In a significant step to strengthen economic ties, India and New Zealand have signed a Free Trade Agreement aimed at enhancing trade and investment between the two nations. The agreement was signed in the presence of Commerce and Industry Minister Piyush Goyal and New Zealand’s Trade and Investment Minister Todd McClay.
The FTA provides duty-free access for 100% of India’s exports to New Zealand, covering all tariff lines. This is expected to benefit MSMEs and create jobs by improving competitiveness in labour-intensive sectors such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods, and processed foods.
Earlier, New Zealand imposed tariffs of up to 10% on key Indian exports, including ceramics, carpets, automobiles, and auto components. With the new agreement, Indian goods will now compete on equal terms in the New Zealand market.
India has also secured duty-free access to key inputs like wooden logs, coking coal, and metal waste and scrap. This is expected to reduce production costs and improve global competitiveness for Indian manufacturers.
On its part, India has offered tariff liberalisation on 70.03% of tariff lines, covering 95% of bilateral trade value, while excluding 29.97% of tariff lines to protect sensitive sectors. These exclusions include dairy products, most animal products, key agricultural items like onions, chana, peas, corn, almonds, as well as sugar, oils, arms and ammunition, and selected metals and related products.
India will eliminate duties on 30% of New Zealand tariff lines, including goods such as wood, wool, sheep meat, and raw leather. Another 35.60% of tariff lines will see phased duty reductions over 3, 5, 7, and 10 years, covering petroleum oil, malt extract, vegetable oils, machinery, and peptones.
New Zealand products gaining tariff benefits include wine, pharmaceutical drugs, polymers, aluminium, iron and steel items. Only 0.06% of goods fall under tariff rate quotas, including Manuka honey, apples, kiwi fruit, and albumins.
The agreement also includes a commitment to facilitate $20 billion in investment into India, along with a rebalancing clause to address any shortfall in investment delivery.
Total bilateral trade between the two countries reached $2.4 billion in 2024.
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