India-New Zealand FTA to Expand Trade Ties and Market Access
India’s free-trade agreement (FTA) with New Zealand, scheduled to take effect on Tuesday, is anticipated to boost bilateral trade and further New Delhi’s diversification approach in the face of geopolitical uncertainties. It is the second trade agreement for India in the Oceania area, following Australia.
Trade with New Zealand on an annual basis has thus far been relatively modest at approximately $1.2 billion. The agreement's tariff concessions are anticipated to expand the trade basket, with both countries aiming to double their bilateral trade by 2030.
India and New Zealand began talks for the agreement in March 2025 and finished them in December, marking it as one of New Delhi’s quickest-negotiated trade agreements. This year, the agreement was signed by the two countries in April. It provides tariff-free entry for all categories of India’s exports to New Zealand, encompassing the entire export value.
From the very beginning, New Zealand has provided zero-duty access to Indian pharmaceuticals, marine products, textiles, chemicals, leather and footwear, gems and jewellery, and electronic goods. It has pledged to remove tariffs on agricultural products, plastic items, and engineering goods.
The concessions arise as India's exports to New Zealand have dropped for two straight financial years. According to the latest country-specific data from the Department of Commerce, shipments dropped almost 3 percent year-over-year to $192.53 million during April-July.
The deal also entails a $20 billion investment pledge from New Zealand over a period of 15 years.
India has provided duty reductions on 70 percent of tariff lines, encompassing 95 percent of New Zealand's export value to India, while excluding sensitive domestic sectors from tariff liberalization. Gems and jewelry, copper items, dairy goods, vegetables, sugar, and synthetic honey are included in the list of excluded items.
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India has proposed conditional concessions on Manuka honey, wine, kiwi, and milk albumin within tariff-rate quotas (TRQs).
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The Ministry of Finance released the initial set of tariff concessions for goods from New Zealand as part of the FTA. The preferential tariffs, applying to items such as wine, Manuka honey, kiwi, and lamb, will be implemented on Tuesday.
As per the announcement, kiwi shipments valued at $2.50 per kg or higher will incur a basic customs duty (BCD) of 15 percent. Milk albumin has been assigned a TRQ of 200 metric tonnes with a lowered in-quota duty rate of 10 percent.
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Manuka honey valued at $30 per kg or higher, with cost, insurance, and freight included, will incur a reduced BCD of 51 percent, contingent upon certification from New Zealand’s Ministry for Primary Industries. Approved consignments have received a TRQ of 40 metric tonnes.