India-New Zealand Free Trade Agreement Comes into Force: Zero Duty for Indian Goods, New Visa Routes
The India-New Zealand Free Trade Agreement (FTA) came into force on 20 October 2026. It was signed in New Delhi on 27 April 2026, and New Zealand's Parliament passed the law to put it into effect in September 2026.
From day one, all Indian goods can enter New Zealand at zero import duty (tariff). Sectors expected to gain include textiles, garments, leather, carpets, ceramics, engineering goods and auto parts.
India will cut tariffs on about 70% of its tariff lines (product categories), covering nearly 95% of what New Zealand sells to India. Dairy, sugar and edible oils are kept out of the deal. Apples, kiwifruit, Manuka honey and milk albumins get concessions only within quotas or under conditions.
New Zealand has opened 118 services sectors (such as IT, health, education and finance) and created new mobility routes: up to 5,000 skilled Indian professionals at a time for up to three years, post-study work visas for students, and 1,000 Working Holiday visas a year for young Indians.
New Zealand has set an investment objective of USD 20 billion in India over 15 years. Both sides aim to double bilateral trade, which stood at about USD 1.23 billion in goods in calendar year 2025.
Trade experts describe it as India's 17th operational FTA. They point out that strict food-safety rules, certification costs and high freight costs may still limit gains for Indian exporters.
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 import taxes on most goods they trade with each other. Each country keeps its own tariffs for outsiders. Modern FTAs also cover services, investment, movement of people and trade rules. World Trade Organization (WTO) rules normally say a country must treat all members equally, but they allow FTAs as an exception if the deal covers "substantially all trade".
The India-New Zealand pact is a classic modern FTA. It is unequal in tariff cuts (New Zealand opens fully, India opens partly) but balances this with services and investment promises. It shows India's newer approach of signing FTAs with developed economies while protecting its farmers.
India-New Zealand Relations: From Commonwealth Cousins to Strategic Partners
India and New Zealand are democracies that share Commonwealth membership, the common law system and a love of cricket. New Zealand is a small island country in the south-west Pacific, south-east of Australia, with about 5 million people. For many years ties were friendly but thin, built mainly on people and education links. The 2026 trade agreement gives the relationship a strong economic base for the first time.
The entry into force of the FTA moves India-New Zealand ties from goodwill to hard economic links. It also fits India's Indo-Pacific outreach to Pacific countries.
GATS and the Four Modes of Trade in Services
Services, like software, teaching or medical care, can be traded across borders just like goods. The WTO's General Agreement on Trade in Services (GATS), in force since 1 January 1995, groups services trade into four "modes" based on where the supplier and the customer are. Trade deals use these modes to state exactly which services a country opens, and how.
Trade experts say the services and mobility chapter may bring India bigger gains than the goods tariff cuts. That is because India's strength is in services, and New Zealand needs skilled workers in IT, health and education.
- Entry into force: 20 October 2026; signed: 27 April 2026, New Delhi
- Talks: began 2010, stalled 2015, relaunched 16 March 2025, concluded 22 December 2025
- Described as India's 17th operational FTA
- New Zealand: zero duty on 100% of Indian goods from day one
- India: tariff concessions on about 70% of tariff lines, covering about 95% of New Zealand's exports
- Excluded by India: dairy, sugar, edible oils; quota/conditional access: apples, kiwifruit, Manuka honey, albumins
- Services: 118 sectors opened by New Zealand
- Mobility: 5,000 skilled professionals at a time (up to 3 years); 1,000 Working Holiday visas per year; students may work 20 hours a week
- Investment objective: USD 20 billion over 15 years
- Bilateral goods trade (2025): about USD 1.23 billion