Source: BusinessNZ
New Zealand exporters gain better access to India from today, with BusinessNZ Chief Executive Katherine Rich saying the new free trade agreement gives businesses more room to grow at a time of uncertainty in international trade.
Tariffs on sheep meat and wool are removed from today, October 20, and more than 95 per cent of existing forestry exports becomes duty-free. Further scheduled tariff reductions follow on January 1, 2027.
Ms Rich said implementation marks an important milestone after years of advocacy for closer economic ties with India.
Many had said a deal with India was impossible.
“It’s a great day for New Zealand exporters, with the India-New Zealand Free Trade Agreement coming into force today. It creates new opportunities for trade, investment and stronger economic ties between our nations.
“At a time when international trade is becoming less predictable, New Zealand needs more options, not fewer. A stronger relationship with India helps spread risk and gives our businesses another avenue for growth.”
Ms Rich said the deal was of strategic importance to New Zealand.
“India is one of the world’s fastest-growing major economies. The agreement delivers improved access for New Zealand exporters, substantial tariff reductions across many of our exports, stronger footing for services, and clearer, faster trade processes into a market of 1.4 billion people.”
ExportNZ Executive Director Joshua Tan said those exporters that already had trade relationships in India would have been preparing for the deal coming into force – checking rules of origin and ensuring documentation processes were ready.
The ExportNZ DHL barometer survey showed a jump in exporters interested in doing business in India – but those who were not already in the market now needed to assess whether there were good commercial opportunities, and whether they were ready to make the necessary investment in time and resources in order to make a go of it and succeed.
“Building commercial relationships and establishing a presence in the market will still take time and resources from our export companies.”
Ms Rich said government agencies and business organisations had a continuing role in helping companies understand the requirements and resolve problems as they arise.
While the dairy outcome falls short of what New Zealand sought, Ms Rich said further progress should remain a priority alongside making use of the access already secured.
“We would have liked a more ambitious dairy outcome. That remains an area where we want further progress.
“But that does not diminish the value of the access secured for other sectors. The test is whether this agreement creates worthwhile opportunities and leaves New Zealand better placed than it would be without it. We believe it does.”
Today’s milestone was the beginning of the next stage of work.
“Getting the agreement into force is an important achievement. The next task is to turn that opportunity into lasting business.”
New Zealand-India FTA takes effect on 20 October: what changes for exporters
The New Zealand-India Free Trade Agreement takes effect on October 20, 2026, cutting tariffs and opening opportunities. For existing exporters, some benefits begin immediately.
India is New Zealand’s ninth-largest goods-and-services export market, taking NZ$2.22 billion in the year ended June 2026. Two-way trade was about NZ$4 billion.
ExportNZ Executive Director Joshua Tan said businesses must assess whether India fits their strategy and whether they can commit the resources needed.
“The FTA helps address some of the barriers, but building commercial relationships and establishing a presence in the market will still take time and resources from our export companies.”
What the headline numbers mean
Based on 2024 goods trade values, including existing duty-free access:
- 57.3 per cent qualifies for duty-free access from entry into force, including access under quota.
- 82.2 per cent qualifies once scheduled tariff elimination is complete.
- Another 13.2 per cent receives reductions rather than elimination.
- 4.6 per cent remains excluded.
Together, 95.4 per cent receives elimination or reductions. These figures exclude services and do not describe all possible products. Core dairy products and beef remain excluded.
Estimated annual tariff savings are NZ$43 million initially, rising to NZ$62 million when fully implemented, based on 2024 trade.
The official assessment projects annual GDP NZ$401 million higher by 2037, in 2024 dollars, than without the agreement: about 0.07 per cent. By 2050, the modelled gain reaches approximately NZ$658 million, or 0.1 per cent.
Removing New Zealand’s remaining tariffs on qualifying Indian goods could lower costs for importers, businesses and consumers, although some domestic producers face greater competition.
Immediate gains
More than 95 per cent of existing forestry exports to India becomes duty-free immediately. Tariffs on almost all existing forestry trade are removed over seven implementation years.
India’s 33 per cent sheep meat tariff disappears immediately, alongside the tariff on wool. Better access improves competitiveness; sales still depend on demand, distribution and relationships.
Apples qualify from 1 April to 31 August; kiwifruit from 1 April to 15 October. The first practical quota opportunity is therefore 2027:
- Apples: 35,000 tonnes, rising to 45,000 from year six. The in-quota tariff falls from 50 to 25 per cent, subject to a minimum CIF (cost, insurance and freight) value of US$1.25/kg.
- Kiwifruit: 8,000 tonnes, rising to 15,000 from year six. In-quota access is duty-free, subject to a minimum CIF value of US$1.80/kg.
Outside quota, kiwifruit receives a 50 per cent reduction in the prevailing most-favoured-nation tariff where its CIF value is at least US$2.50/kg.
