Photo: Shariquejamalworld / Wikimedia Commons, CC BY-SA 4.0
India’s free trade agreement with New Zealand came into force on Tuesday, October 20, making every Indian product sold in that country free of customs duty from day one. In return, India has cut or removed tariffs on goods that make up about 95% of what New Zealand currently ships here, while keeping dairy and several farm products off the table.
Commerce and Industry Minister Piyush Goyal and New Zealand’s Trade and Investment Minister Todd McClay announced the start date at a virtual event on Monday, timing it with Vijayadashami. Goyal also flagged off the first JCB machine exported from India to New Zealand, built in Pune.
What Indian exporters get
New Zealand has scrapped duties on all its tariff lines, removing rates of up to 10% that Indian goods paid until now. It is the first trade deal under which India gets full duty-free access across every tariff line as soon as it takes effect.
The biggest gains are expected in labour-intensive sectors such as textiles, apparel, leather and footwear, along with engineering goods, pharmaceuticals, gems and jewellery, auto parts, marine products, spices, tea and coffee, and processed food. “Starting tomorrow, 100% of the goods from every sector in India going to New Zealand will go there with zero duty,” Goyal said on Monday.
What New Zealand gets, and what India kept out
India is offering concessions on about 70% of its tariff lines. Wine, medicines, polymers, aluminium and iron and steel articles are among the New Zealand products that will become cheaper to import. Apples, kiwifruit, manuka honey and albumins will come in under tariff-rate quotas, with minimum import prices and other safeguards.
Those quotas are tied to action plans meant to lift Indian farm productivity, including centres of excellence for kiwifruit in Nagaland and Uttarakhand, apples in Himachal Pradesh and Uttarakhand, and honey in Uttar Pradesh and West Bengal. Dairy, including milk, cheese, whey and yoghurt, stays fully excluded, along with onions, chana, peas, corn, almonds and sugar.
New routes for students and workers
The agreement creates a Temporary Employment Entry visa for skilled Indian professionals. New Zealand’s immigration department said up to 5,000 people can hold it at any one time, mostly in occupations on its skills shortage list, with a few places for professions closely linked to India such as yoga instructors, AYUSH practitioners, Indian chefs and music teachers. The visa allows a stay of up to three years.
- No numerical cap on Indian students, with at least 20 hours of work a week allowed during study.
- Post-study work rights of up to three years for STEM bachelor’s and master’s graduates, and up to four years for doctoral graduates.
- A new working holiday scheme with 1,000 places a year, according to the commerce ministry.
Why it matters
Trade between the two countries is still small. Goods trade stood at about $1.3 billion in 2024-25, with Indian exports of around $711 million, and total trade in goods and services is about $2.4 billion. New Zealand has committed to facilitate $20 billion of investment into India over 15 years.
The deal was signed on April 27 in New Delhi, passed by New Zealand’s Parliament on September 16 and ratified on September 21. Goyal said the commerce ministry would now work with state governments to tell farmers, exporters and small businesses how to use it, while McClay said its success would depend on how far businesses on both sides actually take it up.
