India’s free trade agreement (FTA) with New Zealand comes into force on Tuesday, giving Indian goods duty-free access across the country’s market and opening new opportunities for students and skilled professionals. However, the immediate boost to merchandise exports could be modest, with services and professional mobility emerging as potentially bigger gains, according to the Global Trade Research Initiative (GTRI).
New Zealand will eliminate import duties on all Indian goods from October 20, benefiting exporters of textiles, garments, leather, carpets, ceramics, engineering goods and automotive components. Yet 58.3% of New Zealand’s tariff lines were already duty-free, limiting the additional advantage for many Indian exporters.
“Given the limited scale of bilateral trade, the India–New Zealand FTA is less a trade breakthrough than a framework for deeper cooperation,” said Ajay Srivastava, founder of GTRI, in an earlier analysis of the agreement.
The pact, signed on April 27, 2026, marks India’s 17th operational FTA. Negotiations began in 2010, stalled in 2015 and resumed in March 2025.
India will open about 70% of its tariff lines, covering nearly 95% of New Zealand’s exports, including wool, wood, coal and wine. Dairy, sugar and edible oils have been excluded from tariff concessions, while certain other agricultural products will receive preferential access subject to quotas and safeguards.
Services, visas could deliver bigger gains
New Zealand has made commitments across 118 services sectors, creating opportunities for Indian businesses in information technology, healthcare, education, financial services and telecommunications.
“Services may deliver bigger gains than goods, with New Zealand offering commitments in 118 sectors and MFN treatment in 139 sectors,” Srivastava said in an assessment of the agreement published by Fortune India.
Indian students will be permitted to work up to 20 hours a week under the agreement’s commitments. Graduates with bachelor’s and master’s degrees in science, technology, engineering and mathematics will be eligible for three-year post-study work visas, while doctorate holders will receive four years.
A temporary employment pathway will allow up to 5,000 skilled Indian professionals to be in New Zealand at any given time for stays of up to three years, particularly in IT, healthcare and education. The pact also provides for a Work and Holiday scheme for up to 1,000 young Indians annually, allowing stays of up to 12 months.
The benefits will depend on how effectively professionals can navigate immigration requirements, licensing rules and qualification-recognition procedures. Regulated occupations could face particular hurdles despite the expanded access.
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Apple imports could pressure domestic growers
The agreement’s agricultural provisions offer New Zealand selective access to India, with safeguards intended to limit disruption to sensitive domestic sectors.
Apples, kiwifruit, Mānuka honey and albumins will receive concessions through tariff-rate quotas. For apples, India will cut the import duty from 50% to 25% within an initial quota of 32,500 tonnes, rising to 45,000 tonnes from the sixth year.
The concessions will apply only during April-August and will be subject to a minimum import price of $1.25 per kg. Even with these restrictions, additional competition could put pressure on apple growers in Jammu and Kashmir and Himachal Pradesh.
Albumin duties will be halved to 11% within specified quotas.
Wine will receive price-based tariff reductions. Bottles priced below $5 per 750 ml will continue to attract a 150% duty. For wine priced at $5 or more but below $15, the duty will fall to 100% immediately and to 50% by the 10th year. For bottles priced at $15 or more, the duty will drop immediately from 150% to 75%, before declining to 25% by the 10th year.
GTRI has described India’s approach to tariff concessions as calibrated, with selective market opening alongside protections for politically sensitive agricultural sectors.
$20 billion investment ambition faces a test
The agreement sets an objective for New Zealand to invest $20 billion in India over 15 years. However, the target remains aspirational: New Zealand’s investment in India has totalled less than $1 billion over the past 25 years.
Actual inflows will depend on India’s economic growth, investor confidence and commercial returns. The agreement creates a framework for investment cooperation but does not guarantee that the stated amount will materialise.
GTRI has cautioned more broadly that trade agreements alone cannot overcome structural weaknesses that constrain export competitiveness. Infrastructure gaps, logistics costs, regulatory hurdles and limited integration into global value chains can prevent businesses from translating improved market access into higher exports.
Trade remains modest, services deficit persists
Bilateral merchandise trade stood at about $1.23 billion in calendar year 2025, comprising Indian exports of $651.8 million and imports of $575.9 million.
India’s exports included textiles and clothing, pharmaceuticals, petroleum products, machinery and automotive components. Imports from New Zealand included wood, wood pulp, metal scrap, coking coal, wool and fruit.
Services trade presents a different picture. New Zealand government data show that India exported services worth $255.8 million to New Zealand in FY2025, while imports stood at $550 million, leaving India with a deficit of $294.2 million.
India’s services strengths include IT, telecommunications, healthcare and financial services. New Zealand’s exports to India are concentrated in education, tourism, fintech and specialised aviation training.
The new commitments could help Indian service providers expand their presence in New Zealand, although the existing deficit highlights the gap between market access and realised commercial gains.
Export competitiveness will determine the outcome
Indian exporters will continue to face stringent food-safety standards, costly certification, high freight charges and lengthy shipping times. These barriers could limit the benefits of lower tariffs, particularly for agricultural and other time-sensitive shipments.
New Zealand, meanwhile, will have to navigate India’s exclusions and quota restrictions in sectors such as dairy and selected agricultural products.
The agreement also builds on people-to-people links, with more than 300,000 people of Indian origin living in New Zealand. Better transport connections, simpler compliance procedures, recognition of qualifications and stronger business partnerships will be crucial to converting the pact’s provisions into sustained trade and investment.
For India, the agreement’s immediate gains are clear in tariff access and mobility commitments. Whether it delivers a lasting export boost will depend on the ability of businesses to compete on cost, quality and delivery, rather than on tariff reductions alone.