New Zealand’s Parliament has approved legislation needed to implement the country’s free trade agreement (FTA) with India, moving the pact closer to an expected start in the second half of October.
The India Free Trade Agreement Legislation Amendment Bill passed its third reading on Tuesday, 15 September, by 93 votes to 29, with the opposition Labour Party joining the governing coalition in supporting it.
Trade and investment minister Todd McClay welcomed the result on Wednesday, saying the vote demonstrated strong parliamentary support for the agreement.
India and New Zealand signed the FTA in New Delhi on 27 April after completing negotiations in December. The agreement will take effect once both countries have completed their domestic procedures and formally notified each other.
Indian commerce secretary Rajesh Agrawal said on Tuesday that the pact was expected to become operational in the second half of October and that the precise date would be announced after both sides completed the necessary procedures.
The agreement gives Indian exports duty-free access to New Zealand across all tariff lines from the day it enters into force. New Zealand currently imposes tariffs of as much as 10% on some Indian products, including ceramics, carpets, automobiles and auto components.
Indian exporters of textiles, apparel, leather, footwear, engineering goods, processed foods and other labor-intensive products are among those expected to benefit.
India, meanwhile, has agreed to liberalize about 70% of its tariff lines, covering roughly 95% of bilateral trade with New Zealand. About 30% of tariff lines will become duty-free immediately, while others will be liberalized over periods of three, five, seven or 10 years.
New Zealand calculates the outcome in terms of its existing exports, saying 57% will become duty-free immediately and 82% will enter India tariff-free once the reductions are fully phased in. Another 13% of exports will receive substantial tariff cuts.
Sheep meat, wool, coal and most forestry products will receive immediate tariff elimination. Tariffs on key fish and seafood products will be phased out over seven years, while most industrial products will receive tariff elimination over longer periods.
India has kept almost 30% of its tariff lines outside the agreement, protecting sensitive sectors including most dairy products, sugar and several agricultural commodities.
New Zealand nevertheless secured preferential treatment for selected products. Kiwifruit will receive duty-free access within a tariff quota, with the tariff outside the quota cut by half. Apples will receive lower duties within a quota, while tariffs on mānuka honey will be reduced by 75% over five years.
The agreement also grants concessions on a limited number of dairy-based products and ingredients, including tariff reductions or quota access for products such as albumins, while India’s broader dairy market remains protected.
Indian tariffs on New Zealand wine, currently as high as 150%, will fall over 10 years for higher-value products. Wine valued between $5 and $15 per 750 ml will eventually face a 50% tariff, while wine priced at $15 or more will face a 25% rate. The 150% tariff will remain for wine priced below $5.
The pact also includes a commitment by New Zealand to promote private-sector investment into India with the aim of increasing it by $20 billion over 15 years. The provision is an investment-promotion commitment rather than a government pledge to invest that amount directly.
Services, professional mobility, education, customs procedures and investment cooperation are also covered by the agreement.
India said bilateral merchandise trade rose 49% to about $1.3 billion in the 2024-25 financial year, with Indian merchandise exports to New Zealand reaching about $711 million.
New Zealand recorded total two-way goods and services trade of NZ$3.95 billion in the year ended December 2025.
The countries subsequently set an aspirational target under their Strategic Partnership Roadmap to double two-way goods and services trade to NZ$7 billion, or about ₹35,000 crore, by 2030.
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