India-New Zealand FTA enters into force, giving all Indian exports duty-free entry
In one line: From 20 October 2026, all Indian goods enter New Zealand duty-free, while India opens about 70% of its tariff lines and keeps dairy and other sensitive goods out.
Published 20 October 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work
The India-New Zealand Free Trade Agreement (FTA) entered into force on 20 October 2026, nearly six months after Commerce Minister Piyush Goyal and New Zealand's Trade Minister Todd McClay signed it at Bharat Mandapam, New Delhi, on 27 April 2026. Talks were launched on 16 March 2025 and concluded on 22 December 2025 after five formal rounds. Both countries completed their domestic procedures in September 2026. What changes now: New Zealand gives duty-free access to 100% of India's exports, covering all tariff lines, ending peak tariffs of up to 10% on goods such as ceramics, carpets, automobiles and auto components. Indian industry also gets duty-free inputs such as wooden logs, coking coal and metal waste and scrap.
India's offer is narrower. It liberalises 70.03% of its tariff lines, covering 95% of bilateral trade by value: 30.00% of lines are eliminated immediately, 35.60% phased out over 3 to 10 years, 4.37% reduced and 0.06% placed under tariff-rate quotas. The remaining 29.97% are excluded, mainly dairy, sugar, edible oils, onions, arms and ammunition, gems and jewellery, copper and aluminium. Sensitive fruit enters only within quotas and with minimum import prices: apples from 32,500 tonnes in Year 1 to 45,000 tonnes in Year 6 at a 25% in-quota duty, and kiwifruit from 6,250 to 15,000 tonnes at zero duty. Manuka honey gets 200 tonnes a year with duty falling to 16.5% by Year 5, and milk albumins 1,000 to 3,000 tonnes at 11%. An agricultural productivity partnership sets up Centres of Excellence for apples, kiwifruit and Manuka honey.
Beyond goods, New Zealand committed to facilitate USD 20 billion of investment into India, with a rebalancing clause if delivery falls short. A new Temporary Employment Entry visa allows 5,000 Indians at any time for up to three years; 1,000 young Indians a year get working holiday visas; student numbers are uncapped, with at least 20 hours of work a week and post-study work of up to three years for STEM graduates and four years for doctoral graduates. New Zealand offers access in about 118 services sectors. Merchandise trade was USD 1.3 billion in 2024-25, up 49%, and New Zealand is India's second-largest trading partner in Oceania. Critics in New Zealand, including NZ First leader Winston Peters, called the deal "neither free nor fair", citing limited dairy access. In India, the debate has focused on whether quota imports will hurt apple growers; the agreement's answer is the quota cap and the minimum import price.
Prelims facts
- The India-New Zealand FTA, signed on 27 April 2026, entered into force on 20 October 2026.
- New Zealand removes duties on 100% of tariff lines for Indian exports; India liberalises 70.03% of its lines, covering 95% of bilateral trade value.
- India excludes 29.97% of tariff lines, mainly dairy, sugar, edible oils, onions, arms, gems and jewellery, copper and aluminium.
- Apples (32,500 to 45,000 tonnes at 25%) and kiwifruit (6,250 to 15,000 tonnes at 0%) enter India under tariff-rate quotas with minimum import prices.
- New Zealand will facilitate USD 20 billion of investment, with a rebalancing clause, and offers 5,000 Temporary Employment Entry visas at any time.
Quick recall
- When did the India-New Zealand FTA enter into force?
- 20 October 2026.
- When and where was it signed?
- 27 April 2026, Bharat Mandapam, New Delhi, by Piyush Goyal and Todd McClay.
- Share of India's tariff lines liberalised?
- 70.03%, covering 95% of bilateral trade value.
- Name four items in India's exclusion list.
- Dairy, sugar, edible oils, onions (also arms, gems and jewellery, copper, aluminium).
- Apple quota under the FTA?
- 32,500 tonnes in Year 1 rising to 45,000 tonnes in Year 6, at 25% in-quota duty, with a minimum import price.
- Investment commitment by New Zealand?
- To facilitate USD 20 billion of investment into India, with a rebalancing clause.
- Temporary Employment Entry visa quota?
- 5,000 at any given time, stays of up to three years.
- India-New Zealand merchandise trade in 2024-25?
- USD 1.3 billion, up 49%.
Prelims practice question
With reference to the India-New Zealand Free Trade Agreement, consider the following statements:
1. New Zealand gives duty-free access to all of India's exports from entry into force.
2. India has opened its dairy sector to New Zealand imports at zero duty.
3. Kiwifruit from New Zealand enters India duty-free within a tariff-rate quota.
Which of the statements given above are correct?
