[Global IDT Insights] India and New Zealand signed the Free Trade Agreement (FTA)

Editorial Team – [2026] 186 taxmann.com 91 (Article)

Global IDT Insights provides a weekly snippet of tax news specifically related to Indirect Taxes from around the globe.

India and New Zealand signed the FTA on 27-04-2026. The FTA provides tariff-free access or reduced tariffs for a large share of trade through immediate duty elimination, phased tariff reduction and tariff-rate quota (TRQ) access. Certain tariff lines remain excluded, while safeguard measures are also provided.

More than half of New Zealand’s exports to India become tariff-free on day one, and over 80% become tariff-free once phase-in schedules are completed. India has offered tariff liberalisation on 70.03% of tariff lines covering 95% of bilateral trade value, while 29.97% of tariff lines remain excluded.

This article focuses exclusively on tariff-related measures under the agreement.

1. Measures Related to New Zealand Exports to India

(a) Dairy and Related Products – The existing 33% tariff on bulk infant formula and other dairy-based food preparations will be phased out over seven years. The current 22% tariff on peptones will also be phased out over the same seven-year period. The agreement also contains a consultation commitment for dairy, where tariff concessions are offered to a comparable economy in future.

(b) Albumins – Imports of albumins, including milk albumin, within the annual quota will attract 11% duty instead of the present 22% tariff. The quota begins at 1,000 MT in Year 1 and increases gradually to 3,000 MT by Year 5. Imports beyond the quota volume will continue to attract the prevailing applicable customs duty.

(c) Apples – Apples currently subject to 50% tariff receive concessional quota access under the agreement. Imports within quota will attract 25% duty, with quota volume starting at 32,500 MT in Year 1 and increasing to 45,000 MT by Year 6. This treatment applies from 1 April to 31 August and remains subject to a minimum import price of US$1.25/kg, while imports outside quota continue at the prevailing duty.

(d) Kiwifruit – Imports within the quota will attract 0% duty, allowing duty-free access for specified annual quantities. The quota starts at 6,250 MT in Year 1 and rises to 15,000 MT by Year 6, subject to a minimum import price of US$1.80/kg from 1 April to 15 October. Imports outside the quota will attract 50% duty with a minimum import price of US$2.50/kg.

(e) Honey – The current 66% tariff will be reduced in stages over five years to 16.5%. For honey priced at or above US$30/kg, the same reduced rate applies under the schedule, while a quota of 200 MT per year is available for honey priced between US$20/kg and US$30/kg. The staged duty rates are 56.1% in Year 1, 46.2% in Year 2, 36.3% in Year 3, 26.4% in Year 4 and 16.5% from Year 5 onward.

(f) Meat, Wool and Primary Goods – The 33% tariff on sheep meat will be eliminated immediately when the agreement enters into force. Tariffs on wool and coal will also be removed on day one. These products, therefore, move directly to zero-duty treatment.

(g) Forestry, Seafood and Industrial Goods – Over 95% of forestry and timber exports become tariff-free immediately, while most remaining tariffs in that category will be eliminated over seven years. Existing 33% tariffs on key fish and seafood products will also be phased out over seven years. Most industrial products become tariff-free within ten years, while certain products like petroleum oil, malt extract, vegetable oils, and selected electrical and mechanical machinery, etc. follow 3-year, 5-year, and 7-year or 10-year schedules.

(h) Wine – Existing tariffs reaching up to 150% will be reduced over ten years under the agreed schedule. Final duty levels will be 25% or 50%. This is a phased reduction rather than immediate elimination.

(i) Other Goods – Immediate duty elimination also applies to products such as wood and raw hides. Tariff reductions are provided on pharmaceutical drugs, polymers, aluminium, and iron and steel articles. Other products, including petroleum oil, malt extract, vegetable oils and selected machinery, are subject to phased schedules.

(j) Customs Facilitation – India Customs will release goods within 48 hours, and in the case of perishable goods and express consignments, endeavour to do so within 24 hours. The agreement recognises Advance Rulings, Single Window procedures and electronic submission of customs import documentation. The agreement also provides for Authorised Economic Operators, automation, and paperless single-window clearance systems.

1.1 Measures Related to Indian Exports to New Zealand

(a) 100% Duty-free Access – The agreement grants 100% duty-free access on all tariff lines from entry into force. Covered Indian exports therefore receive zero-duty treatment immediately. This applies across the tariff schedule.

(b) Exclusions and Safeguards – India retains exclusions on specified dairy products, selected agricultural goods, sugar, fats and oils, certain metals and other listed products. These excluded tariff lines do not receive concessions under the agreement. Existing duty treatment, therefore, continues for such goods.

1.2 Bilateral Safeguard Mechanism

A bilateral safeguard mechanism applies where an import surge causes or threatens serious injury to the domestic industry. Measures include suspension of further duty reduction or an increase in duty rates within agreed limits. This allows temporary protection where increased imports affect the domestic industry.

Source:

PIB Press Release – India

Official Source – New Zealand

Official Source Confirming that FTA has been Signed

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