New Delhi: The signing of India-New Zealand Free Trade Agreement (FTA) on Monday signals both economic intent and strategic convergence. Finalized during the last round of talks held on December 10, and formally concluded on December 22, the agreement marks a major milestone in bilateral engagement, especially at a time when global financial systems are undergoing rapid digital and regulatory transformation. It reflects a shared intent to modernize financial cooperation and unlock new growth avenues for institutions in both countries.
The Financial Services Annex, which was agreed upon in the last phase of negotiations, is seen as one of the most forward-looking components of the India-New Zealand FTA. Going well beyond standard commitments under the WTO’s General Agreement on Trade in Services (GATS), the annex comprises 18 detailed articles designed to facilitate market access, enhance regulatory cooperation and promote technological integration between the two financial systems.
Electronic Payments, Real-Time Transaction Infrastructure
India and New Zealand have agreed to collaborate on domestic payments inter-operability and the development of real-time cross-border remittances and merchant payments through integrated Fast Payment Systems (FPS). The provision is expected to significantly strengthen India’s digital payments ecosystem and fintech sector.
By leveraging India’s globally recognised platforms such as the Unified Payments Interface (UPI) and the National Payments Corporation of India (NPCI), the agreement aims to enhance remittance flows from the Indian diaspora in New Zealand and create new market opportunities for Indian payment service providers.
Financial Technology, Regulatory Innovation
The annex places strong emphasis on fintech collaboration and regulatory innovation. Both countries have committed to learning from each other’s Regulatory Sandbox and Digital Sandbox frameworks, with provisions allowing cross-border applications and experimentation.
These commitments position India as a fintech hub within the bilateral partnership, enabling Indian fintech firms to collaborate with a developed economy while benefiting from regulatory knowledge exchange. The move also strengthens India’s own sandbox initiatives by aligning them with global best practices.
Transfer & Protection of Financial Information
Recognizing the sensitivity of financial data, both sides have reaffirmed their sovereign right to regulate the transfer, processing and storage of financial information. At the same time, the annex seeks to facilitate cross-border digital operations for financial service suppliers.
The balance struck ensures regulatory control over data sovereignty and consumer privacy, while allowing institutions to operate seamlessly across borders in an increasingly digital financial environment.
Credit Rating, Non-Discrimination
A key safeguard in the annex protects Indian financial institutions from arbitrary or discriminatory credit assessment practices in the New Zealand market. The provision ensures parity of treatment with New Zealand’s domestic institutions.
This is expected to ease market entry for Indian banks, insurers and other financial service suppliers, while preventing regulatory discrimination that could otherwise limit their operational capabilities.
Back-Office & Support Functions
India and New Zealand have also committed to supporting the provision of back-office and financial services support functions. This leverages India’s globally competitive information technology and business process services ecosystem.
The arrangement enables cost-efficient delivery of financial services through centralised back-office operations in India, supporting growth in India’s IT, financial services and business process outsourcing sectors. It also reflects mutual recognition of India’s critical infrastructure capacity in the bilateral partnership.
Increased FDI Investment Limits & Bank Branches
The schedules of specific commitments under the annex reflect progressive liberalisation on both sides, particularly in banking and insurance. India’s offers include enhanced foreign direct investment (FDI) limits in these sectors and a liberalised bank branch licensing framework.
Under the new arrangement, up to 15 bank branches may be established over a four-year period, an expansion from the earlier GATS limit of 12 branches. These commitments are expected to facilitate Indian financial institutions’ expansion into New Zealand, while positioning New Zealand’s banks and insurers to access India’s fast-growing financial services market.
The conclusion of the Financial Services Annex underscores the shared ambition of India and New Zealand to deepen economic ties in a rapidly evolving global financial landscape. The agreement is designed to provide greater market access, regulatory clarity and institutional cooperation.
At present, only two Indian banks — Bank of Baroda and Bank of India — operate in New Zealand through subsidiaries, with a combined four branches. New Zealand, meanwhile, has no banking or insurance presence in India, and no Indian insurers operate in New Zealand. By setting clear rules and cooperation frameworks, the FTA is expected to catalyse new investments, expand institutional presence and significantly broaden bilateral engagement in financial services.