The Free Trade Agreement (FTA) between India and New Zealand will officially come into effect on October 20, allowing for tariff-free access to Indian goods in the New Zealand market. This move aims to strengthen trade and investment relations between the two countries, enhance service trade, and diversify India's export markets amid geopolitical uncertainties.
Benefits of the Agreement for Various Economic Sectors
Users and entrepreneurs in sectors such as textiles, apparel, leather, and footwear expect to benefit from the removal of tariffs of up to 10 percent from the start of the agreement. Additionally, engineering goods, pharmaceuticals, machinery, chemicals, and agricultural products will also benefit from improved market access. The agreement includes market access for 70 percent of tariff lines, while India has excluded the remaining 30 percent from this agreement.
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Goals and Future Plans
Of the tariff lines covered by New Zealand, 30 percent will be immediately exempt from tariffs, while the remainder will be subject to gradual reductions over a maximum of 10 years. According to the strategic partnership roadmap between India and New Zealand, the two countries aim to double bilateral trade in goods and services to NZD 7 billion (approximately 35,000 crore rupees) by 2030.
Currently, the volume of bilateral trade in goods and services is about USD 2.4 billion. Indian service exports to New Zealand have increased by 13 percent over the past four years, reaching USD 634 million, while Indian goods exports have also risen by 16 percent, reaching USD 566.5 million in the 2025-26 fiscal year.
This agreement will also facilitate trade by expediting customs clearance, allowing goods to be cleared within 48 hours and urgent perishable shipments within 24 hours. The agreement also refers to the issuance of digital certificates and self-certification of origin rules for status holders.
In the agricultural sector, the agreement refers to controlled market access for apples, kiwis, and honey, subject to protective measures including limited tariff quotas, minimum import prices, and seasonal windows. There is also a plan for cooperation in agricultural production to improve farm performance and connect producers to global value chains.
The agreement also includes a commitment of USD 20 billion in investment from New Zealand and opportunities for collaboration in pharmaceuticals, medical equipment, and services. This agreement is expected to strengthen economic interactions between the two countries, expand business opportunities for Indian enterprises, and improve supply chain integration as India seeks to diversify its export destinations and enter new markets.
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