India–New Zealand sign free trade deal: Duty-free access, $20 billion investment, MSME boost—key points

India–New Zealand FTA: India and New Zealand on Monday signed a free trade agreement (FTA) aimed at boosting two-way trade and investment, Union Commerce and Industry Minister Piyush Goyal said. The deal was signed in the presence of visiting New Zealand Trade and Investment Minister Todd McClay.

In a post on social media platform X, Goyal called the agreement “India’s first women-led” FTA and a “defining milestone” in the bilateral economic journey between the two countries. He added that the deal was concluded in nine months and “reflects deep mutual trust, shared ambition, and a common commitment to prosperity.”

India-NZ Free Trade Agreement: Top things to know

• According to Goyal, the agreement grants 100% duty-free access for Indian exports to New Zealand, “opening significant opportunities for MSMEs, farmers, women, youth, professionals, and job-creating sectors, while safeguarding India’s sensitive interests through a balanced and calibrated framework.”
• “This forward-looking agreement will also facilitate $20 billion in investment into India, deepening cooperation in trade, services, investment, innovation, mobility, agricultural productivity, and education, while creating pathways for skilled talent and students,” he added.

• The deal covers all tariff lines, or product categories, and is “expected to significantly boost MSMEs and employment by enhancing competitiveness in labour-intensive sectors such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods, and processed foods.”
• Notably, New Zealand had earlier maintained peak tariffs of up to 10 per cent on key Indian exports, including ceramics, carpets, automobiles, and auto components.

• “With zero-duty market access from the entry into force, at par with New Zealand’s other trade partners, Indian products will be fully competitive in that country, enjoying a level playing field,” he added.
• India has also secured duty-free access to inputs for its manufacturing sector, including wooden logs, coking coal, and waste and scrap metals, lowering production costs and enhancing the global competitiveness of Indian industry.
• On the other hand, 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 its sensitive sectors.

• Products kept in the exclusion list include dairy (milk, cream, whey, yoghurt, cheese), animal products (other than sheep meat), agricultural products (onions, chana, peas, corn, almonds), sugar, artificial honey, animal, vegetable or microbial fats and oils, arms and ammunition, gems and jewellery, copper and its articles (cathodes, cartridges, rods, bars, coils), and aluminium and its articles (ingots, billets, wire bars), among others.
• On 30% of New Zealand’s tariff lines, India will eliminate duties on goods such as wood, wool, sheep meat, and leather (raw hides).
• Similarly, 35.60% of tariff lines will see phased duty elimination over 3, 5, 7, and 10 years, including petroleum oil, malt extract, vegetable oils, selected electrical and mechanical machinery, and peptones.

• New Zealand products that will enjoy tariff reductions include wine, pharmaceutical drugs, polymers, aluminium, iron and steel articles, and goods under tariff rate quotas, such as Manuka honey, apples, kiwifruit, and albumins, including milk albumin.
• The FTA also includes a commitment to facilitate $20 billion in investment into India. “A rebalancing clause is incorporated into the agreement to provide a framework for addressing any shortfall in investment delivery, thereby ensuring robust and tangible economic outcomes.”

India-New Zealand FTA: How has industry reacted?

According to Gautam Khattar, Principal at Price Waterhouse & Co LLP, the India–New Zealand FTA is a significant milestone with a balanced tariff concession framework.

“New Zealand’s grant of 100 % duty‑free access will strengthen India’s competitiveness across key manufacturing and labour‑intensive sectors in textiles, leather, footwear, engineering goods, plastics and processed foods.

“India has adopted a calibrated approach, with immediate elimination on 30 per cent of tariff lines, phased reductions on 35.6%, and exclusions for sensitive sectors such as dairy and key agricultural products,” Khattar noted.

He added that the tariff‑rate quotas with minimum import prices safeguard domestic farmers, while explicit recognition of AYUSH and related wellness services expands opportunities for Indian practitioners in New Zealand.

(With inputs from PTI)