Export certificates, Indian quota authorisations, minimum values and import windows apply. Related market access can be suspended through the agreement’s consultation process if agricultural cooperation commitments are not fulfilled.
Wine receives substantial cuts, but some protection remains. Under the negotiated schedule, wine valued at US$5 to below US$15 per 750ml bottle, CIF, falls from a 150 per cent tariff to 100 per cent initially, ultimately reaching 50 per cent. Wine valued at US$15 or more falls to 75 per cent initially, ultimately reaching 25 per cent. Below US$5, the scheduled tariff remains 150 per cent.
For wine, India must provide treatment at least as favourable as that given to other trading partners, including minimum CIF thresholds.
Dairy’s limits, services’ opportunities
Milk powders, butter, cheese and other core dairy products remain excluded from tariff liberalisation. Gains are narrower: qualifying bulk infant formula, dairy-based preparations and peptones have tariffs phased out over seven implementation years; albumins receive reduced tariffs within quota.
A dedicated mechanism is intended to facilitate duty-free supply of New Zealand ingredients, including dairy, for manufacturing in India for subsequent export.
If India grants core dairy concessions to a comparable trading partner under a qualifying future agreement, New Zealand can request consultations on similar treatment during the agreement’s general review. Unlike wine’s provision, this does not guarantee matching access.
Mr Tan said officials must continue pursuing better dairy access. The commercial case is that gains for other exporters remain worth taking while that work continues.
India has made commitments across almost 100 additional services sectors beyond its WTO commitments, including engineering, environmental services, tertiary and adult education, and audiovisual services. Qualifying future improvements offered to other FTA partners can also flow through.
These provisions do not automatically recognise New Zealand qualifications, licences or registrations. They support further work on recognition.
Immigration: capped pathways, policy trade-offs
The agreement includes temporary employment, working-holiday and student commitments. It does not allow for unrestricted entry.
The agreement’s temporary-employment pathway is capped at 5,000 visa holders at any one time, not 5,000 additional arrivals annually: 4,400 places in specified skilled occupations and 600 in specified Indian occupations. Applicants must meet employment and eligibility requirements. A separate working-holiday scheme provides up to 1,000 places annually.
The skilled occupation list is reviewed every five years, with existing arrangements continuing unless changes are mutually agreed. This limits unilateral flexibility as labour-market conditions evolve.
The student annex prevents numerical limits on qualifying students’ admission and entry, while retaining immigration and institutional eligibility requirements. New Zealand already operated without a numerical cap, but a treaty commitment constrains future choices.
Commitments include permission to work at least 20 hours weekly during study and specified post-study work periods. The annex requires implementation within one year of entry into force, not necessarily immediately.
Investment: not a taxpayer cheque
New Zealand must promote foreign direct investment into India, aiming to increase investment by New Zealand investors by US$20 billion over 15 years. It does not require a government payment or compel businesses to invest.
Reviews occur no later than years five and ten, with a final review at year 15, unless different arrangements are mutually agreed.
If the objective is missed at the final review and India considers New Zealand has not fulfilled its promotion commitment, escalating government-to-government consultations can follow. If unresolved, any grace period granted has elapsed and India determines the promotion commitment remains unfulfilled, it can take proportionate measures to rebalance tariff concessions.
Mr Tan said businesses should invest on commercial merit.
The chapter does not provide investor-state dispute settlement; India’s domestic legal and regulatory environment still requires careful assessment.
Turning access into business
The next scheduled tariff cuts arrive on 1 January 2027. The general schedule’s first implementation year ends on 31 December 2026.
Lower tariffs do not remove licensing, labelling, biosecurity, documentation or intellectual property challenges. The agreement improves customs procedures, including advance rulings and electronic processing.
Its 48-hour release commitment requires necessary information and documentation by arrival and excludes goods subject to physical examination or inspection. For perishables and express shipments, the commitment is to endeavour to release goods within 24 hours, subject to conditions. It is not a clearance guarantee.
Mr Tan said implementation must be monitored as businesses begin using the agreement. ExportNZ can assist alongside MFAT, MPI and New Zealand Customs.
Existing exporters should confirm tariff classifications and reductions, rules of origin and documentation, quota eligibility, import windows and minimum values. They should also review approvals, logistics and contracts with importers, distributors and freight providers.
For newcomers, the first task is assessing market fit, commercial opportunity, local partnerships and the resources needed. Mr Tan said there had been positive interest, including well-attended events and 100 businesses and organisations backing the BusinessNZ campaign to sign the deal.
Australia’s experience shows the potential. Its Department of Foreign Affairs and Trade reports that agricultural exports to India more than doubled, from around A$1 billion in 2022 to A$2.3 billion in 2025. The Australia-India trade agreement entered into force on 29 December 2022. Those figures show growth, not how much was caused by the agreement or what New Zealand can expect.
“It is now up to our exporters, our business community to make the most of the opportunity.”
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