The India-New Zealand Free Trade Agreement (FTA) came into force on Monday, creating a new framework for economic cooperation aimed at doubling bilateral trade from USD 2.4 billion to nearly USD 5 billion within five years.

Commerce and Industry Minister Piyush Goyal announced that the agreement had taken effect after being signed in April 2026. The pact covers tariffs, investment, professional mobility, education, traditional medicine and customs procedures.

Zero-Duty Access For Indian Exports

Under the agreement, New Zealand will provide immediate zero-duty access across all its tariff lines for Indian exports. The move removes its earlier peak tariffs of up to 10% on Indian goods.

India, meanwhile, will follow a phased approach to tariff liberalisation. It will open approximately 70% of its total tariff lines, covering 95% of the value of New Zealand’s exports.

India has retained protections for several sensitive sectors. Core dairy products, including butter and cheese, along with onions and specific metals, have been excluded from the tariff reductions to protect domestic farmers and industries.

USD 20 Billion Investment Commitment

New Zealand has committed to facilitating USD 20 billion in investments into India over a 15-year period under the agreement.

The investment commitment includes a performance safeguard clause aimed at ensuring accountability in the implementation of the pledge.

The agreement also establishes a dedicated pathway for skilled Indian professionals. An annual quota of 5,000 temporary work visas will be available to skilled Indian workers under the new framework.

New Opportunities For Indian Students

The FTA also expands mobility opportunities for Indian students graduating from institutions in New Zealand, with a particular focus on those pursuing STEM fields.

Students will have smoother academic pathways and access to extended post-study work visas ranging from three to four years.

The agreement also introduces a specialised framework covering India’s traditional medicine systems. In what has been described as a first for a New Zealand trade agreement, the pact provides legal recognition and promotes trade in systems including Ayurveda and Yoga.

Faster Customs Clearance

The agreement also seeks to reduce delays in cross-border trade through streamlined customs procedures.

Under the framework, standard cargo is to be cleared within 48 hours, while perishable goods will be subject to a 24-hour clearance requirement.

Agreement Finalised After Parliamentary Approval

The milestone trade agreement was signed in April 2026 before completing the approval process in both countries.

New Zealand Prime Minister Christopher Luxon said on Monday that the FTA had been finalised and was scheduled to enter into force this month following parliamentary approval earlier in September.

With the agreement now operational, India and New Zealand are seeking to expand trade, investment and professional and educational exchanges while maintaining protections for sectors considered sensitive by India.

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