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New Delhi: India and New Zealand have agreed to expand cooperation in financial services by facilitating opening of bank and insurance branches and easing norms for digital payments, the Union Finance Ministry said on Tuesday.
The decision to collaborate in the areas of financial services is a part of the trade in services chapter under the Free Trade Agreement (FTA), which is likely to be signed by March 2026. The two countries announced the conclusion of the FTA deal on Monday.
According to a statement issued by the Finance Ministry, the financial services annex of the India-New Zealand FTA was finalised during the last round of negotiations held on December 10.
The ministry said the deal will provide the “necessary institutional and regulatory framework to accelerate bilateral collaboration, facilitate market access and catalyse deeper integration of the two economies’ financial systems”.
As part of the deal, the two countries have agreed to collaborate on developing domestic payments interoperability and supporting realtime cross-border remittances and merchant payments through integrated “fast payment systems”.
Digital payments
This provision directly strengthens India’s digital payments ecosystem and fintech sector, enhances remittance flows from the Indian diaspora, creates market opportunities for Indian payment service providers and leverages India’s technological expertise in digital payment systems such as UPI and NPCI, the ministry said.
India has agreed to ease norms to facilitate opening of branches by New Zealand’s banks. Under the liberalised bank branch licensing framework, India has agreed to allow up to 15 bank branches of New Zealand to be established in India over a four-year period. India has also offered higher FDI limits in banking and insurance New Zealand’s firms.
At present, two Indian banks — Bank of Baroda and Bank of India — operate in New Zealand through subsidiaries, while New Zealand has no banking or insurance presence in India. No Indian insurance companies have established operations in New Zealand.
“This FTA, by establishing clear market access commitments, regulatory transparency and bilateral cooperation frameworks, will facilitate increased bilateral investment, institutional presence and services delivery. The agreement will serve as an important catalyst for broadening India’s financial services presence in New Zealand and welcoming New Zealand financial institutions to India’s growing and dynamic financial services markets,” the Finance Ministry said.
The deal will pave the way for establishment of back-office and financial services support functions of New Zealand’s companies in India. One of the key elements of the deal is related to the collaboration in back-office and support functions. This will help the Indian business process outsourcing firms.
“This will enable cost-efficient delivery of financial services through centralised back-office operations in India, will also support growth in India’s financial services, IT and business process outsourcing sectors. This demonstrates mutual recognition of India’s critical infrastructure capacity for the bilateral financial services partnership,” the ministry said.
What the terms say
The two countries to collaborate on developing domestic payments interoperability To support realtime cross-border remittances and merchant payments through integrated 'fast payment systems' India to allow up to 15 bank branches of New Zealand to be set up here over a four-year period The deal to make way for establishment of back-office and financial services support functions of New Zealand firms in India
The two countries to collaborate on developing domestic payments interoperability n India to allow up to 15 bank branches of New Zealand to be set up here over a four-year period n The deal to make way for establishment of back-office and financial services support functions of New Zealand firms in India