India-New Zealand FTA from October 20: What you need to know

The India-New Zealand Free Trade Agreement (FTA) will come into force on October 20, bringing changes to tariffs, market access, investment and mobility between the two countries.

The agreement was signed on April 27 and has now been ratified by both countries. Commerce and Industry Minister Piyush Goyal announced on Monday that the pact will formally take effect on October 20, the occasion of Dussehra.

Here is what the India-New Zealand trade deal means, which sectors are covered, what tariffs will change and what the two countries are targeting by 2030.

When will the India-New Zealand FTA come into force?

The agreement will come into force on October 20, 2026.

Both countries have completed the ratification process. New Zealand’s parliament passed the legislation required to implement the agreement last week.

New Zealand Trade and Investment Minister Todd McClay exchanged the ratification documents with India’s High Commissioner to New Zealand, Muanpuii Saiawi, at Parliament.

“We are taking forward the next important milestone in our bilateral economic partnership, the entry into force of the India-New Zealand Free Trade Agreement, which will come into force on the auspicious occasion of Dussehra on 20th of October, 2026, reflecting our shared commitment to build a stronger and a more ambitious economic partnership with New Zealand,” Goyal said.

What does the deal mean for Indian exports?

One of the biggest changes for India is that 100 per cent of Indian exports will get duty-free access to New Zealand from the day the agreement comes into force.

New Zealand currently maintains peak tariffs of up to 10 per cent on key Indian goods, including ceramics, carpets, automobiles and auto components.

The removal of these tariffs is expected to give Indian exporters an edge over goods from competing countries in the New Zealand market.

Sectors that stand to gain immediately include textiles and apparel, leather and footwear, gems and jewellery, engineering goods and processed foods.

Indian manufacturers will also get tariff-free access to important inputs such as wooden logs, coking coal and metal scrap.

Which Indian sectors are protected?

The agreement does not cover all sectors.

Sensitive products including dairy, onions, chickpeas, peas, corn, almonds, artificial honey and sugar have been kept out of the trade deal.

This means these sectors have been excluded from the tariff commitments under the agreement.

What does New Zealand get from the deal?

For New Zealand, the agreement provides preferential access to India, which Goyal described as the large and fastest growing economy in the world.

Once fully implemented, tariffs on about 95 per cent of New Zealand exports to India will be eliminated or reduced.

McClay said 57 per cent of New Zealand exports would be tariff-free from day one. This includes sheep meat, wool and coal.

More than 95 per cent of forestry and wood exports will also receive tariff-free access.

The duty-free coverage will later rise to 82 per cent, while the remaining 13 per cent will face steep tariff cuts.

New Zealand exporters will also receive preferential quota access for apples, kiwifruit and albumins.

Wine tariffs will fall from 150 per cent to either 25 per cent or 50 per cent over 10 years, depending on product value.

How much will New Zealand invest in India?

New Zealand has committed to invest USD 20 billion in India over the next 15 years.

Goyal said the investment commitment “will give capital to many of our manufacturing sectors, along with technology”, adding that New Zealand companies will also be attracted to India to invest.

The agreement also establishes an agricultural productivity partnership under which New Zealand’s technology will meet India’s scale and growing demand.

On promoting investment from New Zealand into India, Goyal said, “We are looking at a specific desk which will look into the India-New Zealand partnership.”

What is the trade target for 2030?

Both countries are aiming to double bilateral two-way trade in goods and services to NZ dollar 7 billion, or about Rs 35,000 crore, by 2030.

Goyal said bilateral trade stood at USD 1.1 billion in 2025-26.

Prime Ministers Christopher Luxon and Narendra Modi have also committed to doubling bilateral trade by 2030, from about USD 2.3 billion in the 12 months through June.

What happens to students and workers?

The agreement also eases mobility rules for students and workers.

This is intended to create additional opportunities alongside the trade and investment provisions of the pact.

Why is the agreement significant now?

The agreement comes at a time of global economic uncertainty and changes in international trade.

McClay said the pact would give confidence to business communities in both countries.

“The New Zealand-India FTA will level the playing field and unlock access for Kiwi businesses in one of the fastest growing markets in the world,” McClay said.

He also said, “India and New Zealand show that we can agree to terms that are beneficial for trade and businesses,” citing rising tariffs and global business uncertainty.

For India, the agreement comes as New Delhi seeks to diversify its export markets through trade agreements with major economies, including Britain and the European Union.

The deal also comes amid tensions over changes in US trade policy and tariffs, including measures related to countries buying Russian oil.

What does India expect from the agreement?

Goyal said the immediate priority is to ensure that the agreement produces tangible benefits for businesses and people in both countries.

“Looking forward, our immediate priority should be to ensure that the provisions of the agreement immediately translate into tangible benefits for businesses and people of India and New Zealand…Together, let’s ensure that this FTA becomes a strong foundation for a deeper, more dynamic and mutually beneficial economic partnership between our two countries,” he said.

The agreement will therefore begin a new phase in India-New Zealand economic relations from October 20, with tariff changes, investment commitments, greater market access and mobility provisions coming into effect.