India-New Zealand FTA Finalised, Set to Take Effect in October

New Zealand Prime Minister Christopher Luxon has said the free trade agreement with India has been finalised and will come into force in October, after the deal cleared the country's Parliament earlier this month.

In a post on X, Luxon said the pact would open up more opportunities for exporters, drive business growth and lead to more jobs and higher incomes. He noted that the commitment to secure a trade deal with India within his party's first term had now been fulfilled.

New Zealand's Parliament passed the enabling legislation on September 16 by a vote of 93 to 29, with both the ruling National Party and the main opposition Labour Party backing the bill. Welcoming the approval at the time, Luxon said the agreement would give New Zealand greater access to India's consumer market and support domestic economic growth.

The two countries signed the agreement on April 27. Commerce Secretary Rajesh Agrawal had said earlier this month that the deal could become operational in October.

Under the pact, New Zealand will offer duty-free access to 100 per cent of Indian exports, covering all tariff lines. The agreement is expected to boost competitiveness and employment in India's labour-intensive sectors such as textiles and apparel, leather and footwear, gems and jewellery, engineering goods and processed foods. It also includes a commitment by New Zealand to invest USD 20 billion in India over 15 years.

For New Zealand exports, India has offered market access on 70.03 per cent of tariff lines, covering 95 per cent of bilateral trade. India has kept 29.97 per cent of tariff lines out of the deal, including sensitive items such as dairy, several agricultural products, sugar and certain metals. Duties will be eliminated immediately on 30 per cent of tariff lines covering products such as wood, wool, sheep meat and raw hides, while a further 35.60 per cent will be phased out over three, five, seven or 10 years. Some products, including wine, pharmaceutical drugs, polymers and certain aluminium, iron and steel items, will get tariff reductions, and a small set of goods such as Mānuka honey, apples, kiwifruit and albumins will be covered by tariff-rate quotas.

The agreement also provides for cooperation in agriculture, focusing on productivity and capabilities in kiwifruit, apples and honey, covering areas such as planting material, research, technical assistance, orchard management, post-harvest practices, supply chains and food safety. In services, New Zealand has made commitments across 118 sectors, with Most-Favoured Nation treatment in 139 sectors.

On mobility, the pact creates a Temporary Employment Entry visa pathway with a quota of 5,000 skilled Indians for stays of up to three years, covering occupations including AYUSH practitioners, yoga instructors, Indian chefs and music teachers, as well as professionals in IT, engineering, healthcare, education and construction. A Working Holiday Visa arrangement will allow 1,000 young Indians each year to travel to New Zealand for up to 12 months. Eligible Indian students can work up to 20 hours a week while studying and receive extended post-study work visas depending on their qualification.

The agreement further covers cooperation in investment, research and innovation, technology, skills, renewable energy, digital services and infrastructure, alongside trade in goods and services, agriculture and customs procedures.