New Delhi: India and New Zealand on Monday inked a ‘once-in-a-generation’ trade pact, giving duty-free access to 100% of domestic exports, including textiles, leather footwear, and gems and jewellery in the island nation.
The pact is expected to be implemented by the end of this year, as it requires New Zealand Parliament’s approval. In India, the Union cabinet approves a trade pact.
For the second time in a trade deal, India has received FDI (foreign direct investment) commitment of $20 billion in over 15 years. A similar commitment of $100 billion was made by four-European nation bloc EFTA in its pact with India.
The India-New Zealand pact, signed by Commerce and Industry Minister Piyush Goyal and visiting New Zealand’s Trade and Investment Minister Todd McClay here, is expected to help double bilateral trade in goods and services to $5 billion in five years.
Commenting on the pact, Prime Minister Narendra Modi said it will greatly benefit farmers, youth, women, MSMEs, artisans, startups, students and innovators.
“The investment commitment of $20 billion by New Zealand will further strengthen our cooperation in agriculture, manufacturing, innovation and technology, paving the way for a more prosperous and dynamic future for both countries,” Modi said in a social media post.
Describing it as a “once-in-a-generation agreement”, New Zealand’s Prime Minister Christopher Luxon said it would provide exporters with unprecedented access to 1.4 billion people and to an economy set to become the world’s third-largest.
Commerce and Industry Minister Piyush Goyal said that this is India’s ninth agreement in the past few years, with 38 developed countries.
“At the heart of the agreement is the empowerment for exports, agricultural productivity, student mobility, skills, investment and services,” Goyal said.
McClay, who is leading a 40-member delegation, said it is a high-quality FTA. “FTA reduces friction, provides certainty, sets clear rules and makes it easier for businesses to build relationships,” he added.
Back home, the Luxon government’s coalition partner, the New Zealand First, has publicly opposed the deal. Christopher Luxon (New Zealand’s Prime Minister) has, however, secured the backing of the main opposition Labour Party for the agreement.
“Well, we have a majority in our Parliament to pass this agreement. All the trade agreements that have been presented to our Parliament have enjoyed a super majority of the two largest parties in Parliament,” McClay said, when asked whether the pact could face hurdles in securing parliamentary approval.
The trade agreement, negotiations for which were concluded in December 2025, provides duty-free access for 100 per cent of India’s exports to New Zealand, covering all tariff lines or product categories such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods, and processed foods.
Earlier, New Zealand maintained peak tariffs of up to 10% on key Indian exports, including ceramics, carpets, automobiles, and auto components.
On the other hand, India has offered tariff liberalisation on 70% of tariff lines of New Zealand covering 95% of bilateral trade value, while keeping 29.97% of product categories outside the purview of the pact.
The products that are kept in exclusion include dairy (milk, cream, whey, yoghurt, cheese), animal products (other than sheep meat), agri goods (onions, chana, peas, corn, almonds), sugar, artificial honey, animal, vegetable or microbial fats and oils, arms and ammunition, gems and jewellery, copper and articles (cathodes, cartridges, rods, bars, coils), aluminium and articles (ingots, billets, wire bars).
India will provide duty-free access of number of goods from New Zealand and that includes wooden logs, coking coal, waste and scraps of metals, wood, sheep meat, and leather-raw hides.
Similarly, on goods such as petroleum oil, malt extract, vegetable oils, selected electrical and mechanical machinery, and peptones, India will reduce levies in a phased manner over 3, 5, 7, and 10 years.
New Zealand products which enjoy tariff reductions include wine, pharmaceutical drugs, polymers, aluminium, iron and steel articles.
On certain products such as Manuka honey, apples, kiwi fruit, and albumins, including milk albumin, New Delhi has offered quota-based duty concessions with minimum import price and other safeguards, ensuring quality imports and consumer choice while protecting domestic farmers.
