New Zealand Trade Minister Phil Goff said in Wellington Monday agreement in principle to commence a study into the implications of a free trade agreement was a useful outcome of discussions with his Indian counterpart, Kamal Nath.

With economic growth averaging around eight percent per annum over the last three years, India is becoming an increasingly important market and trading partner for New Zealand.

"In fact, with exports to India rising to 355 million NZ dollars (250 million U.S. dollars) in the year to February 2007, it is currently our second fastest growing export destination," said Goff.

He said rapid growth in tourist and student numbers from India are also making a significant contribution to New Zealand's economy.

While Goff said tariffs on key New Zealand food and beverage items are high and food safety controls, which exceed international standards, can prevent trade in areas such as dairy and meat.

The study of a free trade agreement will be progressed later this year in a planned Joint Trade Commission meeting between the two countries, which is likely to be held in September, said Goff.