New Delhi: The India-New Zealand Free Trade Agreement (FTA), signed on April 27, came into effect on Tuesday, providing duty-free access to a range of Indian goods, including products from labour-intensive sectors such as textiles and leather.
It is the seventh trade pact to come into force in the last five years.
The others are agreements with the UAE, Mauritius, the European Free Trade Association (EFTA) bloc, the UK, Oman and Australia.
Signed on April 27, 2026, the agreement follows negotiations launched in 2010, stalled in 2015 and revived in March 2025. The pact becomes India’s 17th operational FTA.
New Zealand Prime Minister Christopher Luxon said “As of today, our historic Free Trade Agreement with India is in effect. Working closely with Prime Minister @narendramodi, we’ve delivered a deal that will help grow both of our economies”.
He said that from Tuesday, Kiwi businesses can reach over a billion more customers with significantly reduced tariffs.
“That means it’s easier for Kiwi businesses to sell more, hire more staff, invest in machinery and expand, creating more jobs and higher wages for Kiwis. That’s more money flowing into Kiwi communities. That’s why National has been hustling on the world stage, getting trade deals done,” Luxon said in a social media post.
According to experts, the sectors benefiting from the FTA are textiles and apparel, leather and footwear, engineering goods and auto components, gems and jewellery, agriculture and processed foods, pharmaceuticals, and other manufacturing industries.
Gulzar Didwania, Partner, Deloitte India, said the deal is expected to support higher FDI inflows into India, but the scale of any increase remains uncertain and will depend on private-sector investment decisions.
New Zealand has committed FDI worth USD 20 billion in over 15 years.
“The FTA’s provisions on duty-free access for certain inputs, bilateral cumulation, customs facilitation, and investment-promotion mechanisms may encourage deeper value-chain integration and improve investment conditions,” he said.
He added that the pact has significance beyond trade, strengthening India’s strategic position in the Indo-Pacific, expanding its network of FTAs with developed economies.
At a time of growing global trade uncertainty, the India-New Zealand FTA is a strong endorsement of open markets and predictable trade rules. Its target of doubling bilateral trade by 2030 sets an ambitious agenda for both countries.
What makes this FTA particularly valuable is that it goes beyond goods to cover services, investment, skills and mobility, creating fresh opportunities for Indian professionals and businesses.
With 100 per cent of Indian exports gaining duty-free access to New Zealand from day one, the agreement gives Indian exporters a significant competitive advantage. MSMEs in textiles, leather, footwear and engineering goods are particularly well placed to benefit.
Economic think tank Chintan Research Foundation (CRF India) President Shishir Priyadarshi said that at a time of growing global trade uncertainty, the India-New Zealand FTA is a strong endorsement of open markets and predictable trade rules.
“What makes this FTA particularly valuable is that it goes beyond goods to cover services, investment, skills and mobility, creating fresh opportunities for Indian professionals and businesses,” he said.
Trade expert and Hi-Tech Gears Chairman Deep Kapuria said the FTA operationalisation with New Zealand completes India’s preferential market access in all major countries of the Asia-Pacific region.
“New Zealand is a very open economy; India has very well crafted this trade deal by securing market access for new services such as Ayush, yoga instructors and student mobility, including post-study work visa,” he said.
Bilateral trade declined by about 11 per cent to USD 1.15 billion in 2025-26 from USD 1.3 billion in the previous fiscal year. India’s exports stood at USD 566.51 million, while imports were USD 589.1 million, resulting in a meagre trade deficit of USD 22.59 million for India.
Rani Singh, Indian-origin New Zealander, said the deal is an important step forward for both countries as it is not just about trade; it is about bringing the two countries closer, creating opportunities for businesses and people, and building a stronger relationship for the future.
“India now has an opportunity to build its own strong partnership with New Zealand. With duty-free access to New Zealand for all Indian export tariff lines from day one, Indian businesses can become more competitive in this market,” she said.
Singh added that the benefits are not limited to goods as there is also scope for greater cooperation in education, tourism, technology, professional services and investment.
Greater opportunities for eligible skilled professionals and young people can further strengthen these connections, she said.
