The NZ-India Fair Trade Agreement has been described as a solid deal amid a global free trade retreat across many international markets.
The government has announced the conclusion of a NZ-India Free Trade Agreement (FTA), which reduces tariffs on 95 percent of New Zealand exports. Nearly 57 percent of New Zealand exports entering India will be tariff-free when the FTA comes into effect, rising to 82 percent over 10 years, with the remaining 13 percent of exports seeing reductions to tariffs.
Key sectors to benefit include sheep meat (down from 33 percent to 0 percent immediately), forestry products (down from 5.5-11 percent to 0 percent on most goods immediately), fruits (from 33-50 percent tariffs across apples, kiwifruit, cherries, avocados and more to lower or zero rate over time), wine (150 percent down to 25-50 percent over 10 years), and mānuka honey.
The FTA includes a right to negotiate for an upgrade if better access is granted in the future to other countries and includes preferential market access for apples and mānuka honey for the first time in an Indian trade deal.
Over the year to September 2025, New Zealand exported NZD 1.93 billion to India, making India New Zealand’s 10th largest export destination, taking 1.7 percent of total exported goods and services. Imports from India totalled NZD 1.88 billion over the same period, leaving a narrow NZD 47m trade balance. Travel to New Zealand was the largest export with India (NZD 1.05 billion), followed by fruits and nuts (NZD 114 million), then aluminium (NZD 83 million) and iron and steel (NZD 83 million).
In return, New Zealand will provide for 1,667 temporary three-year non-renewable work visas per year for Indian nationals in “priority jobs where New Zealand has skills shortages, including doctors, nurses, teachers, ICT and engineering… with all immigration screening and qualification/experience requirements remaining unaltered”.
An additional 1,000 places each year under the Working Holiday Scheme will be allocated for Indian nationals.
Ultimate authority to enact the requirements of the trade deal will rest with the Opposition, with NZ First exercising the “agree to disagree” provision of its coalition arrangements on the FTA and stating its intention to “vote against enabling legislation”.
On balance, Brad Olsen from Infometrics said the NZ-India FTA appears to be a success for the Government given the broad range of goods covered and the modest changes around immigration settings.
“It was, realistically, never going to achieve everything New Zealand exporters wanted, particularly on dairy and beef. But gains in other export groups are material, or at least provide the potential over time, as trade ties deepen.”
Olsen said it was important to keep in mind the context of trade around the world at present.
“To achieve an FTA when free trade is growing is one thing, it’s quite another to secure an FTA with a more inward-looking, but large and growing economy, when the approach to free trade globally is retreating. To get more free trade when free trade is shrinking is still unequivocally good.”
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