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27 May 2026 India and New Zealand sign free trade agreement
On 27 April 2026, India and New Zealand signed a landmark India-New Zealand Free Trade Agreement (IN-NZ FTA or the FTA) at New Delhi, described by the Government of India as a "once-in-a-generation agreement" aimed at boosting exports, micro, small and medium enterprises (MSMEs), investment flows, skills mobility and economic cooperation. Though negotiations for an FTA were initially launched in 2010, renewed negotiations commenced in March 2025 and concluded in December 2025. The IN-NZ FTA is a comprehensive, modern trade agreement covering trade in goods and services, investment facilitation, mobility of professionals and students, customs and trade facilitation, sanitary and phytosanitary (SPS) measures, technical barriers to trade (TBT), intellectual property rights and institutional cooperation. A defining feature of the agreement is zero-duty market access for 100% of Indian exports to New Zealand from the date of entry into force, while 95% of New Zealand's current exports will be tariff free or have sharply reduced tariffs. Tariffs will be fully eliminated immediately on day one for more than half of New Zealand's exports and for over 80% once the FTA is fully phased in. The average tariff applied to New Zealand's current exports will reduce to approximately 3%. This extensive scope reflects the parties' intention to move beyond traditional tariff liberalization and establish a framework supporting deeper economic engagement. Trade between the two countries increased from US$873m in 2023-24 to US$1.3b in 2024-25, representing approximately 49% in growth. Exports to New Zealand totaled US$711m in 2024-25, representing approximately 32% growth over the prior year. The services trades generated US$634m in 2024, representing approximately 13% growth over the prior year. Under the FTA, New Zealand will eliminate customs duties on 100% of its tariff lines, providing immediate zero-duty access to all Indian exports upon entry into force, subject to compliance with applicable Product-Specific Rules of Origin. Pre-FTA tariffs in New Zealand ranged from 0% to 10%; 58% of tariff lines are already tariff-free, with peak 10% duties applied on selected industrial and consumer products. Thus, the average applied tariff of 2.2% in 2025 will become zero due to the FTA's coming into force.2 The removal of these duties is expected to improve the competitiveness of Indian goods in the New Zealand market, supporting supply-chain diversification and contributing to potential downstream benefits for New Zealand consumers through greater product choice and more competitive pricing, particularly for Indian-made electrical goods, machinery, fabrics and textiles.
The FTA is expected to deliver tariff cost savings for New Zealand exporters, with annual savings estimated of approximately US$43m initially, increasing to approximately US$62m upon the full phase-in of the FTA.3 India has offered tariff liberalization on 70.03% of tariff lines, covering approximately 95% of New Zealand's exports to India by value, while excluding 29.97% of tariff lines to protect sensitive domestic sectors.
Wine: Tariffs currently as high as 150% will be progressively reduced to 25% or 50% (depending on product value) over a 10-year period, alongside a most-favored-nation (MFN) commitment that is expected to ensure New Zealand benefits from future tariff concessions that India offers to other FTA partners.4 Sheep meat: The 33% tariff's removal upon the FTA's entry-into-force is expected to improve New Zealand's competitive position in the Indian market, aligning tariff treatment with that of Australia. Seafood: Duty-free access will be available for most seafood exports, including mussels and salmon, over a seven-year period. Fruit: A 50% tariff cut applies for large quotas of apples. Duty-free access applies for kiwifruit within a quota, and tariffs are halved for exports outside they quota. Duty-free access applies for cherries, avocados, persimmons and blueberries, over a 10-year period. Manuka honey: Tariffs will fall from 66% to 16.5% over five years, representing a notable expansion opportunity. Dairy-related products: Although India has retained protections for sensitive dairy sectors, New Zealand albumins (milk protein products) will benefit from a 50% tariff reduction within a quota aligned to average historical trade volumes. Forestry and wood products: Duty-free access will apply immediately to more than 95% of exports, with remaining products transitioning to zero tariffs over seven years. Market access for select New Zealand agricultural products (notably Manuka honey, apples, kiwi fruit and albumins) is governed through TRQs combined with minimum import prices, seasonal windows and safeguard mechanisms with monitoring through a Joint Agriculture Productivity Council. These are complemented by an Agricultural Productivity Partnership, including Centers of Excellence and Joint Action Plans focused on productivity, quality enhancement and farmer income protection. One of the most commercially significant structural features of the TRQ mechanism is that the FTA places the quota administration function primarily in New Zealand's hands. Under the agreed terms of TRQ implementation, New Zealand's competent authority is expected to issue export certificates to eligible New Zealand exporters for TRQ-covered products such as apples, kiwifruit, Manuka honey and albumins. The corresponding obligation on India's side is clearly defined and limited in scope. The FTA provides that India will issue TRQ authorizations on demand, conditional only on the importer's presentation of a valid export certificate, with no additional requirements, conditions or restrictions. As a practical matter, this means that an Indian importer identified as the consignee on a New Zealand export certificate should, in principle, receive the in-quota preferential tariff authorization from India on demand and without further procedural impediments. This design converts what might otherwise be a nominal tariff concession into a legally enforceable and commercially reliable entitlement, grounded directly in the treaty text, subject to implementation consistency and administrative practice.
