With an aim to strengthen India’s global economic partnerships, India and New Zealand have inked a free trade agreement (FTA) at Bharat Mandapam, New Delhi. The Agreement was signed by Union Minister of Commerce and Industry Piyush Goyal and New Zealand’s Minister for Trade and Investment Hon. Todd McClay. The FTA provides duty-free access for 100% of India's exports to New Zealand, covering all tariff lines or produce categories, and is expected to significantly boost MSMEs and employment by enhancing competitiveness in labour-intensive sectors such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods, and processed foods. Earlier, New Zealand maintained peak tariffs of up to 10% on key Indian exports, including ceramics, carpets, automobiles, and auto components.

With zero-duty market access from entry into force as New Zealand's other trade partners, Indian products will be fully competitive in that country, enjoying a level playing field. Significantly, India also secured duty-free inputs for its manufacturing sector, including wooden logs, coking coal, and waste and scraps of metals, lowering production costs and enhancing the global competitiveness of the Indian industry. On the other hand, India has offered tariff liberalisation on 70.03% of tariff lines covering 95% of bilateral trade value, while keeping 29.97% of tariff lines excluded to protect India's sensitive sectors.

The products that are kept in exclusion are mainly -- dairy (milk, cream, whey, yoghurt, cheese etc.), animal products (other than sheep meat), agricultural products (onions, chana, peas, corn, almonds), sugar, artificial honey, animal, vegetable or microbial fats and oils, arms and ammunition, gems and jewellery, copper and articles thereof (cathodes, cartridges, rods, bars, coils), aluminium and articles thereof (ingots, billets, wire bars) among others. On 30% of tariff lines of New Zealand, India will provide duty elimination on goods such as wood, wool, sheep meat, and leather-raw hides. Similarly, 35.60% of tariff lines are subject to phased elimination over 3, 5, 7, and 10 years, including petroleum oil, malt extract, vegetable oils, selected electrical and mechanical machinery, and peptones.

New Zealand products which enjoy tariff reductions include wine, pharmaceutical drugs, polymers, aluminum, iron and steel articles, and goods that only 0.06% fall under tariff rate quotas, including Manuka honey, apples, kiwi fruit, and albumins, including milk albumin. The FTA also includes a commitment to facilitate $20 billion in investment into India. A rebalancing clause is incorporated into the Agreement to provide a framework for addressing any shortfall in investment delivery, thereby ensuring robust and tangible economic outcomes. 

India-New Zealand bilateral trade has shown strong growth in recent years, with bilateral merchandise trade in FY 2024-25 standing at $1.3 billion registering a growth of 49% over the trade in previous year. With the FTA now signed, eliminating tariffs, enhancing services access, securing $20 billion in investment, and establishing robust institutional frameworks, the India-New Zealand FTA is expected to boost bilateral trade significantly in the coming years, create employment opportunities, expand exports, and strengthen a deeper and more resilient economic partnership between the two countries.