India and New Zealand have successfully concluded a historic Free Trade Agreement (FTA), a move set to make Kiwi fruit, apples, and wine more affordable in India while opening a massive new market for New Zealand exporters.
Announced on Monday by Prime Ministers Narendra Modi and Christopher Luxon, the India-New Zealand Free Trade Agreement was finalized in a swift nine months, ending negotiations that had been dormant for ten years.
The deal marks India's third major trade pact this year and is seen as a strategic step by both nations to foster economic growth amid global trade uncertainties.
Key Benefits and Tariff Cuts
The cornerstone of the agreement is unprecedented tariff elimination. The India-New Zealand Free Trade Agreement will remove or reduce duties on 95% of New Zealand's current exports to India.
"Boosting trade means more Kiwi jobs, higher wages and more opportunities for hard working New Zealanders," Prime Minister Christopher Luxon stated on social media, forecasting that New Zealand's exports to India could grow by $1.1 to $1.3 billion annually over the coming decades.
Immediate Savings: More than 50% of goods, including key horticulture products, will become duty-free from the very first day the pact takes effect.
Phased Reductions: Tariffs on an additional 30% of exports will be phased out over time, bringing the total duty-free coverage to over 80%.
Quick Facts at a Glance
Tariff Reduction: 95% of New Zealand's exports to India.
Immediate Duty-Free Access: For over 50% of goods from Day One.
New Zealand Investment: $20 billion committed in India over 15 years.
Trade Goal: Aim to double bilateral trade within five years.
Current Trade: Bilateral merchandise trade stood at $1.3 billion in 2024-25.
What Will Become Cheaper in India?
Indian consumers can expect lower prices on a range of popular New Zealand products:
Fruits: New kiwifruit and apple exporters will gain valuable new quota access. New Zealand is the first country to secure preferential access for apples in any Indian FTA.
Other Produce: Tariffs will be phased out on avocados, blueberries, cherries, and persimmons.
Wine and Honey: Wine tariffs will be cut by 66-83% over ten years, and duties on prized Manuka honey will be reduced by 75% over five years.
Wool and Meat: Tariffs will be eliminated immediately on sheep meat and wool, key exports for New Zealand.
A Two-Way Street: Investment and Mobility
The India-New Zealand Free Trade Agreement is not just about goods. It includes a significant $20 billion investment commitment from New Zealand into India over 15 years, targeting sectors like manufacturing, infrastructure, and services.
A major win for India is in the services and mobility sector. The deal creates new pathways for Indian professionals and students:
It establishes a new temporary employment visa for up to 5,000 Indian skilled professionals.
For the first time, New Zealand has agreed to an annex on student mobility, allowing Indian students to work part-time and granting post-study work visas for up to four years for doctoral graduates.
Safeguards and Strategic Context
In a move to protect domestic interests, India has excluded several sensitive sectors from the agreement. Key exclusions include most core dairy products (like milk, cheese, and butter), certain vegetable products, onions, and spices.
This exclusion has drawn criticism from New Zealand's dairy sector and the NZ First political party, which has announced it will oppose the deal, arguing it does not secure enough for the country's largest export industry.
For India, this pact is part of a broader strategy to diversify its trade partnerships and cushion its economy against external shocks, such as recent steep tariff hikes by the United States.
Analysts view the agreement as a foundational framework for deeper, long-term cooperation with one of the world's fastest-growing economies.
The final legal text is expected to be signed in the first half of 2026, with both governments now working to build the case for its ratification and implementation.
