Why New Zealand Matters for India
New Zealand is India’s second-largest trading partner in Oceania. It is also one of the higher-income economies in the region, with per capita income of $49,380.
In 2024, New Zealand’s imports stood at $47 billion, while exports were $42 billion. The country also invests nearly 8% of its GDP overseas every year. As of March 2025, New Zealand’s total overseas investment was valued at $422.6 billion.
The people-to-people connection is another strong pillar of this relationship. Around 300,000 persons of Indian origin and NRIs live in New Zealand, forming nearly 5% of its population. This diaspora acts as a cultural and economic bridge, creating demand for Indian goods, services, education, wellness and professional skills.
Bilateral Trade Shows Strong Momentum
India-New Zealand trade has shown visible improvement in recent years. Merchandise trade rose from $873 million in 2023-24 to $1.3 billion in 2024-25, registering 49% growth.
India’s merchandise exports to New Zealand increased to $711 million in 2024-25, recording 32% growth. Services exports also gained traction, rising 13% in 2024 to reach $634 million. Key service segments include travel, IT and business services.
Over a longer period, bilateral merchandise trade increased from $855 million in 2015-16 to $1,298 million in 2024-25. During this period, India’s exports to New Zealand rose by 130%, while imports from New Zealand increased by only 7.21%. In 2024-25, India maintained a positive trade balance with New Zealand.
Duty-Free Access for Indian Exports
One of the most important features of the agreement is New Zealand’s decision to eliminate duties on 100% of its tariff lines for Indian exports from the date of Entry into Force.
New Zealand’s offer covers 8,284 tariff lines. Earlier, around 450 tariff lines covering key Indian exports attracted tariffs of nearly 10%. These included textiles, apparel, leather, headgear, ceramics, carpets, automobiles and auto components. New Zealand’s average applied tariff of 2.2% in 2025 will become zero from the date of implementation.
This is expected to benefit India’s labour-intensive sectors such as textiles, clothing, leather and footwear. It also supports emerging and advanced sectors, including automobiles, pharmaceuticals, plastics, rubber, electrical machinery, electronic machinery, mechanical machinery and chemicals.
Agricultural products such as fruits, vegetables, coffee, spices, cereals and processed foods are also expected to gain from better market access.
India Protects Sensitive Sectors
While New Zealand has offered zero-duty access on all tariff lines, India has taken a calibrated approach. India has offered market access on 70.03% of tariff lines, while keeping 29.97% of tariff lines under exclusion.
Immediate duty elimination applies to 30% of tariff lines. Another 35.60% of tariffs will be eliminated in phases over 3, 5, 7 and 10 years. These include petroleum oil, malt extract, vegetable oils, selected electrical and mechanical machinery and peptones.
A further 4.37% of products will see tariff reductions. These include wine, pharmaceutical drugs, polymers, aluminium, iron and steel articles. Around 0.06 per cent of items will be covered under Tariff Rate Quotas, including honey, apples, kiwi fruit and albumins, including milk albumin.
India has kept several sensitive sectors outside the agreement. These include dairy products such as milk, cream, whey, yoghurt and cheese; animal products other than sheep meat; vegetable products such as onions, chana, peas, corn and almonds; sugar; artificial honey; animal, vegetable and microbial fats and oils; arms and ammunition; gems and jewellery; copper articles; and aluminium products such as ingots, billets and wire bars.
Gains for MSMEs and Labour-Intensive Sectors
The FTA is expected to provide a boost to Indian MSMEs by opening zero-duty access in sectors that are employment-intensive.
Textiles, apparel, leather, footwear, gems and jewellery, engineering goods and processed foods stand to benefit from improved access to the New Zealand market. These sectors are closely linked with small businesses, export clusters and job creation.
For domestic industries, imports of wooden logs, coking coal and waste and scrap of ferrous and non-ferrous metals could support input availability and cost competitiveness.
Agriculture Cooperation and Farmer Productivity
The agreement goes beyond tariff concessions and includes agriculture technology cooperation. India and New Zealand have agreed on focused action plans for kiwifruit, apples and honey.
