India and New Zealand formalised a free trade agreement on Monday that cuts tariffs on important fruit imports such as kiwifruit and apples, creates expanded opportunities for Indian exports and eases visa regulations as the two countries move to deepen economic ties.
The accord, concluded in December after about nine months of talks, is among the fastest trade deals completed by the South Asian nation. Under its terms, tariffs on 95% of New Zealand’s exports to India will either be cut or removed. The list of affected New Zealand exports includes seafood, iron, steel and scrap aluminium.
"The benefits of this FTA are widespread," New Zealand Prime Minister Christopher Luxon said in a statement, adding the deal would "open the doors of opportunity to 1.4 billion consumers in the Indian market."
Speaking after signing the agreement alongside his New Zealand counterpart Todd McClay in the presence of business leaders from both countries, Indian Trade Minister Piyush Goyal said, "New Zealand has also committed to invest $20 billion."
Market access and exclusions
Indian officials said New Delhi opted to keep a range of sensitive farm sectors out of the market-access commitments, citing the need to protect domestic producers. Those excluded sectors include dairy, coffee, sugar, spices, edible oils and rubber. The decision represented a setback for New Zealand’s dairy industry, which is the country’s largest export sector.
The broader accord forms part of India’s strategy to diversify export markets amid global trade uncertainty, including concerns over U.S. tariffs and the conflict in the Middle East. New Delhi has also been advancing trade talks with Britain, Oman and the European Union as it seeks wider market access with major partners.
Services, visas and mobility
Under the deal New Zealand will extend market access across 118 services sectors. These sectors span professional services, audio-visual and computer-related services, as well as construction, telecoms and tourism.
The pact provides a quota of 5,000 temporary employment visas for Indian professionals and 1,000 working holiday visas, and eases post-study work rights for Indian students, according to Indian officials.
Phasing of tariff reductions
Tariff changes under the agreement are scheduled to occur over staggered timelines. Wine tariffs will be lowered over a 10-year period. There will be immediate duty-free access for dairy and other food ingredients intended for re-export. Duty-free access for bulk infant formula and other high-value dairy products will be phased in over seven years. The pact also halves a tariff on high-value milk albumins within a New Zealand-specific quota.
New Zealand Trade Minister Todd McClay said the agreement would support his country’s ambition to double exports within 10 years, adding: "This deal will deliver thousands of jobs and billions of dollars in additional exports." According to a New Zealand statement, more than half of the country's exports to India will become duty-free immediately, with remaining tariffs reduced over time.
Sectoral winners and industrial inputs
The deal is expected to give a boost to several Indian export sectors, notably textiles, leather, pharmaceuticals, engineering goods and automobiles. It also allows duty-free access for certain industrial inputs, including wooden logs, coking coal and metal scrap.
Ratification and trade scale
The agreement requires approval from New Zealand’s parliament. Observers expect it to pass after the opposition Labour Party expressed support the previous week. Trade agreements in New Zealand have historically attracted bipartisan backing.
Two-way trade between the countries remains modest. Indian data show merchandise trade was about $1.3 billion in 2024/25, while total goods and services trade was estimated at roughly $2.4 billion in 2024. The exchange rate cited was $1 = NZ$1.7033.
While the pact introduces immediate tariff relief for a substantial portion of New Zealand shipments to India and establishes new mobility channels for services and professionals, it leaves several sensitive agricultural areas outside market access and must still complete domestic ratification steps.