The India-New Zealand Free Trade Agreement (FTA) is set to come into force on 20 October 2025, marking a significant shift in bilateral economic ties between the two nations. The agreement, which grants Indian exporters duty-free access to New Zealand across all tariff lines, is aimed at doubling bilateral trade by 2030.

Key Benefits for Indian Exporters

The FTA is expected to sharpen the competitive edge of Indian products in the New Zealand market across several high-value sectors. According to reports, the sectors poised to gain the most include textiles and garments, leather and footwear, gems and jewellery, engineering goods, and processed foods. By removing customs duties, Indian goods will become cheaper relative to competing imports, potentially opening new export avenues for businesses seeking a foothold in the Pacific market.

Notably, New Zealand has also committed to investments worth $20 billion in India over the next 15 years as part of the broader framework of the agreement, adding a significant capital-flow dimension beyond trade.

How Tariff Changes Will Unfold

The transition will not be immediate across the board. Some tariffs will disappear on 20 October itself, while others will phase down over several years. Certain agricultural concessions will remain subject to quotas and safeguards, reflecting the complexity of aligning two distinct agricultural economies.

India has agreed to reduce or eliminate tariffs on approximately 70 per cent of its tariff lines covering imports from New Zealand. Products receiving immediate duty-free entry include wood, wool, sheep meat, and raw hides.

Kiwi Fruit, Apples and the Quota System

For Indian consumers, the most tangible near-term impact may come from selected imported goods. Kiwi fruit is among the notable beneficiaries: in the first year of the agreement, up to 6,250 tonnes of New Zealand kiwi fruit will be eligible for duty-free entry, with the quota progressively rising to 15,000 tonnes by the sixth year. The concession, however, will be subject to conditions including a minimum import price and seasonal requirements.

In the case of apples, a tariff-rate quota mechanism applies, with the applicable duty set at 25 per cent — half the existing 50 per cent tariff — again subject to minimum import prices and seasonal conditions. This quota mechanism allows India to extend greater market access to New Zealand while limiting the exposure of domestic fruit growers to cheaper imports.

Sensitive Sectors Shielded

India has deliberately chosen not to liberalise its politically and economically sensitive dairy sector, which remains insulated from lower tariffs under the deal. Several other agricultural products have similarly been excluded to protect the livelihoods of millions of small and marginal farmers across the country. This comes amid longstanding concerns in India's farming community about the asymmetric impact of trade liberalisation on domestic agriculture.

This is consistent with India's broader FTA negotiating posture — including its approach to the Regional Comprehensive Economic Partnership (RCEP), which it ultimately walked away from in 2019 over dairy and agricultural concerns.

What Comes Next

With the 20 October implementation date now weeks away, industry bodies and exporters will be closely tracking the publication of sector-specific guidelines and quota administration frameworks. The agreement's success will hinge not just on tariff elimination, but on whether Indian exporters can scale up supply chains fast enough to capitalise on the newly opened access — and whether bilateral investment commitments translate into ground-level capital deployment.