This calibrated approach defines the scope of preferential market access under the FTA, balancing trade liberalization objectives with domestic policy considerations, while providing businesses operating across India-New Zealand supply chains with greater clarity and certainty when assessing eligibility and compliance requirements. The FTA is expected to support employment generation and investment-led growth across both economies, with momentum anticipated in labor-intensive and manufacturing-led sectors. In India, this includes textiles, apparel, leather, footwear, marine products and MSME-driven manufacturing clusters, with the potential to create downstream opportunities for integrated India-New Zealand supply chains. One key feature of the agreement is New Zealand's commitment to facilitate and promote up to US$20b in investment into India over a 15-year period, targeting manufacturing, infrastructure, renewable energy, agri-technology, innovation and emerging technologies. The FTA includes a rebalancing clause to address any material shortfall in investment delivery. The Investment Cooperation and Promotion Chapter supports cross-border engagement through structured cooperation activities such as trade delegations, workshops and investment promotion initiatives. As part of these commitments, India will establish a dedicated New Zealand Investment Desk to support New Zealand investors operating in India, assisting across the investment life cycle and helping to reduce on-the-ground regulatory and administrative barriers. Collectively, these measures are intended to strengthen investment-linked supply chains and support sustained trade and export growth within a facilitative framework. New Zealand has extended commitments across 118 services sectors, with MFN treatment in 139 sub-sectors, covering areas such as computer services, professional services, education, financial services, telecommunications, construction, distribution and tourism. Sectors of interest to New Zealand, in which India has undertaken commitments, include engineering services, environmental service, tertiary and adult education, audio-visual services. In particular, the health mobility and traditional medicine annex sets up a process for Rongoa Maori practitioners (i.e., providing holistic health services) to engage with the Indian market. New Zealand has introduced the Temporary Employment Entry (TEE) visa pathway, enabling up to 5,000 Indian professionals at any given time to work in New Zealand for up to three years, including professionals in information technology (IT), engineering, healthcare, education, construction, AYUSH, yoga, culinary and creative occupations. The Movement of Natural Persons (MNP) annex provides contractual service supplier and intra-corporate transferee pathways enabling New Zealand professionals to access the Indian market, subject to agreed eligibility criteria and domestic regulation. Indian students may work up to 20 hours per week in New Zealand during their studies. Post-study work visas of up to three years for Science, Technology, Engineering and Math (STEM) Bachelor's and Master's graduates, and up to four years for doctoral graduates, subject to domestic immigration laws and procedures of New Zealand. Each year, 1,000 young Indians may live and work in New Zealand for up to 12 months, promoting youth mobility and skill development. The FTA enables consideration of Good Manufacturing Practice (GMP) and Good Clinical Practice (GCP) inspection reports from comparable regulators (United States Food & Drug Administration, European Medicines Agency, United Kingdom Medicines and Healthcare products Regulatory Agency, Health Canada, etc.), subject to sectoral regulations, with the potential to reduce duplicative inspections and facilitate faster market entry. Cargo clearance is expected to be facilitated within defined timeframes, with expedited treatment envisaged for express and perishable consignments (including potential clearance within 24 hours), subject to applicable risk management and documentation requirements. Authorized Economic Operators (AEOs) are expected to be accorded facilitative benefits, with cooperation/potential mutual recognition envisaged under the FTA. Automation, digitization and paperless single-window systems (i.e., allowing all required regulatory documents and data for cross-border trade to be submitted through a centralized electronic entry point) are expected to be strengthened and/or further aligned across both New Zealand and India. And advance rulings are expected to be available, or continue to be available, in both jurisdictions. Dedicated chapters in the FTA provide for electronic SPS certification, simplified import permits and fast-tracking of market access applications, balancing trade facilitation with health and safety objectives. The FTA strengthens the intellectual property framework between India and New Zealand, including through enhanced protection and recognition of geographical indications (GIs). New Zealand has committed to amending its GI legislation within 18 months of the FTA's entry-into-force, subject to completion of its domestic legislative process, to allow for the registration of GIs beyond wines and spirits. This is expected to enable the protection of recognized Indian GIs such as Darjeeling tea, Basmati rice and regional handicrafts in the New Zealand market, while providing greater certainty for producers, exporters and importers operating across India-New Zealand supply chains.
Tariff concessions and trade-facilitation benefits under the India-New Zealand FTA are expected to become operative upon completion of domestic ratification procedures, amendments to applicable laws and issuance of corresponding customs notifications. Businesses should validate tariff staging, product-specific rules of origin, TRQ conditions and services schedules based on the final legal text once formally notified. Early mapping of tariff schedules and origin requirements is recommended. FTAs are inherently iterative, with initial commitments establishing a foundation for progressive liberalization. Future upgrades to the IN-NZ FTA will be important to unlock further commercial potential, reflecting the agreement's phased and calibrated approach to market access, together with its built-in review mechanisms, which provide a structured pathway for further liberalization over time. In particular, sectors of strong commercial interest, including dairy and broader agri-food exports, have been subject to more gradual liberalization given their sensitivity in India. Accordingly, future upgrade rounds will likely expand access through mechanisms such as increased quotas, tariff reductions or accelerated phase-out timelines, thereby enhancing the practical utilization of existing concessions. Addressing non-tariff barriers, including SPS measures and regulatory approval processes, will be equally important, as these are likely to remain the main factors limiting actual trade flows despite the reduction of tariffs. These areas are therefore likely to form a key focus point in future upgrade negotiations aimed at enhancing the effective operation of the agreement.
Document ID: 2026-1136 | ||||||||
