India-New Zealand Free Trade Agreement Comes Into Force: Duty-Free Access, Apple Quotas and What It Means
The India-New Zealand Free Trade Agreement (FTA) came into force on October 20, 2026. It was signed in New Delhi on April 27, 2026, and New Zealand's Parliament passed the law to put it in place on September 16.
New Zealand has removed import duties on 100% of its tariff lines for Indian goods. Labour-intensive sectors like textiles, garments, leather, footwear, carpets and ceramics, plus engineering goods and auto parts, stand to gain.
In return, India will open about 70% of its tariff lines, covering nearly 95% of New Zealand's exports (such as wool, wood, coal and wine), either duty-free or at lower duties. Dairy, sugar and edible oils are kept out of the deal to protect Indian farmers.
Apples, kiwifruit and MÄnuka honey get lower duties only up to a fixed quantity (a tariff-rate quota). Apple duty falls from 50% to 25% for a quota of 32,500 tonnes, rising to 45,000 tonnes from the sixth year, only in April-August and only above a minimum price of US$1.25 per kg.
The deal includes new work-visa categories for Indian professionals, better post-study work rights for some Indian graduates and a working holiday scheme. New Zealand has committed to facilitating about US$20 billion of investment into India over 15 years.
This is India's 17th operational FTA. Trade experts note the real gain may be smaller than the headline, because about 58.3% of New Zealand's tariff lines were already duty-free before the deal.
Free Trade Agreements: Concept and WTO Framework
A Free Trade Agreement (FTA) is a deal between two or more countries to remove or sharply cut import taxes (tariffs) on most of the goods they trade with each other. Modern FTAs often also cover services, investment, movement of professionals and rules on standards. Normally, World Trade Organization (WTO) rules say a country must treat all members equally. FTAs are a permitted exception to this rule, as long as they cover "substantially all the trade" between the partners.
The India-New Zealand deal is unequal in form but balanced in intent: New Zealand removes duties on all Indian goods, while India opens about 70% of its lines and protects sensitive farm sectors. Whether Indian exporters gain will depend on competitiveness, not just on zero tariffs.
Tariff-Rate Quota (TRQ) Mechanism
A tariff-rate quota, or TRQ, is a two-level import tax. A country lets a fixed quantity of a product come in at a low tax, called the in-quota rate. Anything imported above that quantity pays the normal, higher tax, called the out-of-quota rate. This lets a country open its market a little while still protecting its own farmers from a flood of imports.
India used TRQs, seasonal windows and minimum prices to open the door to New Zealand apples while limiting harm to growers in Himachal Pradesh and Jammu and Kashmir. How much pressure these growers face will depend on the volumes and prices that actually enter under the quota.
India-New Zealand Relations: From Commonwealth Cousins to Strategic Partners
India and New Zealand are two democracies that share Commonwealth membership, the English common law system and a strong cricket connection. They are far apart on the map but meet in the Indo-Pacific region. For many years trade between them stayed small, mainly because New Zealand wanted access for its dairy products, which India treats as highly sensitive. The FTA marks a turning point in economic ties.
By keeping dairy out and still closing a deal, India and New Zealand have removed the old roadblock in their relationship. The FTA gives the partnership an economic base to match their shared interests in the Indo-Pacific.
- Signed: April 27, 2026 (New Delhi); in force: October 20, 2026
- India's 17th operational FTA; 7th trade pact to come into force in the last five years
- New Zealand: zero duty on 100% of tariff lines for Indian goods (58.3% of its lines were already duty-free)
- India: opens about 70% of tariff lines, covering about 95% of New Zealand's exports
- Excluded from India's concessions: dairy, sugar, edible oils
- Apples: duty 50% to 25% within a TRQ of 32,500 tonnes (45,000 tonnes from year six); April-August window; minimum price US$1.25/kg
- Wine below US$5 per 750 ml: stays at 150% duty
- Trade target: NZ$7 billion by 2030; investment commitment: about US$20 billion over 15 years
- Negotiations: launched March 2025, concluded December 22, 2025