India Demand Surges Ahead of New Zealand Trade Deal

Trade Minister Todd McClay said the New Zealand-India Free Trade Agreement has been signed and is currently before Parliament, with the Government expecting it to take effect later this year.

New Zealand exporters are already seeing stronger demand from India months before the Free Trade Agreement officially comes into force, with rising sales across agriculture, forestry, tourism, and other industries signalling growing confidence in Kiwi products. The Government says the agreement is creating new opportunities even before the tariff reductions begin.

Apple and kiwifruit exports lead early growth

Trade Minister Todd McClay said the New Zealand-India Free Trade Agreement has been signed and is currently before Parliament, with the Government expecting it to take effect later this year. Businesses in both countries are already preparing for the agreement, creating what the Government describes as a positive ripple effect for exporters.

Apple exports have delivered one of the strongest performances. Since trade negotiations began, shipments to India have increased by 63 per cent, climbing from 27,000 tonnes during the 2024 season to 45,000 tonnes so far this year, with the export season still continuing. India has also moved rapidly up the rankings, becoming New Zealand's fourth-largest export destination for apples after being seventh only two years ago.

When the agreement comes into force, tariffs on apples will immediately fall from 50 per cent to 25 per cent within an initial quota of 32,500 tonnes, with the quota expanding to 45,000 tonnes by the sixth year, providing growers with meaningful cost savings and stronger competitiveness in one of the world's fastest-growing consumer markets.

Kiwifruit producers are also expected to benefit significantly. The agreement provides tariff-free access within a quota beginning at 6,250 tonnes and increasing to 15,000 tonnes over six years, while tariffs outside the quota will also be cut by half from the first day. Industry estimates suggest the changes could save growers around $125 million in tariffs over five years.

Forestry, wool and tourism gain fresh momentum

The expanding trade relationship is creating opportunities beyond horticulture. In June, Matariki Forests shipped its first load of logs from Bluff to India since 2020, while exporters of wood chips and pulp have also reported growing demand from Indian buyers.

Interest is also increasing in New Zealand's wool sector. Recent visits by Indian industry delegations have focused on accessing premium New Zealand wool along with expertise in fibre processing, technology, and advisory services, opening additional possibilities for collaboration between businesses in both countries.

Tourism is adding another dimension to the strengthening relationship. Around 8,000 visitors from India travelled to New Zealand during April 2026, marking the highest number recorded for that month and reflecting growing people-to-people connections alongside expanding trade.

Air New Zealand has also announced plans to pursue a joint venture with Air India that could pave the way for the first direct flights between the two countries, making travel easier for tourists, business travellers, and exporters.

More opportunities expected once the deal begins

The Free Trade Agreement will immediately make 57 per cent of New Zealand exports to India tariff-free, with additional tariff reductions introduced over time. Exporters are also expected to gain improved market access for wine and services through the agreement's Most Favoured Nation clause, which allows New Zealand to automatically receive better market access if India grants improved terms to other trading partners, including those negotiated recently with the European Union.

Todd McClay said bringing the agreement into force quickly will allow New Zealand businesses to take advantage of these improved trading conditions from the outset. He credited exporters for building commercial relationships early and positioning themselves to benefit as the agreement moves towards implementation, adding that the current momentum points to even greater opportunities once the deal officially takes effect.