TN upbeat as India’s FTA with New Zealand takes effect

NEW DELHI: India’s Free Trade Agreement (FTA) with New Zealand came into effect on Tuesday, providing wider market access for MSMEs, farmers and labour-intensive sectors such as textiles and leather, with zero-duty access for 100% of India’s exports, and reduced tariffs on 95% of New Zealand exports to India.

Sensitive sectors like dairy, sugar and some agriculture products have been fully protected. The development is a major boost to Tamil Nadu, a major hub of textiles, apparel, leather, footwear, gems and jewellery, engineering goods, automobiles and auto components, all sectors that will benefit from the FTA.

The pact becomes India’s 17th operational FTA and the seventh trade pact to come into force in the last five years. The others are agreements with the UAE, Mauritius, the European Free Trade Association bloc, the UK, Oman and Australia.

Signed on April 27, 2026, the agreement follows negotiations launched in 2010, stalled in 2015 and revived in March 2025. New Zealand has committed FDI worth $20 billion in over 15 years.

New Zealand has offered market access in around 118 services sectors and most-favoured nation commitments in about 139 sub-sectors. In new visa rules, Indian youth and professionals will have access to 5,000 temporary employment entry visas and 1,000 working holiday visas annually. There will be no cap on Indian students. Post-study work rights will extend to three years for STEM bachelor’s and master’s graduates and up to four years for doctoral scholars.

In return, New Zealand will receive preferential access to the Indian market for a range of its exports. Tariff reductions will cover products including sheep meat, wool and forestry goods, while certain agricultural imports will be subject to specific quotas and conditions.

New Zealand Prime Minister Christopher Luxon said, “As of today, our historic Free Trade Agreement with India is in effect. Working closely with Prime Minister Narendra Modi, we’ve delivered a deal that will help grow both of our economies”.

He said that from Tuesday, Kiwi businesses can reach over a billion more customers with significantly reduced tariffs.

Commerce minister Piyush Goyal said the FTA will unlock significant opportunities for MSMEs, farmers, women, youth and labour-intensive sectors.

Gulzar Didwania, partner, Deloitte India, said the deal is expected to support higher FDI inflows into India, but the scale of any increase remains uncertain and will depend on private-sector investment decisions.