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India- New Zealand Free Trade Agreement

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  • News: India and New Zealand Signed FTA on 27 April 2026. 

    • The New Zealand parliament is expected to approve this by the end of 2026.

  • Background

    • This is India’s 7th Agreement in the last three and a half years.

    • The negotiation was officially launched on March 16, 2025.

    • New Zealand is India’s 2nd largest trading partner (USD 1.3 bn) in the Oceania region.

    • Trade Surplus: with New Zealand, exporting more goods than it imports.

  • The Agreement was signed by Union Minister of Commerce and Industry Piyush Goyal and New Zealand’s Minister for Trade and Investment Todd McClay.

Key Provisions

  • Bilateral Trade target: To double $5 billion in the next 5 years.  

  • Foreign Direct Investment: New Zealand has committed to invest $20 billion in India over the next 15 years.  

  • Tariff Reduction: 

    • India will lower tariffs on 70.03% tariff lines, covering 95% of bilateral trade value.

      • While keeping 29.97% of tariff lines in exclusion to protect India's sensitive sectors including items such as dairy products, sugar, certain vegetable products (like onions), and aluminium.

        • Immediate duty elimination: 30% (wood, wool, leather)
        • Phased elimination (3–10 years): 35.6% (petroleum, machinery, vegetable oils)
        • Tariff reductions: 4.37% (wine, pharma, metals)
        • Tariff Rate Quotas: 0.06% (Mānuka honey, apples, kiwi, albumins)

    • 100% of India's exports will be granted zero-tariff market access.

      • Earlier, New Zealand maintained peak tariffs of up to 10%

  • Services: New Zealand has opened access in 118 sectors, with MFN commitments in 139 sectors.

  • Employment: 

    • Establishment of new Temporary Employment Entry (TEE) Visa pathway: Up to 5,000 at any given time for  Indian skilled professionals.

    • Post-study work opportunities: 3 years (STEM Bachelor's/Master's), 4 years (Doctoral)

    • 1,000 multiple entry Working Holiday Visas annually for young Indian. 

    • No numerical caps on Indian students in New Zealand

  • Agriculture

    • Centres of Excellence for apples, kiwifruit, and Mānuka honey

    • Tariff Rate Quota (TRQ) system with Minimum Import Price for selected agri products

    • Joint Agriculture Productivity Council (JAPC) to monitor TRQs

  • Key Firsts

    • First FTA where New Zealand includes dedicated Health & Traditional Medicine (AYUSH) chapter

    • First dedicated Student Mobility & Post-Study Work Visa pathway with any country

    • New Zealand to amend GI law within 18 months of the agreement to protect Indian GIs.

 

  • Trade Facilitation

    • Standard cargo clearance: within 48 hours

    • Express/perishable goods: within 24 hours

    • Paperless single-window clearance & Authorised Economic Operators

 

  • Tariff Rate Quota (TRQ) 

    • it is a trade policy tool used in international trade that permits a certain quantity of a product to be imported at a lower tariff rate. 

    • Once the specified quantity is reached, any additional imports of that product are subject to a higher tariff rate. 

    • This means lower tariffs within the quotas, and higher rates for quantities outside the quotas.

 

A poster with flags and a ship

Source: PIB