India-New Zealand free trade agreement: How India plans to protect sensitive sectors, farmer incomes, rural economies

The India-New Zealand Free Trade Agreement (FTA) ensures protection to farmers, rural economies and the domestic industry, according to a release from the Union Ministry of Commerce and Industry. As part of this protection for sensitive sectors, market access excludes dairy, key agricultural products. coffee, milk, cream, cheese, yoghurts, whey, caseins, onions, sugar, spices, edible oils, and rubber, it added.

India-NZ deal: ‘Calibrated market access, sensitive sectors protected’

India has offered tariff liberalisation on 70.03% of tariff lines covering 95% of bilateral trade value, while keeping 29.97% of tariff lines excluded to protect India's sensitive sectors, the statement added.

Products kept in exclusion are:

• Agricultural products (onions, chana, peas, corn, almonds etc.)
• Animal products (other than sheep meat),
• Animal, vegetable or microbial fats and oils,
• Aluminium and articles thereof (billets, ingots, wire bars)
• Artificial honey
• Arms and Ammunition,
• Copper and Articles thereof (bars, cathodes, cartridges, coils, rods, etc.),
• Dairy (cheese, cream, milk, whey, yoghurt, etc.),
• Gems and Jewellery,
• Sugar.

Other protection measures include:

• 30% of tariff lines will have immediate duty elimination, covering wood, wool, sheep meat, leather, raw hides, etc.
• 35.60% of tariffs are subject to phased elimination over 3, 5, 7, and 10 years, including petroleum oil, malt extract, vegetable oils, and selected electrical and mechanical machinery, peptones, etc.
• 4.37% of products face tariff reductions, such as wine, pharmaceutical drugs, polymers, aluminum, iron and steel articles.
• 0.06% fall under tariff rate quotas, including Mānuka honey, apples, kiwi fruit, and albumins, including milk albumin.

‘Protect agricultural productivity, farmer incomes and rural economies’

• Market access for the selected agricultural products (Apples, Kiwifruit, and Mānuka Honey) and Albumins from New Zealand will be managed through a Tariff Rate Quota system with Minimum Import Price and other safeguards, ensuring quality imports and consumer choice while protecting domestic farmers.
• All Tariff Rate Quotas for Apples, Kiwifruit and Manuka are paired with delivery on Agriculture Productivity Action Plans and monitored by a Joint Agriculture Productivity Council (JAPC), balancing market access with protection of sensitive domestic agricultural sectors.

‘Shared ambition, deepening engagement, commitment to mutually beneficial growth’

India and New Zealand today signed a Free Trade Agreement in Delhi, which aims to strengthen India’s global economic partnerships and marks a new and significant chapter in the bilateral relationship with New Zealand. Todd McClay, Minister for Trade and Investment for the southern country, in the statement called it a “once-in-a-generation” opportunity that will boost exports, create jobs, and strengthen bilateral economic ties.

McClay also highlighted strong participation from New Zealand businesses at the signing and said the pact will improve market access, reduce trade barriers, and support MSMEs.

Further, India's Union Minister for Commerce and Industry Piyush Goyal called the deal a “defining milestone in India’s engagement with the developed world”. He added that this is India's ninth such agreement in the past few years — with 38 developed countries.

“At the heart of the agreement is the empowerment for exports, agricultural productivity, student mobility, skills, investment and services. The investment commitment of $20 billion from New Zealand signals strong confidence in India’s growth story. It places special emphasis on strengthening MSMEs, fostering innovation, and enabling women-led enterprises to thrive in global markets,” Goyal stated.