Negotiations on the Financial Services Annex commenced in May 2025 and evolved through sustained engagement and technical discussions. Drawing from India’s experience in previous free trade agreements, the annex has been developed into a comprehensive framework consisting of 18 articles, going well beyond standard commitments under the World Trade Organization’s General Agreement on Trade in Services (GATS).
The annex provides institutional and regulatory clarity for financial service suppliers, facilitating deeper integration of the financial systems of both countries. Officials described the agreement as mutually beneficial, with safeguards that preserve regulatory autonomy while encouraging cross-border collaboration.
Boost to Digital Payments and Fintech Cooperation
A key highlight of the Financial Services Annex is the emphasis on electronic payments and real-time transaction infrastructure. India and New Zealand have agreed to collaborate on developing interoperable domestic payment systems and enabling real-time cross-border remittances and merchant payments through integrated fast payment systems.
This provision is expected to create new opportunities for Indian payment service providers by leveraging India’s globally recognised digital payment infrastructure such as the Unified Payments Interface and platforms developed by the National Payments Corporation of India. It also strengthens remittance channels for the Indian diaspora in New Zealand.
Regulatory Innovation and Data Protection
The annex includes dedicated provisions on financial technology and regulatory innovation. Both countries have committed to cooperation through regulatory and digital sandbox frameworks, enabling cross-border testing of fintech solutions. This collaboration positions India as a potential fintech hub within the bilateral partnership.
On data governance, the agreement recognises each country’s right to regulate the transfer, processing and storage of financial information. It balances facilitation of cross-border digital operations with strong protections for data sovereignty, consumer privacy and regulatory oversight.
Market Access and Non-Discrimination
Indian financial institutions will benefit from provisions ensuring non-discriminatory treatment in New Zealand. The annex safeguards Indian banks, insurers and financial service providers against arbitrary credit assessment or regulatory practices, ensuring parity with domestic institutions.
In addition, the schedules of specific commitments include enhanced foreign direct investment limits in banking and insurance, alongside a liberalised bank branch licensing framework. Under the agreement, up to 15 bank branches may be established over a four-year period, expanding beyond earlier commitments.
Back-Office Services and Investment Opportunities
The annex also promotes the provision of back-office and support services, leveraging India’s strengths in information technology and business process outsourcing. This will allow financial institutions to centralise operations in India, enabling cost-efficient service delivery while supporting employment and growth in India’s IT and financial services sectors.
Currently, two Indian banks operate in New Zealand with four branches, while New Zealand has no banking or insurance presence in India. The agreement is expected to catalyse increased bilateral investment, institutional presence and services delivery across both markets.