital Payment Ties Under FTA

India-NZ FTA: India and New Zealand have agreed to expand cooperation in financial services under their recently concluded Free Trade Agreement (FTA). The move marks a significant step toward integrating banking, insurance, and digital payment systems between the two economies.

The FTA includes a dedicated financial services chapter aimed at creating new market opportunities for Indian fintech players. New Zealand will facilitate the entry of Indian digital payment providers, enabling platforms such as Unified Payments Interface (UPI) and NPCI-backed solutions to operate in its market.

Both countries will collaborate on real time cross-border transactions. This move is expected to reduce remittance costs and improve settlement efficiency for businesses and individuals. To support this integration, the pact ensures compliance with data protection norms while enabling cross-border digital operations.

Indian financial institutions will also receive non-discriminatory treatment in credit ratings in New Zealand, addressing a key concern for lenders seeking global expansion. The agreement also promises higher foreign direct investment (FDI) limits and liberalised branch licensing norms in banking and insurance.

Currently, only two Indian banks operate in New Zealand, while Kiwi institutions have no presence in India. This is a gap the FTA aims to close. The liberalisation measures are expected to encourage New Zealand’s financial firms to explore India’s fast-growing market, while giving Indian players access to a developed regulatory environment.

New Zealand Prime Minister Christopher Luxon confirmed the conclusion of the FTA with India on Monday, adding that it will cut or eliminate tariffs on most New Zealand exports. The agreement is forecast to raise New Zealand’s exports to India by $1.1 billion-$1.3 billion a year over the next two decades.

It will also remove or reduce tariffs on about 95% of goods exported from New Zealand, PM Luxon said in a post on 'X' (formerly Twitter). Services have emerged as the centerpiece of the India–New Zealand FTA.

New Zealand will now grant nearly 5,000 temporary work visas to Indian nationals for periods of up to three years in sectors such as IT, engineering, healthcare, education, yoga, culinary arts, and music.