- 1 and 2 only
- 1 and 3 only
- 2 and 3 only
- 1, 2 and 3
Show answer
Answer: (b) 1 and 3 only. Statement 1 is correct: New Zealand removes duties on 100% of tariff lines for Indian exports. Statement 2 is wrong: dairy is in India's exclusion list. Statement 3 is correct: kiwifruit gets a quota rising from 6,250 to 15,000 tonnes at 0% in-quota duty, with a minimum import price.
Use this in UPSC Mains: previous-year questions
Recurring theme: India's bilateral trade agreements in an age of protectionism
- How to use this
Use it as a 2026 example of how India uses bilateral FTAs to secure market access while shielding sensitive sectors in a protectionist world.
- The India-New Zealand FTA, in force from 20 October 2026, gives duty-free access to 100% of India's exports.
- India liberalised 70.03% of tariff lines but excluded 29.97%, including dairy, and used tariff-rate quotas with minimum import prices for apples and kiwifruit.
- New Zealand committed to facilitate USD 20 billion of investment with a rebalancing clause, like the India-EFTA TEPA's USD 100 billion objective.
Another of India's long-running bilateral trade negotiations; useful for recalling India's FTA partners.
Mains practice question
The India-New Zealand FTA shows how India now balances market access with protection of sensitive sectors in its trade agreements. Examine. (150 words)
Model answer
The India-New Zealand FTA, signed on 27 April 2026, entered into force on 20 October 2026, after talks concluded in about nine months.
Market access gained
- New Zealand removes duties on 100% of tariff lines for Indian exports, ending peaks of up to 10% on ceramics, carpets and auto parts.
- Duty-free inputs: wooden logs, coking coal, metal scrap.
- Mobility: 5,000 Temporary Employment Entry visas at a time; 1,000 working holiday visas a year; uncapped students.
Sensitive sectors protected
- India liberalises 70.03% of lines and excludes 29.97%, including dairy, sugar, edible oils and onions.
- Apples and kiwifruit enter only under tariff-rate quotas with minimum import prices.
- Phasing over 3 to 10 years for 35.60% of lines.
New elements
- USD 20 billion investment facilitation with a rebalancing clause, similar in spirit to the India-EFTA TEPA's USD 100 billion objective.
- Centres of Excellence for apples, kiwifruit and Manuka honey.
Concerns
- New Zealand critics call it "neither free nor fair" over dairy; Indian fruit growers face quota competition.
The deal shows a template: generous asks, guarded offers, and investment and mobility as sweeteners.
The basics
Why this matters
A free trade agreement (FTA) is a treaty in which two countries cut or remove import duties on each other's goods, and often open services, investment and travel too. The deal with New Zealand is small in trade volume but shows clearly how India now negotiates: open wide abroad, open carefully at home.
- 16 March 2025Negotiations launched
- 22 December 2025Talks concluded after five formal rounds
- 27 April 2026Signed at Bharat Mandapam, New Delhi
- September 2026Both sides complete domestic procedures
- 20 October 2026Agreement enters into force
Who gets what
Trade deals are rarely symmetric. New Zealand, with low tariffs already, removed all of them. India, with high farm tariffs, kept many.
- Duty-free access for 100% of its exports
- 5,000 Temporary Employment Entry visas at any time
- USD 20 billion investment facilitation
- Access in about 118 services sectors
- Liberalisation on 70.03% of India's tariff lines
- Quotas for apples, kiwifruit, Manuka honey and albumins
- Tariff phase-outs over 3 to 10 years
- Centres of Excellence for its key fruit
Inside India's offer
India's offer has four layers, plus a list it kept out entirely. The Exclusion list in trade agreements is where dairy sits.
The quota idea
For apples and kiwifruit India used a Tariff-rate quota: a fixed volume enters at a low duty, and anything beyond pays the normal tariff.
The deal also carries Investment commitments in trade agreements and a new Temporary Employment Entry visa, which matter as much as tariffs for India.
Go deeper
Why it matters for UPSC
India's new generation of trade deals is a GS2 and GS3 theme. This one shows the standard toolkit: full access sought abroad, an exclusion list and quotas at home, and investment and mobility chapters as extras.
The core idea
New Zealand removed all its tariffs on Indian goods. India phased its cuts and kept an Exclusion list in trade agreements for dairy, sugar, edible oils and more. Fruit growers are shielded by a Tariff-rate quota with minimum import prices. India also secured Investment commitments in trade agreements and a new Temporary Employment Entry visa for workers.
Numbers and dates to remember
- 16 March 2025: talks launched; 22 December 2025: concluded; 27 April 2026: signed; 20 October 2026: in force.
- 100% of tariff lines duty-free for Indian exports.
- 70.03% of India's lines liberalised, covering 95% of trade; 29.97% excluded.
