The agreement is the third struck by New Delhi this year after deals with the UK and Oman

India and New Zealand have concluded a pact aimed at expanding economic ties and unlocking the full potential of trade between the two nations.

Trade between New Delhi and Wellington stood at $2.4 billion in 2024, with services alone accounting for $1.24 billion, led by travel, IT, and business services, India's Commerce Ministry said in a statement on Monday.

"My friend PM Christopher Luxon and I had a very good conversation a short while ago following the conclusion of the landmark India-New Zealand Free Trade Agreement," Indian Prime Minister Narendra Modi posted on X on Monday.

The agreement was concluded in just nine months and "reflects a strong political will and shared ambition to deepen economic ties between our two countries," Modi added.

Negotiations for a pact started during Luxon's visit to India in March.

New Zealand has committed to invest $20 billion in India over the next 15 years to boost manufacturing, infrastructure, services, innovation, and employment, the statement said.

The pact also envisages new temporary employment entry visas for Indian professionals, with a quota of 5,000 at any given time and a stay of up to three years in New Zealand.

A formal agreement between the two countries is likely to be signed in three months, the Economic Times reported.

The agreement is the third free trade deal signed by India this year, after a pact with the United Kingdom in July and Oman last week.

The development also comes as India is engaged in talks with the US for a trade deal, after President Trump slapped 50% tariffs in August, half of which are punitive levies for New Delhi's purchase of Russian oil.

Earlier this month, Trump threatened to impose additional tariffs on India, accusing it of dumping rice into the US.

New Delhi is also seeking a preferential trade agreement with Mexico to mitigate a tariff hike of up to 50%, as well as with a dozen other countries or trading blocs.