India-New Zealand FTA takes effect today, grants zero-duty access to all Indian goods

India's free trade agreement (FTA) with New Zealand will come into force on Tuesday, October 20, granting zero-duty access to all Indian goods entering the island nation while expanding opportunities for services, skilled professionals, investment and agricultural cooperation.

The agreement, which becomes operational at 12:01 am Indian time, marks the first FTA under which India will receive duty-free access across all tariff lines from the date of implementation.

Commerce and Industry Minister Piyush Goyal said the pact aims to increase bilateral trade in goods and services from approximately USD 2.4 billion to New Zealand dollar 7 billion, or around Rs 35,000 crore, by 2030.

The agreement also facilitates foreign direct investment of USD 20 billion from New Zealand into India over the next 15 years.

𝗭𝗲𝗿𝗼 𝗱𝘂𝘁𝘆 𝗼𝗻 𝗮𝗹𝗹 𝗜𝗻𝗱𝗶𝗮𝗻 𝗴𝗼𝗼𝗱𝘀

Under the agreement, New Zealand will eliminate import duties on 100 per cent of tariff lines, covering all existing Indian exports to the country.

The move will remove the tariff disadvantage faced by Indian exporters, who previously encountered import duties of up to 10 per cent on certain products.

Major beneficiaries include textiles, apparel, leather, footwear, pharmaceuticals, engineering goods, marine products, plastics, rubber, processed foods, fruits, vegetables, cereals, coffee, tea, cocoa and spices.

The elimination of tariffs is expected to improve the competitiveness of Indian products in the New Zealand market.

𝗜𝗻𝗱𝗶𝗮 𝗽𝗿𝗼𝘁𝗲𝗰𝘁𝘀 𝘀𝗲𝗻𝘀𝗶𝘁𝗶𝘃𝗲 𝘀𝗲𝗰𝘁𝗼𝗿𝘀

While New Zealand has offered full duty-free access, India has adopted a calibrated approach to tariff reductions to protect domestic industries and farmers.

India will provide tariff concessions on 70 per cent of its tariff lines, covering approximately 95 per cent of the current bilateral trade value.

The remaining 29.97 per cent of tariff lines have been placed on an exclusion list.

Sensitive products excluded from concessions include dairy items such as milk, cream, whey, yoghurt and cheese, along with several agricultural commodities, including onions, chana, peas, corn and almonds.

Other protected categories include sugar, artificial honey, certain animal products, edible oils, arms and ammunition, precious metals, finished jewellery, copper and aluminium products.

India has also introduced tariff-rate quotas, minimum import prices and safeguard measures for products such as apples, kiwifruit, manuka honey and albumins.

These provisions are intended to regulate imports while safeguarding domestic agricultural interests.

𝗡𝗲𝘄 𝗼𝗽𝗲𝗻𝗶𝗻𝗴𝘀 𝗳𝗼𝗿 𝗜𝗻𝗱𝗶𝗮𝗻 𝗽𝗿𝗼𝗳𝗲𝘀𝘀𝗶𝗼𝗻𝗮𝗹𝘀

The agreement provides Indian service providers improved access to 118 sectors and sub-sectors in New Zealand, including information technology, professional services, telecommunications, construction, education, financial services and tourism.

It also introduces temporary entry arrangements for Indian professionals and business visitors.

Employees transferred within the same company can stay for up to three years, while business visitors and workers installing or servicing equipment can stay for up to 90 days within a 12-month period.

Contractual service providers and independent professionals will be eligible for stays of up to 12 months.

A new temporary employment visa pathway will allow up to 5,000 skilled Indian workers at any given time to work in New Zealand for periods of up to three years.

The arrangement covers sectors such as IT, engineering, construction, education and healthcare, along with occupations including yoga instructors, chefs, music teachers and Ayush practitioners.

𝗔𝗴𝗿𝗶𝗰𝘂𝗹𝘁𝘂𝗿𝗮𝗹 𝗰𝗼𝗼𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻 𝘁𝗼 𝗲𝘅𝗽𝗮𝗻𝗱

The FTA establishes an agricultural productivity partnership between the two countries, with dedicated action plans for kiwifruit, apples and honey.

The initiative aims to improve agricultural productivity, product quality and technical cooperation in India.

The agreement also includes trade facilitation measures intended to reduce procedural delays and compliance costs.

Customs clearance timelines have been set at 48 hours for cargo and 24 hours for express and perishable consignments.

Digital certification and self-certification of rules of origin for eligible status holders will further simplify export procedures.

𝗡𝗲𝘄 𝗭𝗲𝗮𝗹𝗮𝗻𝗱 𝗲𝘆𝗲𝘀 𝗯𝗶𝗴𝗴𝗲𝗿 𝗜𝗻𝗱𝗶𝗮𝗻 𝗺𝗮𝗿𝗸𝗲𝘁

New Zealand Trade and Investment Minister Todd McClay said the agreement would create significant opportunities for exporters in several sectors.

"Once fully implemented, 95 per cent of New Zealand's current exports to India will benefit from tariff elimination or substantial tariff reductions, creating new opportunities across many of our key export sectors," he said.

Commerce Secretary Rajesh Agrawal emphasised that the focus must now shift towards converting the agreement's provisions into economic benefits.

"The job is now to see how we are able to take this FTA and translate this opportunity into actual benefits for our people," he said.

𝗚𝗼𝘆𝗮𝗹 𝗳𝗹𝗮𝗴𝘀 𝗼𝗳𝗳 𝗝𝗖𝗕 𝗲𝘅𝗽𝗼𝗿𝘁𝘀

Marking the implementation of the agreement, Goyal flagged off a small excavator manufactured by JCB India for export to New Zealand.

He said the company currently exports approximately 25 per cent of its production from India and urged it to increase the share to 50 per cent.

"I am giving them a target to increase it to 50 per cent. New Zealand is now the 140th export destination for them," Goyal said.

Bilateral merchandise trade between India and New Zealand declined around 11 per cent to USD 1.15 billion in 2025-26 from USD 1.3 billion in the previous financial year.

India's exports stood at USD 566.51 million, while imports totalled USD 589.1 million, resulting in a trade deficit of USD 22.59 million.

The FTA is expected to provide a framework for expanding trade and investment ties between the two countries while improving market access for businesses and professionals.