A proposed free trade agreement with New Zealand could bolster bilateral ties significantly, India's commerce minister said on Tuesday, suggesting trade could grow 10-fold in just a decade.

India and New Zealand have restarted negotiations for an FTA after a decade-long hiatus, following a meeting between Prime Minister Narendra Modi and New Zealand's Prime Minister Christopher Luxon, who is on a visit to India.

The deal could expand trade ties in farm products, critical minerals, pharmaceuticals, and tourism, Trade Minister Piyush Goyal said at a gathering of business leaders.

Talks are taking place against a backdrop of mounting global trade tensions, after U.S. President Donald Trump's decision to impose reciprocal tariffs on imported goods from several countries, including India.

India is also accelerating efforts to secure trade agreements with the European Union and the United Kingdom.

"The huge amount of opportunity in innovation that comes out of New Zealand can reach the whole world through India," Goyal said. "Manufacturing (and) producing in India for the world at competitive prices can help us take this partnership to greater heights."

New Zealand expects an enhanced partnership with India in the fields of aerospace and renewable energy, among others, Luxon said.

"Let's drive this relationship forward, and I look forward to Prime Minister Modi signing that agreement in 60 days time," he said.

Bilateral trade between India and New Zealand stood at $1.7 billion in the 2023-24 financial year, which ended in March 2024.

(Reporting by Manoj Kumar, writing by Sakshi Dayal and Hritam Mukherjee; Editing by YP Rajesh and Rachna Uppal)