India’s free-trade agreement (FTA) with New Zealand, set to come into force on Tuesday, is expected to boost bilateral trade, diversify export markets and strengthen India’s trade resilience amid geopolitical uncertainties. The agreement marks India’s second trade deal in the Oceania region after Australia, with both countries targeting a doubling of bilateral trade by 2030.
Bilateral trade between India and New Zealand has so far remained modest at around $1.2 billion annually. The FTA is expected to expand the range of goods traded by reducing tariffs and improving market access for businesses in both countries.
Negotiations for the agreement began in March 2025 and concluded in December, making it one of India’s fastest-negotiated trade deals. The two countries signed the pact in April 2026.
Under the agreement, New Zealand will provide duty-free access across 100 per cent of tariff lines for Indian exports, covering the entire value of India’s exports to the country. Products benefiting from immediate zero-duty access include pharmaceuticals, marine products, textiles, chemicals, leather and footwear, gems and jewellery, and electronic goods. Tariffs on engineering goods, plastic articles and agricultural products will also be eliminated under the agreement.
The concessions come amid a decline in India’s exports to New Zealand for two consecutive financial years. Exports fell nearly 3 per cent year-on-year to $192.53 million during April–July, according to the latest country-wise data from the Department of Commerce.
The agreement also includes an investment commitment of $20 billion from New Zealand over 15 years.
India has offered tariff concessions on 70 per cent of tariff lines, covering 95 per cent of New Zealand’s export value to the Indian market. However, sensitive domestic sectors have been protected from tariff liberalisation. Gems and jewellery, copper articles, dairy products, vegetables, sugar and artificial honey are among the excluded products.
Certain products, including Manuka honey, wine, kiwi fruit and milk albumin, will receive conditional concessions under tariff-rate quotas (TRQs).
On Saturday, the Ministry of Finance notified the first batch of preferential tariff rates for New Zealand goods, which will take effect on Tuesday. The notified products include wine, Manuka honey, kiwi fruit and sheep meat.
Under the notification, qualifying kiwi consignments priced at or above $2.50 per kg will attract a basic customs duty of 15 per cent. Milk albumin has been allocated a tariff-rate quota of 200 metric tonnes at a reduced in-quota duty rate of 10 per cent.
Manuka honey with a cost, insurance and freight (CIF) value of $30 per kg or above will attract a concessional basic customs duty of 51 per cent, subject to certification by New Zealand’s Ministry for Primary Industries. Eligible consignments will be covered by a tariff-rate quota of 40 metric tonnes.
The FTA is expected to strengthen market access for Indian exporters while creating new opportunities for trade and investment between the two countries. It also supports India’s broader strategy of diversifying export destinations and reducing dependence on a limited number of markets.