India-New Zealand FTA to take effect on October 20, making all Indian exports duty-free

The India-New Zealand Free Trade Agreement (FTA) will come into force on Tuesday, October 20, eliminating tariffs on Indian merchandise exports to New Zealand and marking the seventh trade pact operationalised by India in five years, Commerce and Industry Minister Piyush Goyal said on Monday.

“We will start tomorrow on the auspicious day of Dussehra,” Goyal said, referring to the Hindu festival that marks the culmination of Navratri.

Under the agreement, Indian merchandise exports will receive zero-duty access to the New Zealand market from the first day of implementation. New Zealand has also committed to investing $20 billion in India over the next 15 years, Goyal told a gathering of Indian exporters.

New Zealand Trade Minister Todd McClay joined the event virtually to mark the agreement’s operationalisation. He said 57% of New Zealand’s exports to India would become tariff-free immediately, with further concessions to be phased in over time.

Bilateral trade target set at Rs 35,000 crore by 2030

Commerce Secretary Rajesh Agrawal said the agreement would help India and New Zealand double their bilateral trade to Rs 35,000 crore by 2030.

The FTA establishes a broad framework for economic cooperation covering market access, agricultural productivity, investment, talent mobility, sports, tourism and people-to-people ties, according to a Commerce Ministry official.

The agreement is also expected to expand opportunities for Indian businesses in New Zealand by removing tariffs on goods that previously faced duties of up to 10%. These include ceramics, carpets, automobiles and auto components.

The pact is part of India’s efforts to widen access to overseas markets and strengthen trade ties amid global economic uncertainty. India and New Zealand signed the agreement on April 27, 2026, after completing negotiations that began on March 16, 2025, in just nine months. Both countries completed their ratification formalities on September 21.

New Zealand exporters to benefit from tariff cuts

For New Zealand, the agreement provides immediate tariff relief on 57% of its exports to India, including timber, wool, sheep meat and coal. Over time, 95% of New Zealand’s current exports are expected to receive preferential access to the Indian market, through full tariff elimination or reductions.

New Zealand’s forestry and wood exports will benefit from substantial immediate concessions, with more than 95% of these exports becoming eligible for duty-free entry. Sheep meat, wool and coal will also receive immediate tariff elimination.

New Zealand exporters will gain preferential quota access for apples, kiwifruit and albumins, a group of proteins derived from dairy products. These concessions are designed to expand access to the Indian market while managing imports through specified quotas.

Wine exporters will also benefit from lower duties. Tariffs on New Zealand wines, currently at 150%, will be reduced over 10 years to either 25% or 50%, depending on the product’s value.

The agreement also provides for tariff reductions on other products over time, widening market access for New Zealand businesses.

McClay said the agreement would “level the playing field and unlock access for Kiwi businesses in one of the fastest growing markets” in the world.

Calling the pact a “high quality agreement”, he said it would provide greater confidence to businesses in both countries at a time of global economic uncertainty.

India protects farmers and sensitive sectors

Goyal said India had protected the interests of domestic farmers and the dairy sector while selectively drawing on New Zealand’s strengths in efficient farming practices.

India has excluded several sensitive agricultural products from the agreement, including onions, chickpeas, peas, corn, almonds, artificial honey and sugar.

The government has also identified opportunities for Indian farmers to benefit from New Zealand’s expertise in agriculture and allied activities. Citing kiwifruit cultivation and Manuka honey production, Goyal said technology transfer, improved pollination methods and modern beekeeping systems could help Indian farmers improve productivity.

The agreement is expected to create opportunities for agricultural cooperation without opening up protected domestic sectors to unrestricted imports.

Services exports and skilled workers to gain opportunities

Beyond merchandise trade, the agreement is expected to boost India’s services exports and create opportunities for skilled Indian workers.

A Commerce Ministry official said India could emerge as a key supplier of skilled professionals to New Zealand in areas such as information technology, engineering, healthcare, education and construction.

Opportunities are also expected in traditional wellness and cultural sectors, including Ayurveda, yoga, naturopathy, Unani, Siddha and homoeopathy (AYUSH). Yoga instructors, chefs and music teachers are among the professionals who could benefit from expanded cooperation.

The pact also covers talent mobility and people-to-people exchanges, broadening the scope of bilateral ties beyond goods and investment.

For New Zealand investors, India offers a competitive manufacturing environment and access to a large domestic market. The Indian government is setting up dedicated investment facilitation desks to assist investors from New Zealand.

The $20 billion investment commitment over 15 years is expected to strengthen economic links and support investment flows into India.

Agreement follows nine months of negotiations

India and New Zealand concluded negotiations for the FTA in nine months, beginning on March 16, 2025, and signing the agreement on April 27, 2026. The two countries completed the required ratification procedures on September 21, clearing the way for its implementation on October 20.

The pact provides for duty-free access for Indian merchandise exports to New Zealand from day one, while New Zealand will receive immediate concessions on 57% of its exports to India, with further tariff reductions and preferential quotas introduced over time.

With the agreement now entering into force, both countries are seeking to expand trade, encourage investment and deepen cooperation across agriculture, services, manufacturing and skilled-worker mobility, with the goal of doubling bilateral trade by 2030.