India-New Zealand FTA Comes Into Force
The agreement is expected to benefit labour-intensive sectors such as textiles, apparel, leather and footwear, where tariffs of up to 10 per cent will be eliminated from the outset.
Chennai:As India’s FTA with New Zealand comes into force, Indian students will get the benefits of extended post-study visas and work visas. Australian wine too will become cheaper as it has received a price-based duty cut.
Services and mobility could deliver larger gains for India. The Work and Holiday visa scheme will allow 1,000 young Indians each year to live and work in New Zealand for 12 months. Indian students in New Zealand will be allowed to work 20 hours per week. STEM bachelor’s and master’s graduates will get three-year post-study work visas, while doctorate holders will get four years.
A new temporary employment pathway will allow 5,000 skilled Indian professionals to work in New Zealand at any time for up to three years, especially in sectors such as IT, healthcare and education.
New Zealand has offered commitments in 118 services sectors, creating opportunities in IT, healthcare, education, financial services and telecommunications.
However, licensing requirements, gaps in recognition of qualifications and immigration rules could constrain uptake, finds GTRI.
Australian wine received price-based tariff cuts. Wine below US$5 per 750 ml bottle remains subject to 150% duty. For wine priced from US$5 to below US$15, duty falls to 100% immediately and 50% by Year 10. Wine priced at US$15 or more receives an immediate reduction from 150% to 75%, falling to 25% by Year 10.
New Zealand will immediately eliminate tariffs on all tariff lines, benefiting Indian textiles, garments, leather, carpets, ceramics, engineering goods and automotive components. Additional gains, however, will be limited because 58.3% of its tariff lines were already duty-free.
India will open about 70% of tariff lines, covering nearly 95% of New Zealand’s exports, including wool, wood, coal and wine. Dairy, sugar and edible oils remain excluded from tariff concessions.
Apples, kiwifruit, Mānuka honey and albumins receive concessions through tariff-rate quotas. Apple duties fall from 50% to 25% within a quota beginning at 32,500 tonnes and rising to 45,000 tonnes from Year Six. Concessional access applies only during April–August, subject to a minimum import price of US$1.25 per kilogram.
Strict food-safety standards, costly certification, high freight charges and lengthy shipping times remain obstacles for Indian exporters. India’s agricultural exclusions and quotas constrain New Zealand’s expansion.
“Signed on April 27, 2026, the agreement follows negotiations launched in 2010, stalled in 2015 and revived in March 2025. New Zealand Pact Becomes India’s 17th Operational FTA,” finds GTRI.
New Zealand’s US$20 billion investment objective over 15 years remains aspirational. Its investment in India has totalled less than US$1 billion over the past 25 years. The FTA links the objective to India’s expected nominal GDP growth; actual inflows will depend on growth, investor confidence and commercial returns, it said.
Bilateral goods trade stood at about US$1.23 billion in CY2025, comprising Indian exports of US$651.8 million and imports of US$575.9 million. India exported textiles and clothing, pharmaceuticals, petroleum products, machinery and auto components, while importing wood, wood pulp, metal scrap, coking coal, wool and fruit.
New Zealand government data put India’s services exports at US$255.8 million and imports at US$550 million in FY2025—a US$294.2 million deficit. India’s strengths include IT, telecommunications, healthcare and financial services; New Zealand’s exports centre on education, tourism, fintech and specialised aviation training.