India-New Zealand FTA takes effect: zero duty on all Indian exports

The free trade agreement between India and New Zealand came into force at 12.01 am on Tuesday, October 20, 2026, giving every Indian export duty-free entry into New Zealand from the first day. Commerce and Industry Minister Piyush Goyal announced the start on October 19 and flagged off the first shipment under the pact, a JCB mini excavator made in Pune, Maharashtra. In return, India is cutting or removing duties on most New Zealand goods, but it has kept dairy and several farm products out of the deal.

A free trade agreement is a treaty in which two countries cut the import taxes, or tariffs, they charge on each other's goods, and often ease rules on services, investment and the movement of workers. New Zealand is a small market of about five million people, and trade between the two countries has been modest, at roughly $2.4 billion a year in goods and services. But the deal matters beyond its size.

For Indian exporters, the attraction is certainty. With every product line at zero duty from the first day, a garment maker in Tiruppur or a footwear unit in Agra can price goods for New Zealand buyers without waiting years for duties to fall in stages, as happens under many trade pacts. Labour-intensive industries, which employ large numbers of workers and compete with rivals from Bangladesh, Vietnam and China, stand to gain most if they can win orders.

For Indian farmers, the key point is what India left out. New Zealand is one of the world's biggest dairy exporters, and Indian dairy cooperatives and farm groups have long opposed opening the market to its milk powder and butter. By excluding dairy entirely and limiting fruit such as apples and kiwifruit through quotas and minimum prices, the government is trying to open export markets without exposing small farmers to cheaper imports. This approach is likely to be a template for India's other negotiations, including with larger dairy and farm exporters.

The deal also goes beyond goods. The 5,000-visa quota for skilled professionals, the $20 billion investment commitment and provisions promoting India's AYUSH traditional medicine systems give it a services and investment side that India has pushed for in recent agreements. The two governments aim to roughly double bilateral trade by 2030.

Short-term: Indian exporters can ship to New Zealand at zero duty from October 20 by using the preferential certificate of origin required under the agreement. New Zealand goods covered by India's concessions may become cheaper for Indian buyers as duties fall.

Long-term: If the investment pledge and visa route are used fully, the deal could deepen links in education, technology, food processing and health services. Its handling of dairy and farm goods is likely to shape India's approach in larger negotiations.

Who is affected: Indian exporters of textiles, leather, footwear, engineering goods, pharmaceuticals, processed food and seafood; skilled professionals and students looking to work in New Zealand; Indian dairy and apple farmers, who remain protected; and importers of New Zealand goods.

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