Narendra Modi’s first visit to New Zealand as India’s Prime Minister has landed at an awkward moment for the national self-image. The government has just signed a free trade agreement it calls a strategic milestone. Yet the Asia New Zealand Foundation has found that while 61% of New Zealanders see India as important to the country’s future, only 29% say they know much about it. Roughly seven in ten Kiwis have limited knowledge of the market we just tied our export future to.
That is not a cultural footnote. It is a commercial risk sitting directly on top of the tariff savings the deal is meant to unlock.
The money on the table
The India-New Zealand FTA was concluded on 27 April 2026. On paper it is substantial: nearly 95% of NZ’s current exports will enter India duty-free or at reduced tariff rates, with more than half duty-free immediately and over 80% once transition phases complete. The projected saving is NZ$43 million a year at entry into force, rising to NZ$62 million after full implementation. Forestry, sheep meat, horticulture, Manuka honey and a spread of services from fintech to education are the named winners. Indian customs has even committed to clearing goods within 48 hours generally, and 24 hours for express consignments.
But the starting base is thin. NZ shipped NZ$2.03 billion in goods and services to India in the year to December 2025, making it only our 11th largest export market. The whole point of the deal is to grow that number. Tariff relief does not do that on its own. Businesses that understand the market do.
Warm but shallow
Newsroom’s Suzannah Jessep puts the problem plainly. New Zealand’s relationship with India, she writes, “has historically been warm but relatively shallow”, shaped by distance and a lack of the institutional engagement that a trade deal usually brings. “We have recognised India’s potential for years without building the knowledge and connections needed to engage with it skilfully,” she notes.
The default mental model, cricket and the Taj Mahal, is not a strategy. India is “a vast, diverse and rapidly changing country made up of 28 states and eight union territories”, each with its own languages, politics and economics. Understanding it takes work most exporters have not yet done.
The 1.4 billion-customer myth
Here is the insight most likely to trip up a NZ firm reading the press releases. There is no single Indian market. Analysis published by The Conversation argues bluntly that “the happy headline of 1.4 billion potential customers is largely a fiction” and that no genuine pan-India business strategy will work.
Key decisions on infrastructure, land, labour and transport are made at state level, and the states with the biggest economies are not the states that are easiest to do business in. NZ sits near the top of the World Bank’s ease-of-doing-business rankings; India sits far lower, which translates into real operational friction for firms used to New Zealand’s regulatory simplicity. The practical conclusion is that exporters “will need to customise their strategies for each state, region and market through careful, data-based analysis”. Treating India as one buyer is how you burn capital.
The asset sitting in plain sight
NZ already has a shortcut it has barely used. The country’s Indian diaspora numbers around 300,000, roughly 6% of the population, and functions as a living bridge through commerce, education and family ties. For an exporter trying to work out which state to enter, what a distributor will actually do, or how a regulator behaves in practice, that network is market intelligence most competitors do not have. Very few firms treat it that way.
Why the effort is worth it
The strategic case is straightforward. As Jessep argues, “in an uncertain world, New Zealand needs more friends and more options. India is fast becoming one of the most important.” India keeps diplomatic channels open across rival blocs, a strategic autonomy that can give a small country access to rooms it would otherwise be shut out of. On the commercial side, just as China’s manufacturing scale accelerated global adoption of renewables and EVs, India has the potential to do something similar in other sectors, including through its low-cost digital payments infrastructure.
The FTA, in other words, is “one pillar of a broad, deep and enduring strategic relationship”, not the whole building. The deal has removed the tariff excuse. What it cannot remove is the knowledge gap. The firms that win in India over the next decade will be the ones that invest now in state-level intelligence, local partners and diaspora networks. The ones that turn up expecting 1.4 billion identical customers will find the tariff savings were the easy part.