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Five months ago, New Zealand and India signed a free trade agreement in New Delhi that both governments called historic. That agreement has been winding its way through Parliament, but its still not quite law.
For exporters sitting on tariff bills they could soon stop paying, and for an economy the Government has bet on for future growth, the gap between "signed" and "in force" is where the real story appears to be right now.
India’s on track to become the world's third-largest economy, with a middle class already estimated at 435 million and projected to top a billion by 2047. New Zealand has never had a comprehensive trade agreement with a market this size and this fast-growing. For a small trading nation whose government has set a target of doubling export value by 2034, and which has spent the past two years trying to diversify away from over-reliance on China, India is arguably the major part of the game.
What's in it for New Zealand exporters ?
Once fully in force, the FTA removes or cuts Indian tariffs on 95 percent of New Zealand's current exports. Some of that kicks in immediately:
• 57 percent of exports become duty-free from day one — including sheep meat, wool, coal, leather and most forestry and industrial products.
• Apples, kiwifruit and manuka honey get dedicated quota access and kiwifruit exporters are expecting roughly $125 million in tariff savings over five years once the cuts land.
• Seafood, including mussels and salmon, gets duty-free access phased in over seven years.
• Wine and priority services carry a Most Favoured Nation guarantee, which means if India ever gives another country (say, Australia) better terms, New Zealand automatically gets them too, but only once our own agreement is actually in force.
The one big exception is of course dairy, New Zealand's largest export earner, and almost entirely excluded, protected by India's politically powerful smallholder dairy sector. Beef is similarly limited.
For everyone else, Todd McClay's own department is already using pre-deal numbers as a preview of what's possible: apple exports to India are reportedly up 63 percent on 2024, making India New Zealand's fourth-largest apple market, and the first Bluff log shipment to India since 2020 has already gone out, before the FTA's actual tariff cuts have even taken effect.
What's in it for Kiwi consumers ?
New Zealand also eliminates its own tariffs on Indian goods, so expect cheaper Indian textiles, pharmaceuticals, engineering goods and jewellery on New Zealand shelves and in New Zealand supply chains over time. There are also visa provisions for Indian skilled workers and students, aimed at easing skills shortages in sectors like healthcare, IT and engineering.
So why hasn't it happened yet?
Because a signature isn't the finish line. New Zealand's Parliament has to pass enabling legislation before any of this takes legal effect, and that process is still under way.
The timeline in brief:
• 27 April 2026 - Agreement signed in New Delhi.
• 22 June -A parliamentary select committee finished examining whether the deal was worth doing at all, and concluded the benefits were "significant”, although the critics have raised a number of questions on various clauses and what they mean in practice.
• 23 June - The actual enabling bill that makes it all legal had its first reading and went back to select committee. National, ACT and Labour support it; New Zealand First opposes it under a coalition "agree to disagree" arrangement.
• 19 July -Public submissions on the bill closed.
• 27 & 30 July -The committee heard oral submissions. Business groups, including BusinessNZ's 76,000-employer network, pushed for the bill to pass without changes, warning that delay erodes New Zealand's competitive position. Critics focused on immigration settings being locked into a treaty beyond the reach of future governments, and a number of other concerns.
• September 2026 - The bill sits with the committee. No date has been set for its report back to Parliament. Standing Orders give committees up to six months (which would push this out to late December), but the Government has said it wants ratification "later this year" -, suggesting arrival day will be within weeks not months.
Once New Zealand's Parliament passes the bill, India also has to complete its own ratification, which its government confirmed in July was under way but gave no timeline for.
Exporters ask when
Every month this sits in limbo is a month those Most Favoured Nation benefits on wine and services stay locked. The UK's FTA with India took effect on 15 July. If India gives British exporters an edge before New Zealand's deal is live, New Zealand exporters miss out on matching it until ratification catches up.
There's also the issue over NZ investment into India : India's government has called the deal's US$20 billion investment clause a "commitment" to invest in India; New Zealand's Trade Minister insists the same treaty text is only "a commitment to promote" investment. We are yet to see the ramifications of that possible misalignment in expectations.
If you export sheep meat, wool, forestry products, seafood, apples, kiwifruit or wine, or if you're a business hoping to tap India's growing middle class, this deal is coming, but not yet, and nobody in Wellington will commit to exactly when.
The select committee's report on the bill is the next thing to watch for. Until that emerges, the tariffs Indian buyers pay on New Zealand goods stay exactly where they are today.
-Asia Media Centre
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