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For decades, India has been a market New Zealand could see but not quite reach. The potential was clear – 1.4 billion people, a growing middle class, rising demand for quality food, services, and expertise. But high import taxes made it too expensive for many New Zealand exporters to compete, even when Indian consumers wanted exactly what we produce. The Free Trade Agreement signed recently changes that in concrete ways.
The numbers tell the story. Tariffs – the taxes countries charge on imported goods – will be eliminated or reduced on 95 percent of New Zealand’s exports to India. Nearly 57 percent of those exports will face zero tax from the very first day, rising to 82 percent once the agreement is fully in place. That matters because the taxes being removed were significant. Lamb faced a 33 percent tariff. Wine faced 150 percent. Mānuka honey was taxed at 66 percent. These weren’t minor obstacles – they made it almost impossible to compete.
Several outcomes are firsts. India has never before given preferential access for apples or mānuka honey in any trade deal. Kiwifruit gets duty-free access within a quota nearly four times our current export volumes. A “most-favoured-nation” clause – which simply means that if India later offers anyone else a better deal, New Zealand automatically gets the same – protects our position into the future.
The timing is important. India’s middle class already stands at over 400 million people – bigger than the entire European Union – and is expected to grow to 700 million within five years. India’s economy is forecast to reach NZ$12 trillion by 2030, making it the world’s third largest. New Zealand is getting preferred access at exactly the right moment.
There is also a bigger picture here. Global trade has become less predictable. Supply chains have been disrupted, and the international rules that small trading nations like New Zealand depend on are under pressure. Building stronger ties with a large, stable, democratic partner like India is not just good for exporters – it is good for New Zealand’s long-term economic security.
For the Indian community in New Zealand, the practical opportunities are real. Many already work across both markets in professional services, technology, food, and trade – understanding both cultures and both ways of doing business in a way that gives them a genuine edge. This agreement levels the playing field with India’s existing FTA partners and opens new possibilities, particularly in services, FinTech, and food and dairy ingredients, that were previously closed or costly.
Some have tried to stoke fear about what this agreement means for immigration. The facts are that the FTA includes up to 1,667 temporary skilled work visas per year – capped, three-year, and non-renewable. That is less than six percent of the skilled visas New Zealand already issues every year. Student work rights are simply written into the agreement at levels that already exist. Nothing new is being added. Claims about open borders or uncapped immigration are not based on what the deal actually says.
There is still more work to be done. Full dairy access was not achieved. Mānuka honey will still carry a 16.5 percent tariff even after five years. Wine tariffs, though dramatically reduced from 150 percent, will not disappear entirely. A formal review is built into the agreement for one year after it takes effect, giving both countries a chance to keep improving on these outcomes.
But what has been achieved is real. New Zealand is a small country that succeeds by building strong relationships and offering products and services of genuine quality. Securing preferred access to the world’s fastest-growing major economy – and doing so on terms that, for several products, no other country has managed before – is something worth recognising. The New Zealand-India relationship has had enormous potential for a long time. This agreement is what it looks like when that potential finally gets to work. -Dr Parmjeet Parmar, ACT party MP
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