A Free Trade Agreement (FTA) between India and New Zealand is set to come into effect on October 20, aiming to double trade between the two nations by 2030. Under this agreement, Indian exporters will gain duty-free access to the New Zealand market across all tariff lines, a move expected to significantly boost the competitiveness of Indian products.
According to an article on the Khalsa Vox News website, sectors such as textiles and apparel, leather and footwear, gems and jewellery, engineering goods, and processed foods stand to benefit the most. The removal of import duties will make Indian products more competitive and affordable in New Zealand compared to those from other countries, thereby creating new opportunities for exporters. Another key aspect of the agreement is New Zealand’s commitment to invest $20 billion in India over the next 15 years. Both nations have also set a shared goal of doubling bilateral trade by 2030.
Once the FTA comes into force, its provisions will be implemented in a phased manner. Duties on some products will be eliminated immediately, while for other categories, they will be gradually reduced over several years. Quotas and safeguard measures have also been retained for certain agricultural products. Indian consumers may experience the most direct impact through products imported from New Zealand, such as kiwifruit, apples, and Manuka honey. However, the agreement does not fully open up the Indian market; the government has extended special protection to the dairy sector and several sensitive agricultural products.
Under the agreement, India has agreed to reduce or eliminate duties on approximately 70 percent of tariff lines for imports from New Zealand. Certain products—including wood, wool, sheep meat, and raw hides—will receive immediate duty-free access. For agricultural products, India has adopted a Tariff Rate Quota (TRQ) system, allowing limited quantities to be imported at lower duty rates, while safeguard measures will remain applicable to imports exceeding these limits. This arrangement seeks to strike a balance between market access and domestic interests.
Kiwi fruit is among the key beneficiaries of this arrangement. In the first year of the agreement, 6,250 tonnes of kiwi fruit can be imported duty-free from New Zealand; this limit will rise to 15,000 tonnes by the sixth year. However, minimum import price and seasonal conditions will apply. A quota has been set for apples as well; although they will be subject to a 25 percent import duty—half of the current 50 percent rate—minimum import price and seasonal conditions will apply here too. This approach aims to limit the impact of cheap imports on Indian fruit growers.
The most significant aspect of the agreement is that India has not opened its sensitive dairy sector to low-duty imports. Keeping in mind the livelihoods of millions of small farmers and livestock rearers, the government has excluded several agricultural products, including dairy, from this agreement.