These plans aim to improve productivity, quality and sectoral capability for fruit growers in India. The cooperation includes Centres of Excellence, better planting material, capacity building for farmers, technical support for orchard management, post-harvest practices, supply chains and food safety.
Projects related to premium apple cultivars and sustainable beekeeping practices are also expected to improve production standards and quality.
New Zealand will receive managed market access for selected agricultural products such as apples, kiwifruit and Manuka honey. This will be handled through a Tariff Rate Quota system with minimum import prices and seasonal import rules. The structure is aimed at offering consumer choice while protecting Indian farmers.
The TRQs will be linked to agri-technology action plans and monitored by a Joint Agriculture Productivity Council.
Stronger Services Partnership
New Zealand has offered commitments across 118 services sectors and Most-Favoured Nation treatment in 139 sectors. This is one of the key pillars of the FTA, especially for India’s services-led economy.
The agreement opens opportunities in travel, IT, business services, education, healthcare, engineering and other professional services. It also supports future cooperation in sectors where India has strong talent depth and global competitiveness.
AYUSH and Traditional Medicine Get a Global Platform
For the first time, New Zealand has signed an annex with India to facilitate trade in Ayurveda, yoga and other traditional medicine services.
This provision gives formal recognition to India’s AYUSH systems, including Ayurveda, Yoga and Naturopathy, Unani, Sowa-Rigpa, Siddha and Homeopathy. It also places these alongside Maori health practices.
The annex is expected to support wellness services, medical value travel and collaboration in traditional medicine. It strengthens India’s position as a global hub for health, wellness and traditional medicine services.
Student Mobility and Professional Pathways
The FTA also includes important mobility provisions for Indian students and professionals.
New Zealand has signed an annex on student mobility and post-study work visas with India, the first such agreement it has signed with any country. Indian students will be allowed to work up to 20 hours per week while studying, even if future policy changes take place.
Post-study work visa benefits include up to 3 years for STEM bachelor’s graduates, up to 3 years for master’s graduates and up to 4 years for doctorate holders.
The agreement also provides a quota of 5,000 visas for skilled Indians for stays of up to 3 years. These will cover India’s sectors of interest, including AYUSH practitioners, yoga instructors, Indian chefs, music teachers, IT professionals, engineers, healthcare workers, education professionals and construction workers.
In addition, 1,000 young Indians every year will be eligible for a working holiday visa, allowing multiple entries into New Zealand for a 12-month period.
India-New Zealand FTA : $20 Billion Investment in India Over 15 Years
A major economic feature of the FTA is New Zealand’s commitment to invest $20 billion in India over 15 years. This is expected to strengthen long-term economic and strategic ties between the two countries.
The agreement also includes mutual recognition of organic certification for organic primary products. MSME cooperation will be supported through institutional linkages to help small businesses access trade-related information and global markets.
Technical assistance has also been agreed in areas such as AYUSH, audio-visual industries, tourism, sports and traditional knowledge systems.
Regulatory and Institutional Framework
The agreement includes several institutional provisions aimed at smoother trade.
For pharmaceuticals and medical devices, the FTA provides annexes for expedited regulatory pathways and recognition of inspections from trusted regulators such as the US, EU, UK and Canada.
On intellectual property rights, New Zealand has made a binding commitment to amend its laws within 18 months to provide EU-level protection for India’s Geographical Indications.
Customs and trade facilitation provisions include advance rulings, electronic documentation and faster clearance timelines. The agreement targets clearance within 48 hours, and within 24 hours for perishables.
The Rules of Origin framework has been designed to prevent circumvention and protect the integrity of preferential market access.
From Agriculture to Pharma: Key Sectors to Benefit from the India-New Zealand FTA
Sector
| India’s Exports
| Tariff Coverage
| Impact & Opportunity
|
Agriculture
| $51.8 billion in 2024–25, up from $48.3 billion in 2023–24; 7.3% growth.
| 1,379 tariff lines, accounting for 17% of all product tariff lines.
