India and New Zealand Sign a New Free Trade Agreement: Sectors to Benefit

It took just thirteen months. From the first formal round of negotiations in March 2025 to a signed agreement on April 27, 2026, India and New Zealand moved at a pace that is genuinely unusual in the world of international trade. Most deals of this kind take years, sometimes decades. This one did not.

The signing took place at Bharat Mandapam in New Delhi. Union Minister of Commerce and Industry Piyush Goyal signed on India's behalf, while New Zealand's Trade and Investment Minister Todd McClay signed for his country. McClay did not come alone; he brought a cross party group of parliamentarians and more than 30 New Zealand businesses who had made the trip specifically to be present.

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A Relationship That Was Already Growing

The two countries were not starting from scratch. In the financial year 2024–25, two way merchandise trade between India and New Zealand stood at around $1.3 billion, a figure that was already 49% higher than the year before. When goods and services are included together, total bilateral trade reached $2.4 billion in 2024. New Zealand is India's second largest trading partner in the Oceania region, behind Australia.

Both governments have been clear that they see this agreement as a way to build on that momentum rather than simply lock in where things already stand.

What Indian Exporters Gain from India - New Zealand FTA

The Indian tariff reductions have only been extended to about 70% of tariff lines, accounting for about 95% of current bilateral trade. The remaining 30% consists of goods such as dairy produce, various agricultural produce, edible oils, sugar, rubber, and some types of metal. It is easy to see why these sectors are left out, especially when you consider that the domestic industries producing them could be adversely affected by increased foreign competition.

The sectors with the most to gain include textiles and apparel, leather goods and footwear, gems and jewellery, engineering goods, processed food, and pharmaceuticals. Indian manufacturers also benefit from duty free access to certain raw materials; they import wooden logs, coking coal, and metal scrap which should bring down production costs for industries that rely on them.

India's Side of the Bargain

India has offered tariff concessions on just over 70% of tariff lines, which covers around 95% of current two way trade by value. That leaves roughly 30% of product categories untouched, and the reasons for those exclusions are not hard to understand; they include dairy products, a range of agricultural goods, edible oils, sugar, rubber, and certain metals. These are areas where domestic industries and farming communities would face the sharpest adjustment if import competition increased suddenly.

Of the lines where India has offered concessions, about 30% will see duties removed immediately. A further 35% will be phased out gradually over three, five, seven, or ten years, giving businesses and workers time to adapt.

Four New Zealand product categories apples, kiwi fruit, Mānuka honey, and milk albumins sit in a separate category. They get access through tariff rate quotas, with minimum import prices and seasonal windows. It is a way of opening the door slightly while keeping a hand on the handle.

Farming, Research, and Practical Cooperation

The agreement goes well beyond tariffs when it comes to agriculture. Both sides have agreed to focused Action Plans covering kiwifruit, apples, and honey; designed not just to manage trade flows but to actively improve productivity, quality, and the capabilities of growers in India who work in these sectors.

The practical support being committed to is fairly detailed. It includes the establishment of Centres of Excellence, access to better planting material, capacity building programmes for growers, collaborative research, and technical assistance covering orchard management, post-harvest practices, supply chain performance, and food safety standards. Specific projects for apple cultivators and for sustainable beekeeping have been identified, with the aim of raising both output and quality over time.

Importantly, the market access that New Zealand gets for apples, kiwifruit, Mānuka honey, and milk albumins is directly tied to the delivery of these productivity plans. That access operates through a Tariff Rate Quota system, with minimum import prices and seasonal import windows built in to protect Indian farmers. A Joint Agriculture Productivity Council will monitor whether commitments on the productivity side are actually being met, so the arrangement is not simply a trade concession, but one where market access and on-the-ground outcomes are expected to move together, balancing market access with protection of sensitive domestic agricultural sectors. 

Beyond these headline products, agricultural cooperation under the agreement extends across a broader range of sectors: horticulture, honey, forestry, livestock, fisheries, apiculture, and wine are all included. This gives the partnership a wider base than most trade agreements tend to offer in the agricultural space, and suggests both sides see long-term value in building deeper sectoral ties rather than limiting cooperation to the areas where immediate commercial interest is most obvious.

Services, Professionals, and Students

New Zealand has opened up around 118 services sectors to Indian providers, including IT and computer services, professional services, telecommunications, construction, finance, tourism, and education. Most Favoured Nation commitments have been made across roughly 139 sub sectors.

For Indian professionals, the deal creates a new visa pathway, a Temporary Employment Entry visa with space for up to 5,000 people at any one time, each able to stay for up to three years. The occupations covered a wide range: AYUSH practitioners, yoga instructors, chefs, and music teachers sit alongside IT workers, engineers, healthcare professionals, and those working in construction.

The provisions for students are worth noting separately. For the first time in any of its trade agreements, New Zealand has created a dedicated pathway for Indian students. There will be no cap on numbers. Students can work up to 20 hours a week while studying. After graduating, STEM bachelor's and master's students can stay and work for up to three years; doctoral graduates get four years. On top of that, 1,000 young Indians a year will be eligible for working holiday visas, valid for twelve months.

Investment of $20 Billion in India, Medicines, and Cultural Recognition

The agreement also includes a commitment to facilitate $20 billion in investment into India, focused on renewables, digital services, infrastructure, agriculture, and manufacturing. A rebalancing clause has been written in, to be activated if actual investment falls short of what was promised.

On pharmaceuticals, the deal accepts inspection reports from regulators including the US FDA, the European Medicines Agency, and the UK's MHRA. That removes the need for duplicate inspections and should make it faster and cheaper for Indian drug and medical device companies to enter the New Zealand market.

New Zealand has committed to changing its geographical indications law within 18 months of the agreement coming into force, to allow Indian products beyond wines and spirits to be formally registered and protected, bringing India in line with how the European Union has been treated.

A dedicated chapter covers culture, traditional knowledge, and people to people connections. India's AYUSH health disciplines Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homeopathy receive formal recognition alongside Māori health practices. Cooperation in the audio visual industry, tourism, and sport is also included. There is even a Mutual Recognition Arrangement on organic products, built around Australian standards as a shared reference.

Standard cargo will be cleared within 48 hours under the new trade facilitation provisions; express and perishable shipments within 24 hours.

Conclusion

The Commerce Secretary of India had said that this was an opportunity for Indian companies to compete on equal footing in New Zealand, and there would be greater certainty in the uncertain world of international trade. McClay had referred to this as a “once in a generation” type of deal, which is perhaps what all such statements sound like at signing ceremonies, but the basic idea behind it does make sense. Deals of this magnitude involving India and a developed Pacific country don’t happen very often.

The next steps in this process depend on its execution. Companies must be made aware of their opportunities, the processes must be in place, and the promised investments must be fulfilled.