CHENNAI: From Tirupur’s knitwear and Ambur’s leather to Chennai’s auto components, several products and sectors that are key for Tamil Nadu are now free of the tariff burden after the India-New Zealand free trade agreement (FTA) kicked in on October 20. But experts say the real test lies in helping MSMEs meet stringent sourcing and certification standards, and convert duty-free access into firm orders. “Instead of looking only at lower tariffs, businesses need to reimagine the opportunities,” Mallika Janakiraman, independent director and Indiaspora ambassador, told DT Next.
The Auckland-based trade and investment strategist said Tamil Nadu’s diverse industrial base and entrepreneurial clusters could help it tap markets beyond traditional export destinations. Erode’s curcumin, for instance, could be positioned as a premium product rather than a commodity, while seafood exporters could benefit from zero tariffs and explore opportunities to upgrade processing standards.
“Education and tourism are win-win opportunities for both Tamil Nadu and New Zealand,” she said, adding that spices, moringa, honey and regional fruits (like nagapazham, guava, wood apple) could also find markets among New Zealand’s Indian diaspora of around three lakh people.
Janakiraman said interest in collaboration had nearly doubled following the FTA announcement.
A New Zealand delegation is expected to visit Chennai in November to explore a roadmap for partnerships, including startup collaborations, innovation and special economic zones. Opportunities could also emerge in nutraceuticals, nursing education and research-led product development.
Rahul Sen, strategic adviser to the India New Zealand Chamber of Commerce and Industry, added that the agreement gives Tamil Nadu’s textile, leather and auto component exporters duty-free access to a market where tariffs previously reached 10%. However, MSMEs must comply with rules-of-origin requirements to qualify for the benefits.
Economist Badri Narayanan Gopalakrishnan called the FTA a “straight gain” for the State’s MSMEs. New Zealand has offered 100% duty-free access to Indian goods across 8,284 tariff lines from day one, eliminating peak duties of 5-10% on several products aligned with TN’s manufacturing strengths.
The State accounts for about 40% of India’s knitwear, 45% of footwear and 35% of auto component sectors, he pointed out, noting how the tariff removal could help narrow the price disadvantage faced by Indian exporters against competitors from Vietnam and Bangladesh.
Bilateral trade, currently around $1.3 billion, is projected to reach $5billion by 2030-31, alongside a proposed $20 billion New Zealand investment pipeline. However, Gopalakrishnan cautioned that New Zealand’s population of about 5.1 million limits the market’s size. Certification, sustainable sourcing and compliance with environmental standards remain critical hurdles, particularly for smaller manufacturers.
A Sakthivel, chairman, the Apparel Export Promotion Council, said New Zealand’s ready-made garment import market stood at about $1.18 billion in 2025-26, with India supplying $48.7 million, only 4.1% of the market. Knitted and crocheted garments accounted for 52.4% of apparel imports, while cotton represented 41.4%.
“This demand profile aligns closely with TN’s strengths, particularly the Tirupur knitwear cluster,” he said, identifying cotton T-shirts, knitted jerseys and pullovers as products with potential to expand their market share. The FTA could improve price competitiveness and help exporters increase volumes.
RR Padmanabhan, principal consultant-director at EXIM Consultants, said textiles, leather, footwear, engineering goods and auto components stood to benefit, while IT, professional services, food processing and education offered scope for wider cooperation.
However, freight costs, certification, technical standards and buyer identification could constrain gains for MSMEs. The State government, export promotion councils and industry associations should identify products with genuine tariff advantages and facilitate direct engagement with New Zealand buyers, Padmanabhan added.
Raman Raghu, regional chairman (South), Engineering Export Promotion Council of India, told DT Next that relatively few TN engineering exporters currently serve New Zealand. The FTA could encourage more MSMEs to enter the market, supported by the State’s ports and shorter sailing times.