The historic Free Trade Agreement (FTA) between New Zealand and India was passed by the Wellington parliament on Wednesday. The bill was passed with both the ruling National Party and the main opposition, the Labour Party, supporting the decision. 93 lawmakers voted in favour of the legislation, taking a significant step towards implementation.
New Zealand Prime Minister Christopher Luxon posted on X, “This landmark deal means more jobs, higher incomes for Kiwis. It means more New Zealand products being sold in India by opening the door to 1.4 billion Indian consumers. It’s one of the ways we will grow the economy to help you get ahead – fixing the basics and building the future."
Signed on April 27, 2026, the agreement promises to reduce trade barriers, with duty-free access for 100 per cent of India’s exports and lower tariffs for 95 per cent of New Zealand’s imports. The FTA also promises a $20 billion investment over 15 years.
The complete elimination of export tariffs is expected to boost export growth and employment opportunities in the Indian textiles, leather, footwear, gems, processed foods and engineering goods industry.
Zero-duty access will allow small Indian businesses to export garments and leather goods at a much lower cost, generating revenue and directly benefiting the millions of weavers, tanners and factors. The deal also lowers entry barriers for Indian agri-processors, allowing small-scale food units to export directly to New Zealand’s consumer market.
Agricultural Productivity Partnership, a corporate framework designed to share advanced agricultural technology and link farmers to global chains, is also part of the bilateral trade agreement.
What New Zealand produce becomes cheaper in the Indian market?
Around 30 per cent of New Zealand imports are duty-free from day one. This means that New Zealand produce, including wood, wool, sheep meat, leather, and raw hides, will be available at relatively lower prices in the Indian market.
Other produce, including petroleum oil, malt extract, vegetable oils and electrical machinery, will gradually become cheaper as tariff reductions are phased out over 3, 5, 7 and 10 years.
However, apples, kiwis and Manuka Honey, while not excluded, are protected through Tariff Rate Quota (TRQ). TRQ sets limits on the amount of product that can be exported and applies additional tariffs once those limits are exceeded.
For instance, 32,500 metric tonnes of apples can be imported annually with a lower customs duty of 25 per cent. However, apples imported beyond that limit will still face the standard 50 per cent tariff. Apart from tariffs, apples have a seasonal quota and Minimum Import Price (MIP) to prevent intense competition.
Hence, prices for apples, kiwis and Manuka honey are not expected to shift immediately.
As free imports can increase competition for domestic farmers, sensitive sectors such as dairy, edible oils, sugar, spices, onions and key agricultural commodities have been excluded from the FTA.
