India Notifies First Tariff Cuts Under the New Zealand FTA: Quotas, Origin Rules and What Stays Protected
The Finance Ministry has notified the first set of customs duty cuts (lower import taxes) on goods from New Zealand under the India-New Zealand Free Trade Agreement (FTA). The new rates apply from 20 October 2026, the day the FTA comes into force.
The duty cuts come through Notification No. 32/2026-Customs, dated 16 October 2026, issued under Section 25(1) of the Customs Act, 1962. It has four tables: capped rates, concessional rates, concessional rates with conditions, and a tariff-rate quota (TRQ) table.
Sheep meat gets zero basic customs duty. Kiwi fruit valued at US$2.50 per kg or more pays 15%. Several types of fish pay 25.71%, with no farm cess or health cess. Wine and manuka honey (a costly honey from the flowers of New Zealand's manuka bush) also get lower duties.
Some farm goods get the low rate only for a fixed quantity each year (a quota). To claim any of these lower rates, the importer must prove the goods really come from New Zealand under the rules of origin, notified separately on 12 October 2026.
Dairy (milk, cream, whey, yoghurt, cheese, butter) and other sensitive farm goods such as onions, chana, sugar and edible oils are kept out of the duty cuts to protect Indian farmers.
India-New Zealand Relations: From Commonwealth Cousins to Strategic Partners
India and New Zealand are two democracies that share the Commonwealth, the English common law system and a love of cricket. New Zealand is a small island country in the south-west Pacific, with about 5 million people. For many years ties were friendly but thin. The free trade agreement signed in 2026 is the biggest step so far in turning that friendship into a real economic partnership.
The customs notification is the step that turns the signed FTA into actual lower taxes at India's ports. It is the first visible result of the new trade partnership, while the dairy exclusion shows where India drew its red line.
Tariff-Rate Quota (TRQ) Mechanism
A tariff-rate quota, or TRQ, is a two-level import tax. A fixed quantity of a product can come in at a low duty (the in-quota rate). Anything above that quantity pays the normal, higher duty (the out-of-quota rate). Think of it like a cinema that sells the first 100 tickets at a discount and the rest at full price. Countries use TRQs to open their market a little without exposing their own farmers to a flood of cheap imports.
The quota system is how India opened its market to New Zealand fruit and honey while still protecting apple growers in Himachal Pradesh and Jammu and Kashmir and its beekeepers. Only the quota quantity gets the cheap rate; the rest pays the old duty.
Rules of Origin (RoO)
Rules of origin are the tests that decide which country a product really "comes from". They matter because an FTA gives low duties only to goods made in the partner country. Without these rules, a third country could send its goods through the partner, add a label and sneak in at the low rate. This trick is called trade deflection.
The lower rates for sheep meat, kiwi fruit, fish and wine are available only to goods that pass these origin tests. This stops goods from other countries being routed through New Zealand to get India's cheaper FTA duties.
- FTA comes into force: 20 October 2026; signed 27 April 2026 in New Delhi
- Duty cuts: Notification No. 32/2026-Customs, dated 16 October 2026, under Section 25(1) of the Customs Act, 1962
- Rules of origin: Notification No. 82/2026-Customs (N.T.), dated 12 October 2026, under Section 5(1) of the Customs Tariff Act, 1975
- Sheep meat: 0% basic customs duty
- Kiwi fruit (US$2.50/kg or more): 15%; normal duty 33%
- Several fish lines: 25.71% basic customs duty, with zero farm cess and health cess
- Manuka honey: 75% cut in the 66% duty over five years, for up to 200 tonnes a year
- Apples: quota of 32,500 tonnes rising to 45,000 tonnes; in-quota duty 25% (normal 50%)
- India gives concessions on about 70% of tariff lines; dairy fully excluded
- New Zealand: duty-free access for all Indian goods; US$20 billion investment commitment over 15 years
- Proof of origin valid 12 months; records kept for 5 years