New Delhi: The India-New Zealand Free Trade Agreement (FTA) came into force on Tuesday, marking India's 17th operational free trade pact and opening up new opportunities for Indian exporters, students and skilled professionals, according to a report by the Global Trade Research Initiative (GTRI).
Under the agreement, New Zealand will eliminate import tariffs on all Indian goods, benefiting sectors such as textiles, garments, leather, carpets, ceramics, engineering goods and automotive components. The pact also provides India with expanded access to New Zealand's services market and introduces new mobility pathways for Indian students and professionals.
"All Indian goods can now enter New Zealand at zero import duty," the GTRI report said, highlighting the immediate tariff benefits for Indian exporters.
The agreement, signed on April 27, 2026, follows negotiations that began in 2010, stalled in 2015 and resumed in March 2025.
On the services front, New Zealand has offered commitments across 118 sectors, including information technology, healthcare, education, financial services and telecommunications. Indian students will be permitted to work up to 20 hours a week, while STEM bachelor's and master's graduates will be eligible for three-year post-study work visas. Doctorate holders will be eligible for four-year post-study work visas.
The agreement also provides a temporary employment pathway for up to 5,000 skilled Indian professionals at any given time, for stays of up to three years, particularly in IT, healthcare and education. In addition, up to 1,000 young Indians annually will be able to live and work in New Zealand for 12 months under the Work and Holiday scheme.
"Services and mobility could deliver larger gains for India," the report said, pointing to the potential benefits beyond merchandise trade.
However, the agreement also opens parts of India's market to New Zealand exports, with India offering tariff concessions across about 70 per cent of tariff lines, covering nearly 95 per cent of New Zealand's exports. Dairy, sugar and edible oils remain excluded from tariff concessions, while products such as apples, kiwifruit, Mānuka honey and albumins receive concessions subject to specified quotas or other conditions.
Bilateral goods trade stood at approximately USD 1.23 billion in calendar year 2025, with Indian exports at USD 651.8 million and imports at USD 575.9 million, according to the report.
The agreement also sets an investment objective of USD 20 billion from New Zealand over 15 years. However, GTRI noted that the target remains aspirational, given that New Zealand's investment in India totalled less than USD 1 billion over the preceding 25 years.
"The agreement provides a framework for deeper cooperation," the report said, adding that stronger transport links, simpler compliance procedures, recognition of qualifications and business partnerships would be critical to translating market access into actual trade and investment gains.
The report further highlighted persistent challenges for Indian exporters, including stringent food-safety standards, certification costs, high freight charges and lengthy shipping times.
The agreement's overall impact will therefore depend not only on tariff reductions but also on how effectively businesses utilise the new market access and services opportunities.