New Zealand has finalised talks on a free trade deal with India, setting the stage for tariff cuts on nearly all its exports.
Trade Minister Todd McClay said that both countries anticipate signing the deal in the first half of next year. Talks, which kicked off in March, concluded after nine months.
For Prime Minister Christopher Luxon, the agreement was a vital step toward strengthening New Zealand’s relationship with India.
The agreement will eliminate or reduce tariffs on 95% of New Zealand’s exports to India. About 57% will become duty-free upon implementation, increasing to 82% once fully phased in, with the rest receiving substantial cuts.
“This deal is in New Zealand’s best interest and will deliver thousands of jobs and billions of dollars in additional exports,” McClay said.
Key benefits for New Zealand from the deal include:
- Tariff elimination or reduction on 95% of New Zealand’s exports.
- Duty-free access for nearly 57% of New Zealand’s exports from day one, rising to 82% upon full implementation, with the remaining 13% facing sharp tariff cuts.
- Immediate removal of tariffs on sheep meat, wool, coal, and more than 95% of forestry and wood products.
- Duty-free access for most seafood exports, such as mussels and salmon, phased in over seven years.
- Duty-free access for most iron, steel, and scrap aluminium exports, phased in over 10 years or less.
- Duty-free access for most industrial products, phased in over five to 10 years.
- A 50% tariff reduction on a large quota of apples.
- Wine tariffs slashed from 150% to 25% or 50% (based on wine value) over 10 years, plus Most Favoured Nations (MFN) commitment.
- Duty-free access for kiwifruit within a quota nearly four times recent average exports, with tariffs halved on volumes exceeding the quota.
- Tariffs on mānuka honey reduced from 66% to 16.5% over five years.
- Duty-free access for cherries, avocados, persimmons, and blueberries, phased in over 10 years.
- Duty-free access for dairy and other food ingredients intended for re-export, effective from day one.
- A 50% tariff reduction on high-value milk albumins within a New Zealand-specific quota matching current export volumes.
- Duty-free access for bulk infant formula and other high-value dairy preparations, phased in over seven years.
The agreement also features extensive services commitments that build on India’s World Trade Organization obligations, with a strong emphasis on financial services, digital payments, and fintech.
To safeguard iconic Kiwi product names in each other’s markets, the two countries agreed to establish Geographical Indication rules.
The agreement includes a Most Favoured Nation (MFN) clause to ensure New Zealand gains from any future trade liberalisations India grants to other partners.
In exchange, New Zealand will grant India up to 1,667 three-year skilled work visas annually on average, aimed at ‘priority roles’ addressing skill shortages in healthcare, education, ICT, and engineering.