India-New Zealand FTA kicks in: Zero duty, more opportunities - what's in it for India?

India - New Zealand trade deal kicks in

NEW DELHI: The India-New Zealand Free Trade Agreement (FTA) came into force on Tuesday opening up new opportunities for Indian exporters, manufacturers, farmers, professionals and businesses.

The agreement provides 100% duty-free access to the New Zealand market for all Indian export tariff lines, removing peak tariffs of up to 10%.Signed on April 27, 2026, the pact aims to deepen economic ties between the two countries and double bilateral trade in goods and services to NZ$7 billion (Rs 35,000 crore) by 2030. Negotiations were launched on March 16, 2025, and concluded on December 22, 2025, within nine months.The agreement is India's 17th operational FTA and the seventh trade pact to come into force in the past five years. It covers goods, services, investment, agriculture, skills and mobility, while retaining safeguards for sensitive sectors.

What's in it for India?

1. Duty-free access for Indian exportersAll Indian goods can enter New Zealand duty-free, giving Indian exporters a competitive advantage and placing them on a level playing field with New Zealand's other FTA partners.

Textiles, apparel, leather, footwear, gems and jewellery, engineering goods, automobiles and auto components, chemicals, pharmaceuticals, agricultural products and processed foods are among the sectors expected to benefit.Duty-free access for wooden logs, coking coal and metal waste and scrap will strengthen manufacturing and MSME supply chains. Streamlined regulatory processes are expected to benefit pharmaceutical and medical device industries.2. A boost for MSMEs and small businessesThe agreement opens New Zealand's market to micro, small and medium enterprises (MSMEs), women-led businesses, start-ups, artisans and first-generation entrepreneurs.Zero duties and faster customs processes are expected to reduce landed costs and help Indian businesses expand their customer base. Cooperation will improve access to trade-related information and links with New Zealand's small and medium enterprise ecosystem, with particular attention to businesses owned by women and young people.New Zealand has also committed to facilitating the registration of Indian geographical indications (GIs), creating opportunities to protect products associated with rural artisans and traditional industries.3. New opportunities for farmersThe Agricultural Productivity Partnership will bring technology, training and global best practices to Indian agriculture, extending cooperation beyond tariff concessions.Dedicated action plans for apples, kiwifruit and honey will support better orchard management, reduce post-harvest losses and improve productivity and farm incomes. Cooperation will also cover horticulture, forestry, livestock and fisheries.New Zealand will provide technical assistance to establish Centres of Excellence for kiwifruit, apples and honey. Phase I sites for kiwifruit centres have been identified at Pfutsero in Nagaland and Magra in Uttarakhand.

Two apple centres are proposed in Himachal Pradesh and Uttarakhand, while honey centres are envisaged in Uttar Pradesh and West Bengal.Tariff rate quotas for apples, kiwifruit and Mānuka honey are linked to the delivery of action plans and overseen by a Joint Agriculture Productivity Council, linking market access with farmer welfare.4. More opportunities for Indian professionals and studentsNew Zealand has offered market access in around 118 services sectors and Most-Favoured-Nation commitments in about 139 sub-sectors, its most extensive services offered under any trade agreement to date.For the first time, dedicated access has been provided for health and traditional medicine services, including Ayurveda, yoga and other AYUSH systems.Indian youth and professionals will have access to 5,000 Temporary Employment Entry visas and 1,000 Working Holiday visas annually.There will be no numerical cap on Indian students. Post-study work rights will extend to three years for STEM bachelor's and master's graduates and up to four years for doctoral scholars.5. Investment, manufacturing and employmentNew Zealand has committed to facilitating $20 billion in investment into India over more than 15 years.The investment is expected to benefit agriculture, manufacturing, infrastructure and start-ups, supporting innovation, entrepreneurship and employment generation under the Make in India vision.Provisions covering duty-free inputs, bilateral cumulation, customs facilitation and investment promotion could encourage deeper integration into value chains and improve investment conditions.6. Safeguards for sensitive Indian sectorsDairy, sugar, edible oils and key agricultural commodities remain excluded from concessions to protect farmers, dairy producers, fisherfolk and rural communities.Rules of Origin, a bilateral safeguard mechanism and anti-circumvention provisions aim to ensure that benefits reach genuine Indian exporters.7. A larger trade partnershipBilateral trade fell about 11% to $1.15 billion in 2025-26, from $1.3 billion in the previous fiscal year.

India's exports stood at $566.51 million, while imports were $589.1 million, leaving a trade deficit of $22.59 million.The FTA seeks to reverse the limited scale of trade and expand economic engagement. The first-ever export of a JCB machine from India to New Zealand was flagged off at the entry-into-force ceremony, with further product flag-offs planned across agriculture, gems and jewellery, engineering, sporting goods, footwear and leather.Commerce minister Piyush Goyal said that the agreement would create opportunities for exporters, particularly MSMEs, artisans, farmers and women entrepreneurs. The pact also supports India's strategic partnership with New Zealand and the vision of Viksit Bharat 2047, with its success ultimately depending on businesses converting improved market access into actual trade and investment.