- USD 20 billion investment facilitation; 5,000 TEE visas at any time; 1,000 working holiday visas a year.
- USD 1.3 billion merchandise trade in 2024-25, up 49%.
Where to go next
- Tariff-rate quota: how a quota softens import competition.
- Exclusion list in trade agreements: what India keeps out, and why.
- Investment commitments in trade agreements: from EFTA's USD 100 billion to New Zealand's USD 20 billion.
- Temporary Employment Entry visa: the mobility gain for Indian workers.
Go deeper: a template for India's trade deals?
What India gained. Zero duties on all exports, removing peaks of up to 10% on ceramics, carpets, automobiles and auto components. Cheaper inputs such as coking coal, wooden logs and metal scrap. A mobility package that matters to a services exporter: 5,000 Temporary Employment Entry visas at any time, uncapped student numbers and post-study work rights. And an investment commitment with a rebalancing clause, an idea also seen in the EFTA deal.
What India protected. Nearly 30% of tariff lines are excluded, with dairy the most important. Fruit imports are capped by quotas with minimum import prices, so the volume and price of fruit imports are both limited.
The critics. In New Zealand, NZ First leader Winston Peters called the deal "neither free nor fair", citing limited dairy access and the 5,000-visa pathway. In India, the concern is the reverse: whether quota imports of apples will weigh on growers' prices.
How it compares. The India-EFTA TEPA, in force since 1 October 2025, carries an objective of USD 100 billion of investment over 15 years and one million direct jobs. The New Zealand deal is smaller, but its Investment commitments in trade agreements follow the same logic: tariff concessions are traded for capital, not just for market access. Read Tariff-rate quota and Exclusion list in trade agreements to see how India limits its exposure, and Temporary Employment Entry visa for the labour mobility angle.
Tariff-rate quota
How India let in fruit without opening the floodgates.
In one line: A tariff-rate quota (TRQ) lets a fixed quantity of a product enter at a low duty, while imports beyond that quantity pay the normal, higher duty.
How it works
The quota sets the volume; the in-quota duty sets the price advantage. A minimum import price can be added so that quota imports cannot undercut local produce too sharply.
In the India-New Zealand FTA
- Apples: 32,500 tonnes in Year 1 rising to 45,000 tonnes in Year 6, at 25% in-quota duty.
- Kiwifruit: 6,250 tonnes rising to 15,000 tonnes, at 0%.
- Manuka honey: 200 tonnes a year, duty falling to 16.5% by Year 5.
- Milk albumins: 1,000 tonnes rising to 3,000 tonnes, at 11%.
All come with minimum import prices.
Where to go next
Exclusion list in trade agreements
The goods India refused to put on the table.
In one line: An exclusion list names products on which a country gives no tariff concession at all in a trade agreement.
Why countries keep one
Some sectors employ many small producers or are strategically sensitive. Opening them could hurt livelihoods or security, so they are kept out.
India's list in this FTA
India excluded 29.97% of its tariff lines. The PIB release says these are mainly dairy, sugar, edible oils, onions, arms and ammunition, gems and jewellery, copper and aluminium. New Zealand dairy gets only limited benefits, such as a quota for milk albumins.
The trade-off
The exclusion protects Indian farmers but was the main complaint of critics in New Zealand.
Where to go next
Investment commitments in trade agreements
Why India now asks for capital, not just tariff cuts.
In one line: Some recent Indian trade deals include a partner's pledge to facilitate a stated amount of investment into India, alongside tariff concessions.
Two examples
- India-EFTA TEPA: signed on 10 March 2024 and in force from 1 October 2025, with an objective of mobilising USD 100 billion of investment over 15 years and supporting one million direct jobs. EFTA's members are Iceland, Liechtenstein, Norway and Switzerland.
- India-New Zealand FTA: a commitment to facilitate USD 20 billion of investment, with a rebalancing clause to address any shortfall.
Why it matters
Such pledges are targets, not government spending. Their value depends on monitoring and on what happens if they are not met, which is what a rebalancing clause addresses.
Where to go next
Temporary Employment Entry visa
The mobility gain for Indian workers.
In one line: The Temporary Employment Entry (TEE) visa is a new pathway under the FTA that lets up to 5,000 Indian professionals work in New Zealand at any given time, for up to three years.
The wider mobility package
- 1,000 young Indians a year get multiple-entry working holiday visas valid for 12 months.
- No numerical cap on Indian students, with at least 20 hours of work a week during study.
- Post-study work rights of up to three years for STEM bachelor's and master's graduates and four years for doctoral graduates.
Why it matters
India is a services exporter, so movement of people is as valuable as tariff cuts. Critics in New Zealand objected to the visa pathway.
Where to go next
Take the 20 October 2026 quiz: 24 Prelims-style questions with answers