India-New Zealand FTA Cleared, Wool To Get Tariff-Free Access
India and New Zealand have completed the ratification of their Free Trade Agreement (FTA), which is scheduled to come into force on October 20, 2026, opening duty-free access in New Zealand for all Indian exports.
The agreement is expected to improve the competitiveness of India’s labour-intensive sectors, including textiles and apparel, leather and footwear, gems and jewellery, engineering goods and processed food, while strengthening bilateral trade and investment ties.
Under the pact, 100% of Indian exports by tariff lines will receive duty-free access to the New Zealand market from the date of implementation. India and New Zealand have also set a target of doubling bilateral trade in goods and services to Rs 35,000 crore ($3.68 billion) by 2030.
The FTA was signed on April 27, 2026, and subsequently approved by the New Zealand Parliament on September 16. The legislation was passed with 93 votes in favour and 29 against.
For India’s textile sector, the agreement provides immediate tariff elimination on several key products. New Zealand will eliminate duties on products covering 30% of tariff lines, including wool, wood, sheep meat and raw hides, from the agreement’s entry into force.
The agreement is also expected to create greater opportunities for Indian apparel and other labour-intensive exporters by removing tariff barriers and improving market access in New Zealand.
In return, India has offered market access to New Zealand across 70.03% of its tariff lines, covering around 95% of bilateral trade. India has excluded 29.97% of tariff lines from its commitments, particularly products considered sensitive, including dairy, several agricultural commodities, sugar and certain metals.
A further 35.60% of tariff lines will see duties phased out over a period of three to 10 years.
The agreement also contains a significant investment commitment from New Zealand, which has committed to facilitating Rs 1.89 lakh crore (US$ 20 billion) of investment in India over 15 years. The investment component is expected to support longer-term economic cooperation between the two countries.
Beyond merchandise trade, the FTA includes services commitments across 118 sectors and provisions aimed at improving mobility for Indian students and professionals.
New Zealand will provide an annual quota of 5,000 skilled Indian workers through a Temporary Employment Entry visa pathway, along with 1,000 Working Holiday Visas each year.
The two countries will also expand cooperation in areas including agriculture, investment, research and innovation, technology, renewable energy, digital services and infrastructure.
For India’s textile and apparel industry, the agreement comes as exporters seek to diversify their market base and expand access to markets beyond traditional destinations. The removal of tariffs in New Zealand could improve the price competitiveness of Indian products, particularly in categories where exporters face competition from other low-cost manufacturing economies.
The pact therefore provides Indian exporters with another preferential market at a time when the industry is seeking to strengthen its global presence through a wider network of trade agreements.
