India–NZ Free Trade Agreement Unlocks Major Export Gains and Jobs Growth

Almost 57 percent of New Zealand exports to India will become duty-free from day one, increasing to 82 percent once the agreement is fully implemented.

New Zealand and India have concluded a landmark Free Trade Agreement (FTA) that will give New Zealand exporters unprecedented access to one of the world’s largest and fastest-growing markets, Trade and Investment Minister Todd McClay has announced.

The historic agreement opens the door to more than 1.4 billion Indian consumers and delivers one of the most comprehensive tariff reduction packages New Zealand has ever secured with India. Under the deal, tariffs will be eliminated or reduced on 95 percent of New Zealand’s exports — among the highest levels of market access achieved in any Indian FTA to date.

Almost 57 percent of New Zealand exports to India will become duty-free from day one, increasing to 82 percent once the agreement is fully implemented. The remaining 13 percent of exports will be subject to sharp tariff reductions, significantly improving competitiveness for Kiwi businesses across a wide range of sectors.

Negotiations began on 21 March and were concluded after nine months of intensive talks, reflecting a strong political commitment from both countries to deepen economic ties.

“This once-in-a-generation agreement creates opportunities New Zealand exporters have never had in India,” Mr McClay said. “This deal is in New Zealand’s best interest and will deliver thousands of jobs and billions of dollars in additional exports.”

India is now the world’s most populous country and is forecast to grow into a NZ$12 trillion economy by 2030. Mr McClay said the FTA would significantly accelerate progress towards New Zealand’s ambitious goal of doubling the value of exports over the next decade.

The agreement places New Zealand exporters on an equal or better footing with international competitors and provides improved access to India’s rapidly expanding middle class, which is driving demand for high-quality food, beverages, and consumer products.

Key export wins include the immediate elimination of tariffs on sheep meat, wool, coal, and more than 95 percent of forestry and wood products. Most seafood exports, including mussels and salmon, will gain duty-free access over seven years, while most iron, steel, scrap aluminium, and industrial products will become duty-free over five to ten years.

Horticulture exporters will also benefit substantially. Apples will receive a 50 percent tariff cut for a large quota — nearly double recent average exports — while kiwifruit will gain duty-free access within a quota almost four times current export levels, with tariffs outside the quota halved. Cherries, avocados, persimmons, and blueberries will become duty-free over ten years.

Wine exporters will see tariffs reduced from a prohibitive 150 percent to either 25 or 50 percent over ten years, depending on wine value, alongside a Most Favoured Nation (MFN) commitment. Tariffs on mānuka honey will fall sharply from 66 percent to 16.5 percent over five years — the first time India has granted preferential access for the product in an FTA.

The agreement also delivers significant gains for the dairy sector. New Zealand exporters will enjoy duty-free access for dairy and other food ingredients for re-export from day one, along with duty-free access for bulk infant formula and other high-value dairy preparations over seven years. High-value milk albumins will receive a 50 percent tariff cut within a New Zealand-specific quota equal to current export volumes.

Beyond goods trade, the FTA includes broad services coverage and builds on India’s World Trade Organization commitments, with a strong focus on financial services, e-payments, and FinTech. An MFN clause has been included to future-proof services trade as India liberalises further.

To protect specialist and iconic New Zealand product names, the two countries have agreed to establish Geographical Indication rules comparable to those New Zealand holds with the European Union. The agreement also includes provisions to future-proof dairy access by triggering consultations if India offers better access to comparable countries.

Labour mobility arrangements form another important part of the deal. The agreement establishes a pathway for up to an average of 1,667 skilled, non-renewable three-year work visas per year, targeting priority occupations where New Zealand faces skills shortages, including doctors, nurses, teachers, ICT professionals, and engineers. All immigration screening and qualification requirements will remain unchanged, and the Government retains flexibility to adjust the skills shortage Green List.

To support tourism and rural industries, New Zealand has also aligned its Working Holiday Scheme with Australia’s Indian FTA, providing up to 1,000 places each year.

The agreement includes a Treaty of Waitangi clause to protect New Zealand’s Treaty obligations, as well as chapters covering customs facilitation, technical barriers to trade, sanitary and phytosanitary standards, culture, traditional knowledge, economic cooperation, and trade and sustainable development.

A formal review of the agreement will take place one year after it enters into force, providing a mechanism to pursue further improvements over time.

Mr McClay said the agreement delivers for all New Zealanders by strengthening the economy and creating new opportunities for exporters.

“Trade grows the economy and creates jobs. The New Zealand–India Free Trade Agreement is about future-proofing opportunities for our exporters and ensuring Kiwi companies continue to punch above their weight on the global stage.”

New Zealand and India expect the agreement to be formally signed in the first half of next year.