Elimination of tariffs at peak 5% (with tea already at zero duty).
| Fruits and vegetables: Enhances access for fresh produce and horticultural exports.
Coffee, tea, cocoa and spices: Supports exports of niche, premium and value-added agri-products.
Cereals: Improves the global competitiveness of Indian grain exports.
Processed foods: Benefits exports of ready-to-eat and processed food products, strengthening India’s food processing sector.
|
Marine
| $7.0 billion in FY25, up from $6.8 billion in FY24.
Exports to New Zealand rose from $15.35 million to $15.89 million in the same period.
| Marine sector covered across 363 tariff lines, accounting for 4.4% of total tariff lines.
Pre-FTA tariff peaks were up to 5%, now reduced to zero.
| New Zealand’s marine imports from the world averaged $0.26 billion.
Zero-duty access under the FTA supports higher market access and export growth.
|
Textiles & Clothing
| $36.9 billion in 2024–25, up from $34.8 billion in 2023–24; 6.1% growth.
Exports to New Zealand rose from $98.14 million to $103.14 million for the same period.
| 1,057 tariff lines, representing 13% of total tariff lines.
Pre-FTA peak tariffs were up to 10%, now fully eliminated to ensure zero-duty market access.
| New Zealand’s imports of textiles and clothing from the world averaged $1.90 billion over the last three years.
The move enhances India’s competitiveness and supports higher export growth in the New Zealand market.
|
Engineering Sector
| $77.5 billion in FY25, up from $64.4 billion in FY24; 20.3% growth.
Exports to New Zealand rose from $47.76 million to $68.26 million for the same period.
| Across 1,396 tariff lines, accounting for 16.9% of total tariff lines.
Pre-FTA average duty peaks were up to 10%, now eliminated.
| New Zealand’s engineering imports from the world averaged $11 billion in the last three years.
Zero-duty access under the FTA supports higher market access and export growth.
|
Leather & Footwear
| $5.5 billion in 2024–25, up from $5.3 billion in 2023–24.
Exports to New Zealand stood at $8.52 million in 2024–25.
| Removal of tariffs across 181 tariff lines covering footwear, leather goods and accessories.
Pre-FTA peak tariffs were up to 10%, now reduced to zero.
| New Zealand’s imports of leather, footwear and related products from the world averaged $0.51 billion over the last three years.
The move enhances India’s market access and supports higher exports in mid- to high-value segments, including leather footwear, finished leather, bags, belts, wallets and fashion accessories.
|
Pharmaceuticals
| $24.5 billion in 2024–25, up from $22.1 billion in 2023–24; 10.8% growth.
Exports to New Zealand stood at $57.52 million in 2024–25.
| Across 90 tariff lines.
Pre-FTA tariff peaks were up to 5%, now reduced to zero.
| New Zealand’s pharmaceutical imports from the world averaged $1.4 billion in the last three years.
The move expands market access and supports export growth.
|
Plastic & Rubber
| $13 billion in FY25, up from $12 billion in FY24.
Exports to New Zealand rose from $18.87 million to $23.66 million during the same period.
| Across 397 tariff lines, accounting for 4.8% of total tariff lines.
Pre-FTA average duty peaks were up to 10%, now eliminated.
| New Zealand’s plastics and rubber imports from the world averaged %$2.05 billion in the last three years.
Zero-duty access under the FTA supports higher market access and export growth.
|
Source: PIB
A Wider Strategic Opening
The India-New Zealand FTA is not only about tariff cuts. It brings together trade, investment, services, agriculture technology, education, mobility, MSMEs and regulatory cooperation under one framework.
For India, the agreement offers wider access to a high-income market, creates opportunities for labour-intensive exports, strengthens its services footprint and supports skilled mobility. For New Zealand, it opens deeper engagement with one of the world’s fastest-growing major economies.
With duty-free access for Indian exports, safeguards for sensitive sectors, a $20 billion investment commitment and new pathways for students and professionals, the FTA could become an important platform for India’s economic engagement with Oceania and the Pacific region.
