India-New Zealand FTA to Take Effect on October 20, Opening Duty-Free Access for Indian Exports

Trade agreement targets higher bilateral trade by 2030, with textiles, garments, leather, engineering goods and processed foods among the sectors expected to benefit

The India-New Zealand Free Trade Agreement (FTA) is set to come into force on October 20, with the two countries targeting a doubling of bilateral trade by 2030. Under the agreement, Indian exporters will receive duty-free access to New Zealand across all tariff lines.

The removal of customs duties is expected to improve the competitiveness of Indian products in the New Zealand market, particularly across sectors such as textiles and garments, leather and footwear, gems and jewellery, engineering goods and processed foods.

Investment and Trade Expansion

The agreement also includes a commitment from New Zealand to promote investments worth $20 billion in India over the next 15 years.

Once the FTA takes effect on October 20, tariff changes will be implemented in stages. While some tariffs will be removed immediately, others will be reduced over a period of several years. Certain agricultural concessions will remain subject to quotas and safeguards.

Removing customs duties could make Indian products more competitive compared with imports from countries that continue to face tariffs in the New Zealand market.

India to Reduce Tariffs on Selected New Zealand Imports

India has agreed to reduce or eliminate tariffs on around 70 per cent of its tariff lines covering imports from New Zealand.

Some products will receive immediate duty-free access, including wood, wool, sheep meat and raw hides.

However, India has retained protections for sensitive sectors. Instead of providing unrestricted access at lower duties for certain agricultural products, the agreement uses tariff-rate quotas. Under this mechanism, specified quantities can enter India at lower tariff rates, while safeguards remain applicable to larger volumes.

Kiwi Fruit and Apple Import Provisions

Kiwi fruit is among the products receiving greater market access under the agreement. During the first year, up to 6,250 tonnes of New Zealand kiwi fruit will be eligible for duty-free entry into India. The quota is scheduled to increase progressively to 15,000 tonnes by the sixth year.

The concession will be subject to conditions including a minimum import price and seasonal requirements.

For apples, a quota has also been established. Imports covered by the arrangement will attract a 25 per cent duty, compared with the current 50 per cent tariff. Minimum import prices and seasonal conditions will also apply.

The quota mechanism provides greater market access to New Zealand agricultural products while retaining safeguards intended to limit the impact of lower-priced imports on domestic fruit growers.

Dairy Sector Remains Protected

Despite the broader tariff commitments, India has not opened its sensitive dairy sector to lower tariffs under the agreement.

Certain other agricultural products have also been excluded from tariff reductions to protect the livelihoods of small farmers across the country.

The India-New Zealand FTA will therefore combine expanded market access with phased tariff reductions, quotas and safeguards across different product categories, while providing Indian exporters with duty-free access to the New Zealand market across all tariff lines.