India, New Zealand Finalise FTA Financial Services Annex to Boost Market Access

Both nations recognise the growing importance of the financial services sector in shaping resilient and globally interconnected economies.

India and New Zealand have successfully concluded negotiations on the Financial Services Annex of the India–New Zealand Free Trade Agreement (FTA) on December 22, 2025, marking a major milestone in strengthening bilateral economic engagement and strategic cooperation. The achievement follows the final round of discussions held on December 10, 2025, and signifies a shared commitment to deepen collaboration in financial services, fintech innovation and regulatory harmonisation.

Both nations recognise the growing importance of the financial services sector in shaping resilient and globally interconnected economies. The Financial Services Annex provides a comprehensive and future-ready institutional and regulatory framework aimed at enabling greater market access, improving competitiveness and driving financial integration between the two countries. By establishing clear commitments and cooperative mechanisms, the agreement positions India and New Zealand to leverage each other’s strengths in banking, insurance, fintech, payments and support services.

A notable feature of the annex is its evolution beyond standard WTO GATS commitments, expanding to 18 articles that capture modern financial sector priorities, technological innovation and data governance requirements. The key advancements include:

Digital Payments and Real-Time Cross-Border Transactions

India and New Zealand have agreed to collaborate on developing domestic payments interoperability and supporting real-time cross-border remittances through integrated Fast Payment Systems (FPS). This cooperation directly enhances India’s fintech ecosystem, strengthens remittance flows from the Indian diaspora, and creates new opportunities for Indian payment service providers. It also positions India’s UPI and NPCI technologies as critical pillars of global digital payments interconnectivity.

Fintech Collaboration and Regulatory Innovation

The annex includes provisions for intensified cooperation in financial technology, with both countries committing to exchange knowledge and integrate insights from their Regulatory Sandbox and Digital Sandbox frameworks. This strengthens India’s position as a global fintech innovation hub and enables Indian fintech start-ups to access New Zealand’s developed regulatory environment. The collaboration will also facilitate cross-border testing of new financial products and solutions.

Financial Information Transfer, Data Sovereignty and Consumer Protection

The agreement affirms the right of both countries to maintain domestic laws governing the transfer, processing and storage of financial data. While promoting digital operations and cross-border services, it ensures strong regulatory oversight, consumer privacy safeguards and full protection of financial information sovereignty.

Credit Rating Practices and Non-Discrimination

A major gain for India is the inclusion of provisions that protect Indian banks, insurers and financial institutions from arbitrary or discriminatory credit assessment practices in the New Zealand market. This ensures a level playing field, removes barriers to market entry, and supports Indian institutions seeking to expand their global footprint.

Back-Office Services and Support Functions

Recognising India’s globally competitive IT and business process services sector, the annex commits both sides to enabling the provision of back-office and support services. This will boost India’s outsourcing, financial services and IT sectors while providing cost-efficient operational models for New Zealand firms. It reflects mutual confidence in India's technology and infrastructure capabilities as a backbone for bilateral financial cooperation.

Enhanced FDI Limits and Bank Branch Expansion

India has offered progressive market access commitments in banking and insurance sectors, reflecting a forward-looking liberalisation strategy. These include:

• Enhanced FDI limits in banking and insurance

• A liberalised framework allowing up to 15 bank branches over four years (increased from the earlier GATS commitment of 12)

• These measures will support Indian banks and insurers in expanding their presence in New Zealand while providing New Zealand institutions structured pathways into India’s rapidly growing financial market.

Strengthening Institutional Presence

Currently, India has a modest presence in New Zealand’s financial landscape, with Bank of Baroda and Bank of India operating four branches between them. New Zealand, meanwhile, has no banking or insurance operations in India. The FTA rectifies this imbalance by establishing transparent, predictable and facilitative conditions for bilateral investment and market entry, encouraging both sides to establish or expand physical and digital operations.

A Forward-Looking Framework for the Future

The conclusion of negotiations signifies a shared vision of harnessing emerging opportunities in fintech, payments, regulatory harmonisation and cross-border service delivery. The Financial Services Annex provides clarity to financial institutions, ensures non-discriminatory treatment, strengthens data governance and promotes innovation-led growth.

It is expected to catalyse:

• Greater institutional presence in both markets

• Increased FDI in financial services

• Fintech collaborations and joint innovation initiatives

• Improved remittance efficiency and lower transaction costs

• A more integrated and resilient India–New Zealand financial ecosystem

As India expands its global economic footprint, the agreement reinforces its strategic objective of shaping global financial architecture while offering New Zealand meaningful access to one of the world’s fastest-growing financial markets.