India-NZ FTA kicks in: What gets cheaper for you
What's the story
The Free Trade Agreement (FTA) between India and New Zealand has come into effect from today. The two countries have set an ambitious target of doubling their bilateral trade in goods and services to NZ$7 billion (about ₹35,000 crore) by 2030. This will require a compounded annual growth rate (CAGR) of around 18%.
Economic impact
Indian exporters to get duty-free access to NZ market
The FTA will give Indian exporters 100% duty-free access to the New Zealand market. This is expected to create opportunities for MSMEs, women entrepreneurs, farmers, and artisans.
It is also likely to attract $20 billion in investments into India over 15 years, paving the way for growth in sectors like manufacturing, infrastructure, agriculture, and innovation.
Sectoral advantages
Tariffs on labor-intensive sectors to be eliminated
The FTA will eliminate tariffs of up to 10% on labor-intensive sectors such as textiles, apparel, leather, and footwear.
Other industries like engineering goods, pharmaceuticals, machinery, and chemicals are also expected to get improved market access through this agreement.
However, India has kept certain products like dairy items, onions and sugar out of the deal.
Export opportunities
FTA will create new opportunities for exporters: Todd McClay
New Zealand Trade and Investment Minister Todd McClay said the FTA will open doors for exporters in key sectors.
He added that once fully implemented, 95% of New Zealand's current exports to India will benefit from tariff elimination or significant tariff reductions.
This would create new opportunities across many of their key export sectors.
Additional benefits
Work visas for students going to NZ for education
Under the FTA, young Indians going to New Zealand for education will get a guaranteed work visa. This will allow them to train and work in the country for a certain period.
Indian farmers will also get wider market access for fruits, vegetables, spices, and other agricultural produce under this agreement.
Operational efficiency
Customs clearance within 48 hours for cargo
The FTA also promises customs clearance within 48 hours for cargo and 24 hours for express and perishable consignments.
Digital certification and self-certification of rules of origin for eligible status holders are also part of the deal, aimed at cutting procedural delays and compliance costs.
For Indians
What's getting cheaper for Indian consumers
For Indian consumers, the FTA could make several New Zealand products cheaper.
Sheep meat gets zero basic customs duty from today, while kiwi fruit gets a preferential 15% duty within the agreed quota.
Tariffs on apples and Manuka honey will also be reduced over time, while wool and wood products get immediate tariff cuts. Wine tariffs will fall by 66-83% over 10 years.
Lower import duties, however, may not translate into an equal drop in retail prices right away.