PM Modi with New Zealand Prime Minister Christopher Luxon

New Zealand’s Parliament has formally approved the India–New Zealand Free Trade Agreement (FTA) with a decisive 93–29 vote, paving the way for the pact to take effect in October 2026.

The deal will eliminate tariffs on 95% of New Zealand’s exports to India and grant duty-free access for all Indian exports to New Zealand, opening a market of 1.4 billion consumers.

New Zealand Prime Minister Christopher Luxon hailed the parliamentary clearance as a landmark achievement. He emphasised that the agreement would generate more jobs, raise incomes, and expand opportunities for New Zealand exporters by unlocking India’s vast consumer base. Luxon described the ratification as proof that his National Party had delivered on its promise to secure the FTA within its first term.

The legislation was supported by both the ruling National Party and the opposition Labour Party, ensuring a clear majority. The FTA was originally signed on 27 April 2026, and Commerce Secretary Rajesh Agrawal has indicated that India is working to operationalise the agreement by October, with 19 October cited as the likely date.

Under the terms of the agreement, New Zealand will provide duty-free access for 100% of Indian exports, covering all tariff lines. This is expected to boost India’s labour-intensive sectors such as textiles, apparel, leather, footwear, gems and jewellery, engineering goods, and processed foods.

The pact also includes a commitment of $20 billion (₹1,66,000 crore) investment by New Zealand in India over 15 years, aimed at strengthening long-term cooperation.

For New Zealand exporters, 57% of exports to India will become duty-free immediately, while tariffs on 95% of exports will be eliminated or reduced once the agreement is fully implemented. Sensitive Indian sectors such as dairy, sugar, and certain agricultural and metal products have been excluded from tariff concessions.

Products like wood, wool, sheep meat, and raw hides will see immediate tariff elimination, while others such as wine, pharmaceuticals, polymers, and aluminium will benefit from phased reductions. Tariff-rate quotas will apply to items like Mānuka honey, apples, kiwifruit, and albumins.

The agreement also covers agricultural cooperation, focusing on productivity improvements in kiwifruit, apples, and honey. Joint work will include planting material, orchard management, post-harvest practices, supply chains, and food safety. In services, New Zealand has committed across 118 sectors, with Most-Favoured Nation treatment in 139 sectors.

Mobility provisions are a key highlight. A Temporary Employment Entry visa pathway will allow 5,000 skilled Indians to work in New Zealand for up to three years in fields such as IT, engineering, healthcare, education, construction, AYUSH, yoga, culinary arts, and music.

Additionally, a Working Holiday Visa scheme will enable 1,000 young Indians annually to stay in New Zealand for up to 12 months. Student mobility is also addressed, with Indian students permitted to work up to 20 hours weekly during studies and eligible for extended post-study work visas.

The FTA further provides for cooperation in investment, research, innovation, renewable energy, digital services, and infrastructure, reflecting its broad scope beyond trade in goods.

Trade Minister Todd McClay highlighted that the kiwifruit industry alone expects to save around ₹1,040 crore in tariffs over five years, underscoring the tangible benefits for New Zealand exporters.

The parliamentary approval marks a decisive step towards implementation, with both sides committed to doubling two-way trade by 2030. Current bilateral trade stands at approximately NZ$3.99 billion (₹19,000 crore), with India ranked as New Zealand’s ninth-largest export market.

ANI