Duty-Free Access, $20-Billion Investment: Inside India-New Zealand Trade Deal

India and New Zealand concluded a landmark Free Trade Agreement (FTA) on Monday, aimed at boosting trade, investment, and mobility between the two nations. Negotiations for this had begun in March this year.

The pact grants Indian exporters 100% duty-free access to the New Zealand market, while India offers calibrated access to protect sensitive sectors.

Highlights of the FTA

Duty-Free Access: All Indian exports to New Zealand will face zero tariffs, benefitting sectors such as textiles, leather, pharmaceuticals, engineering goods, and processed foods.

Investment: New Zealand will invest $20 billion in India over 15 years.

Mobility: Unlimited Indian students in New Zealand, extended post-study work visas, 5,000 skilled visas, and 1,000 working holiday visas annually.

What India Offered

70% tariff lines opened (this translates to 95% trade value)

Includes: wood, wool, sheep meat, leather (raw hides), petroleum oils, malt extract, vegetable oils, machinery, and peptones.

30% tariff lines excluded (sensitive items)

Includes: dairy (milk, cream, cheese), sugar, onions, chana, peas, corn, almonds, artificial honey, fats & oils, arms, gems & jewellery, copper (cathodes, rods, bars), aluminium ingots/billets.

Tariff Reduction Structure

Immediate elimination on 30%

Products: wood, wool, sheep meat, raw hides.

Phased removal on 35.6%

Products: petroleum oils, malt extract, vegetable oils, selected machinery.

Tariff cuts on 4.37%

Products: wine, pharmaceutical drugs, polymers, aluminium, iron & steel articles.

Tariff Rate Quota system on 0.06%

Products: Manuka honey, apples, kiwi fruit, albumins (milk albumin).

The FTA is expected to boost MSMEs, create jobs, and deepen economic ties, with bilateral trade already at US$ 2.4 billion in 2024.

Trade Relations: From Deficit to Surplus

Has India always enjoyed strong trade ties with New Zealand? Historical data shows a shift over time. Between 2016 and 2019, India faced a trade deficit, with imports exceeding exports. In 2020, the trend reversed, and India recorded a surplus. Since then, exports have consistently outpaced imports.

GFX-1

In 2025, India exported goods worth Rs 4,456 crore to New Zealand and imported Rs 3,689 crore, maintaining a positive trade balance.

Top Trades in 2025

Exports: Mineral fuels and oils led at $1,094 million, followed by pharmaceuticals and textiles. Other major exports included machinery and vehicles, underscoring India's strength in energy, healthcare, and manufacturing.

GFX-2

Imports: India imported wood products ($484 million), iron and steel ($473 million), fruits and nuts ($457 million), albumins and enzymes ($325 million), and aluminium products ($298 million), reflecting reliance on New Zealand for raw materials and agricultural goods.