NZ–India FTA signed, unlocking major export growth opportunities

New Zealand has signed what is being described as a “once-in-a-generation” free trade agreement (FTA) with India, a move expected to unlock significant export growth, create jobs, and strengthen long-term economic ties between the two countries.

The agreement was signed in New Delhi by Trade and Investment Minister Todd McClay and India’s Commerce and Industry Minister Piyush Goyal, in front of a large audience of business leaders from both nations.

Prime Minister Christopher Luxon says the deal gives New Zealand businesses unprecedented access to a rapidly expanding market.

“The benefits of this FTA are widespread, and our business community is excited to see the doors of opportunity open to 1.4 billion people whose economy is set to become the third largest in the world,” Mr Luxon says.

“One in four jobs are tied to trade. In signing this FTA we are setting businesses up to succeed, boosting Kiwi jobs and enabling economic growth – and that means more money in Kiwis’ pockets.”

Export growth and market access

The agreement supports the Government’s goal of doubling export value over the next decade, with significant gains expected across multiple sectors.

“This deal will deliver thousands of jobs and billions of dollars in additional exports,” Mr McClay says.

“Creating opportunities for our businesses to diversify and create strong trading relationships provides economic security for New Zealanders – and that is crucial in these times of global unrest.”

A key feature of the agreement is a Most Favoured Nation clause covering wine and services exports. This ensures that if New Zealand’s agreement comes into force before similar European Union arrangements, exporters will receive equivalent access.

“That clause will be worth tens of millions of dollars in extra exports for the New Zealand economy,” Mr Luxon says.

“Two-way trade is currently NZ$3.95 billion. The deal we have struck and the relationship we have built will grow this exponentially and deliver deep and lasting benefits for generations to come.”

Tariff reductions and competitive positioning

The FTA eliminates or reduces tariffs on 95 percent of New Zealand exports to India—one of the most comprehensive outcomes secured in any Indian trade agreement.

Around 57 percent of exports will be duty-free from day one, rising to 82 percent once the agreement is fully implemented, with the remaining tariffs significantly reduced.

This places New Zealand exporters on equal or better footing than international competitors and improves access to India’s growing middle class.

Negotiations began on 21 March and concluded after nine months.

“This once-in-a-generation Agreement creates opportunities New Zealand exporters have never had in India. This deal is in New Zealand’s best interest and will deliver thousands of jobs and billions in additional exports,” Mr McClay says.

“The Indian economy is forecast to grow to NZ$12 trillion by 2030. The India-NZ Free Trade Agreement unleashes huge potential for our world-class exporters to the world’s largest country and will significantly accelerate progress towards New Zealand’s ambitious goal of doubling the value of exports over 10 years.”

Business community backs agreement and bipartisan support

The New Zealand International Business Forum has welcomed both the agreement and cross-party political backing, including support from the New Zealand Labour Party.

Executive Director Felicity Roxburgh says bipartisan support provides critical certainty for exporters.

“Our ability to compete and sell into global markets underpins jobs, drives incomes, and funds the public services New Zealanders depend on. Bipartisan support for this deal gives businesses the confidence to take a long-term view.”

She says the agreement represents a major step forward in accessing India’s vast consumer base.

“This is about more than market access, it is about the farmers, growers, manufacturers and innovators behind our export sectors, and the communities across New Zealand that depend on them.”

“India represents a major opportunity. This agreement begins to break down barriers and opens the door to deeper commercial relationships across a wide range of sectors.”

“In a world shaped by rising protectionism and geopolitical tension, standing still is not an option. Securing improved access to markets like India strengthens New Zealand’s resilience, spreads risk, and ensures our exporters remain competitive.”

While noting some disappointment around dairy outcomes, NZIBF says the agreement delivers meaningful gains across sectors including kiwifruit, apples, sheep meat, seafood and wine, and looks forward to engaging in the select committee process.

“We are focused on working constructively with government to ensure New Zealand businesses are well positioned to take full advantage of the opportunities this agreement creates, and that these are translated into real commercial outcomes for exporters.”

Sector response: wine and forestry see long-term opportunity

The New Zealand Winegrowers has also welcomed political support for the agreement, highlighting the importance of consistency in trade policy.

Chief Executive Philip Gregan says bipartisan alignment reinforces New Zealand’s credibility as a trading partner.

“India represents a significant long-term opportunity for New Zealand wine, and sustained cross-party commitment will be key to delivering a high-quality agreement with real commercial outcomes.”

The FTA provides a clear, decade-long tariff reduction pathway for wine exporters. While exports to India are currently modest—just under NZ$300,000 in 2025 due to high tariffs—improved access is expected to lift the market’s attractiveness.

“We value the constructive approach taken across Parliament and the shared recognition of trade as a driver of growth, jobs, and regional prosperity,” Gregan says.

Meanwhile, the New Zealand Forest Owners Association says the agreement marks a significant milestone for forestry and regional economies.

Chief Executive Elizabeth Heeg, who attended the signing in India, says the sector is well positioned to benefit.

“Forest growers welcome the signing of this agreement. India is a large, fast-growing economy and an increasingly important partner for New Zealand.”

“Wood and wood products are already New Zealand’s largest goods export to India, worth NZ$134 million in the year to June 2025, giving our sector a strong base to build from.”

Improved access is expected to support investment, trade growth, and employment across the forestry supply chain, particularly in regional New Zealand.

“Improved access to the Indian market gives forest growers, wood processors and exporters greater confidence to invest, grow trade and support jobs across the forestry supply chain.”

Heeg also highlighted opportunities for broader collaboration.

“This agreement is also an opportunity to deepen collaboration on research, education and forestry practice, which can deliver benefits for both countries.”

Echoing the Government’s position, she emphasised the role of business in realising the agreement’s potential, referencing Mr McClay’s remarks:

“Governments can provide frameworks, but it is businesses that define the character of an economic relationship. The tone set – on trust, transparency and ambition – will shape how this agreement is experienced on the ground.”

Heeg says the agreement will strengthen the entire forestry value chain, from forests to processing and export.

“That matters for regional New Zealand, where forestry is a major employer and contributor to local economies.”

“Trade agreements of this scale do not come along often. The signing of the India FTA is a welcome milestone and gives New Zealand exporters a stronger footing in one of the world’s most important growth markets.”

She also encouraged continued political support as the agreement progresses.

“We welcome the work that has gone into reaching this point and encourage Parliament to support the agreement through the next stages, so New Zealand businesses and communities can make the most of this opportunity.”

Key outcomes for New Zealand include:

Tariff elimination or reduction on 95% of our exports,

Duty-free access on almost 57% of New Zealand’s exports from day one, increasing to 82% when fully implemented, with the remaining 13% being subject to sharp tariff cuts,

Immediate tariff elimination on sheep meat, wool, coal and over 95% of forestry and wood exports,

Duty-free access on most seafood exports, including mussels and salmon, over seven years,

Duty-free access on most iron, steel and scrap aluminium, over 10 years or less,

Duty-free access for most industrial products, over five to 10 years,

50% tariff cut for large quota of apples – nearly double recent average exports,

Duty-free access for kiwifruit within a quota almost four times our recent average exports, and tariff halved for exports outside of quota,

Duty-free access for cherries, avocados, persimmons and blueberries, over 10 years.

Tariffs on wine reduced from 150 per cent to either 25 or 50 per cent (depending on the value of the wine) over 10 years plus a Most Favoured Nation (MFN) commitment.