India-New Zealand Free Trade Agreement Comes into Force: Zero Duty for All Indian Goods
The India-New Zealand Free Trade Agreement (FTA) comes into force on 20 October 2026. From that day, trade between the two countries will follow the new, lower tariff (import tax) rates.
New Zealand will charge zero import duty on 100% of its tariff lines for goods coming from India. Earlier, some Indian goods paid up to 10% duty there. Sectors like textiles and apparel, leather and footwear, engineering goods, processed food, auto parts, and gems and jewellery gain the most.
India, in return, gives tariff cuts on about 70% of its tariff lines (separate product categories in the customs list). These cover about 95% of the value of bilateral trade. About 30% of lines stay fully protected, including dairy, some animal products, onions, chana, peas, corn, almonds and edible oils.
More than half of New Zealand's exports to India become duty-free on day one. A second round of Indian tariff cuts follows from 1 January 2027.
Beyond goods, New Zealand has committed to help bring US$20 billion of investment into India over 15 years, and has opened a work-visa route for up to 5,000 skilled Indian professionals at any one time. Customs clearance timelines are also being made faster under the deal.
The timeline: talks launched on 16 March 2025, concluded in about nine months (December 2025), the deal was signed in New Delhi on 27 April 2026, and both sides completed ratification (formal approval) in September 2026.
Free Trade Agreements: Concept and WTO Framework
A Free Trade Agreement (FTA) is a deal in which two or more countries remove or sharply cut tariffs on most goods traded between them. Each country still keeps its own tariffs for countries outside the deal. Modern FTAs also cover services, investment, movement of professionals and customs rules. Under World Trade Organization (WTO) rules, an FTA is allowed as an exception to the "treat everyone equally" rule, but only if it covers "substantially all the trade" between the partners.
The India-New Zealand deal shows the classic FTA trade-off. India gets full zero-duty access for its labour-heavy exports, while protecting farm sectors that employ millions of small producers. It must still meet WTO's "substantially all trade" test, which is why India covers about 95% of trade value even though it excludes 30% of tariff lines.
India-New Zealand Relations: From Commonwealth Cousins to Strategic Partners
India and New Zealand are two democracies linked by the Commonwealth, English common law, cricket and a large Indian-origin community in New Zealand. For decades the relationship stayed small because the two economies are far apart and New Zealand's main export, dairy, is the sector India protects most. Since 2025 the relationship has moved faster, with a trade deal, an investment pledge and closer Indo-Pacific cooperation.
The FTA's entry into force on 20 October 2026 is the biggest step in this relationship so far. It turns a small, dairy-blocked trade relationship into a rules-based partnership covering goods, services, investment and people.
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 zero or low duty only to goods that truly come from the partner country. Without them, a third country could ship goods through the partner and enjoy the low tariff without signing anything. Exporters prove origin with a certificate of origin, and customs officers check it at the border.
Indian exporters can claim New Zealand's zero duty from 20 October 2026 only if their goods meet the FTA's origin rules. The strict bilateral cumulation also prevents goods from other countries being routed through New Zealand into India at the new low rates.
- Entry into force: 20 October 2026 (Dussehra)
- Talks launched: 16 March 2025; concluded: December 2025 (about nine months); signed: 27 April 2026, New Delhi
- New Zealand: zero duty on 100% of tariff lines for Indian goods from day one (earlier duties up to 10%)
- India: concessions on about 70% of tariff lines, covering about 95% of bilateral trade value; about 30% excluded
- Excluded by India: dairy, some animal products, onions, chana, peas, corn, almonds, vegetable and microbial fats and oils
- Second round of Indian tariff cuts: 1 January 2027
- Investment pledge: US$20 billion over 15 years
- Temporary Employment Entry: 5,000 Indian professionals at any one time; 1,000 working holiday visas a year
- Bilateral merchandise trade: US$1.3 billion in 2024-25 (up 49% from US$873 million in 2023-24)
- Bilateral safeguard mechanism available for up to 14 years; only bilateral cumulation in rules of origin