The pact is expected to significantly enhance competitiveness for labour-intensive industries and MSMEs, while also opening up new opportunities in services, mobility, and investment flows between the two countries.
Also Read: Explained | What’s inside India–New Zealand FTA: Tariff cuts, services push, farm safeguards & more
Landmark trade pact aimed at doubling bilateral trade
Signed in New Delhi, the India–New Zealand FTA is designed to deepen economic engagement and double bilateral trade from around $2.4 billion to $5 billion within five years. The agreement now awaits approval from New Zealand’s Parliament and India’s Union Cabinet.
A key feature of the deal is New Zealand’s elimination of tariffs across all 8,284 tariff lines, including the removal of duties on most Indian exports, while India has adopted a calibrated approach protecting sensitive sectors such as dairy and select agricultural goods.
Key sectors poised to gain
The agreement is expected to deliver the strongest boost to export-oriented and labour-intensive sectors:
- Textiles & apparel: Duty-free access improves price competitiveness and supports value-added exports
- Leather & footwear: Major gains for clusters such as Agra, dominated by MSMEs
- Engineering goods: Exports expected to nearly double to $280–300 million in five years
- Pharmaceuticals & medical devices: Faster regulatory approvals and reduced compliance burden
- Agriculture & processed foods: Select categories gain export opportunities and supply chain integration
- Wines & spirits: India allows phased tariff reduction on New Zealand wines over up to 10 years, while Indian wines and spirits gain duty-free access to New Zealand, opening a niche but growing premium beverage export opportunity
- Services (IT, consulting, tourism, education): Expanded market access across 118 sectors in New Zealand
Industry bodies say the deal also strengthens India’s push to build global supply chains in sustainable textiles, technical textiles and high-value manufacturing.
States and sectors set to gain from India-New Zealand FTA
State-level winners across India
The benefits of the agreement are expected to be widely distributed across export hubs:
- Gujarat: Chemicals, gems
- Maharashtra: Pharma, auto parts
- Tamil Nadu: Textiles, leather, engineering goods
- Uttar Pradesh: Leather, carpets, handicrafts (Agra emerges as key hub)
- Punjab: Agricultural products
- Karnataka: Electronics, pharma
- West Bengal: Tea, engineering goods
- Andhra Pradesh & Kerala: Marine products
- North-East: Tea, spices, bamboo, organic produce
Also Read: India–New Zealand FTA to double India’s engineering exports to $280–300 mn in five years
Zero-duty framework and tariff liberalisation
Under the agreement:
- India gets zero-duty access for most exports
- New Zealand removes tariffs on 100% of tariff lines
- India phases reductions on select categories while protecting sensitive sectors like dairy, sugar, edible oils, onions and spices
- Labour-intensive exports such as textiles, leather, footwear and engineering goods gain immediate tariff elimination
Services, mobility and investment push
Beyond goods, the agreement significantly expands services and movement of professionals:
- Market access across 118 service sectors including IT, finance, telecom and education
- MFN clause across 139 sub-sectors, ensuring future trade gains extend to India
- 5,000 skilled work visas for Indian professionals (up to 3 years)
- 1,000 working holiday visas annually for young Indians
- Recognition of Indian talent in IT, healthcare, engineering and AYUSH services
New Zealand has also committed $20 billion in investment over 15 years, targeting sectors such as education, tourism, logistics, construction and financial services.
Sector-wide tariff relaxation from India-New Zealand FTA
Wine, spirits and sensitive sectors
The agreement includes a phased approach to politically sensitive categories:
- New Zealand wines to enter India at gradually reduced tariffs over 10 years
- Indian wines and spirits gain duty-free access to New Zealand markets
- India retains protection for key agricultural sectors to safeguard domestic producers
Bottom line
The India–New Zealand FTA marks a broad-based trade expansion framework with zero-duty access, services liberalisation, investment commitments and mobility provisions.
However, the most immediate impact is expected in textiles, leather, engineering goods and pharmaceuticals, where reduced tariffs and improved market access are set to strengthen India’s export competitiveness and MSME participation in global trade.
(With inputs from TOI)