India and New Zealand on Monday concluded negotiations on the Financial Services Annex of the India-New Zealand Free Trade Agreement (FTA), marking a significant step toward strengthening bilateral economic and strategic cooperation. The negotiations were formally concluded on December 22, following the final round of talks held on December 10.
Negotiations on the financial services annex began in May 2025 and evolved into a comprehensive framework comprising 18 articles, drawing on India’s experience from previous free trade agreements. The annex forms part of the Trade in Services chapter of the FTA and goes beyond standard commitments under the General Agreement on Trade in Services (GATS).
According to the Ministry of Finance, the agreement is forward-looking, balanced and designed to enhance cooperation in financial services, facilitate market access, and deepen integration between the two economies’ financial systems.
A key feature of the annex is cooperation on electronic payments and real-time transaction infrastructure. India and New Zealand have agreed to collaborate on developing domestic payment interoperability and enabling real-time cross-border remittances and merchant payments through integrated fast payment systems.
This provision is expected to strengthen India’s digital payments ecosystem and create market opportunities for Indian payment service providers by leveraging India’s expertise in platforms such as Unified Payments Interface (UPI) and the National Payments Corporation of India (NPCI). It is also expected to support remittance flows from the Indian diaspora in New Zealand.
The agreement also includes provisions on financial technology and regulatory innovation, with both countries committing to collaborate through regulatory and digital sandbox frameworks. This will facilitate cross-border fintech experimentation, knowledge exchange, and regulatory learning, while positioning India as a fintech hub within the bilateral partnership.
On data governance, the annex recognises each country’s right to maintain legislative and regulatory requirements for the transfer, processing and storage of financial information. The framework aims to facilitate cross-border digital operations by financial service suppliers while preserving regulatory control over data sovereignty and consumer privacy.
The agreement also addresses credit rating practices and non-discrimination. Indian financial institutions will receive treatment on par with New Zealand’s domestic institutions, protecting them from arbitrary or discriminatory credit assessments and regulatory actions that could restrict market access.
India and New Zealand have committed to supporting back-office and financial services support functions under the annex. This provision is expected to leverage India’s global leadership in information technology and business process services, enabling cost-efficient delivery of financial services through centralized operations in India. The move is likely to support growth in India’s IT, financial services and business process outsourcing sectors.
The schedules of specific commitments under the annex reflect enhanced market access and national treatment provisions in key banking and insurance sectors. India has offered increased foreign direct investment (FDI) limits in banking and insurance, along with a liberalised bank branch licensing regime that allows up to 15 bank branches to be established over a four-year period—an expansion from the earlier GATS limit of 12 branches.
These commitments are expected to facilitate the expansion of Indian banks, insurance companies and financial service suppliers into the New Zealand market, while positioning New Zealand’s financial institutions to tap into India’s rapidly growing financial services sector.
Currently, two Indian banks – Bank of Baroda and Bank of India – operate in New Zealand through subsidiary operations with a combined total of four branches. New Zealand does not yet have a banking or insurance presence in India, and no Indian insurance companies operate in New Zealand.
By establishing clear market access rules, regulatory transparency and cooperation mechanisms, the financial services annex is expected to catalyse greater bilateral investment, institutional presence and services delivery. The agreement is seen as an important step toward expanding India’s financial services footprint in New Zealand and encouraging New Zealand institutions to enter India’s dynamic financial markets.
The conclusion of negotiations underscores both governments’ commitment to deepening economic ties and harnessing emerging opportunities in the rapidly evolving global financial services landscape.
