New Delhi: The India-New Zealand Free Trade Agreement (FTA) will come into force on October 20, following its formal ratification by both countries on September 21. The agreement seeks to significantly expand bilateral trade and strengthen economic ties between the two countries amid rising global trade barriers and tariff uncertainty.
Union Commerce and Industry Minister Piyush Goyal said the agreement aims to double bilateral trade to around ₹35,000 crore over the next four to five years. The pact will eliminate import tariffs on all Indian goods entering New Zealand, while India will either remove or substantially reduce tariffs on 95% of its current imports from New Zealand.
India has, however, retained protection for several sensitive sectors. According to Goyal, the agreement does not provide tariff concessions to New Zealand on dairy and selected agricultural products, including onions, almonds, chickpeas, peas, artificial honey and sugar. The government said the safeguards were intended to protect vulnerable domestic sectors while expanding opportunities for Indian exporters.
The Commerce Minister said the agreement could benefit micro, small and medium enterprises (MSMEs), farmers, handloom artisans and weavers by providing greater access to the New Zealand market. New Zealand, meanwhile, sees India as an important destination for expanding its exports and investment.
Bilateral trade stood at approximately $1.3 billion during the 2024-25 financial year, with India ranking as New Zealand’s ninth-largest export market. New Zealand Trade and Investment Minister Todd McClay said the agreement would provide greater certainty to businesses seeking to establish commercial relationships and expand trade at a time of increasing tariffs and trade restrictions globally.
As part of the agreement, New Zealand has committed to facilitating $20 billion in foreign direct investment into India. Goyal highlighted areas such as agricultural technology, kiwi cultivation, apiculture and engineering manufacturing as potential avenues for investment and technological cooperation.
He said New Zealand companies could establish manufacturing operations in India to serve both the domestic market and international markets. India’s network of preferential trade agreements could also provide companies manufacturing in the country with access to a substantial share of the global economy.
Goyal also said India was examining the details of recent U.S. legislation concerning sanctions on countries purchasing Russian oil. On India’s ongoing trade negotiations with Chile, he indicated that further developments could emerge in the coming months. Discussions with Canada are also being fast-tracked, with Indian negotiators scheduled to visit Canada for the fifth round of talks on October 5.
