India-New Zealand FTA to unlock $6-billion market for Indian exporters

India New Zealand FTA to open market for $6 billion worth of products

The free trade agreement (FTA) with New Zealand is poised to significantly widen India’s export footprint, offering access to nearly 40 percent of import segments in the island nation that have largely remained out of reach of Indian exporters.

The commerce ministry on December 22 announced the conclusion of negotiations on the agreement, under which all Indian exports will have zero-duty access to New Zealand. India, in turn, will liberalise tariffs on about 95 percent of New Zealand exports.

New Zealand imported goods worth $47.5 billion across 2,871 product categories in 2024. India’s penetration remains shallow. In 1,144 categories worth $6 billion, India’s exports were negligible, while in another 506 categories worth $2.3 billion, Indian shipments were below $1,000.

Overall, India exported just $742 million to New Zealand in 2024, underscoring the scale of the untapped opportunity.

Tariff reset reshapes competitiveness

The FTA alters this equation. With tariffs dropping to zero, Indian exporters are positioned to compete more effectively in sectors currently dominated by other suppliers, especially where India already has scale but lacked price competitiveness.

These include machinery and parts, metals, chemicals, vehicles, electronics, textiles, tyres, plastics and a range of industrial goods. In many of these categories, India’s global export presence is strong but its footprint in Auckland and the wider New Zealand market is limited.

New Zealand, for instance,  imported nearly $140 million worth of immunological products such as blood-typing kits and insulin injections, yet sourced virtually nothing from India despite New Delhi exporting $300 million globally in this category.

Similarly, New Zealand’s forklift imports stood at around $60 million, even as India exported $141 million worth of these worldwide, again without meaningful penetration. A comparable gap exists in grape imports, where New Zealand imported $48.3 million worth, with negligible sourcing from India.

Strongholds that can scale

In some product lines, India already enjoys a commanding position.

Indian exporters account for 70–95 percent of New Zealand’s imports in categories such as carpets, spices, rice, textiles, jewellery, and some manufactured goods. Preferential access under the FTA could allow these segments to scale up rapidly.

Yet even in sectors where India is a global powerhouse, penetration remains modest. Pharmaceuticals, which account for nearly $20 billion of India’s exports globally, saw shipments of just $69 million to New Zealand, against the country’s total imports of $763 million.

In precious metal jewellery, India’s exports were less than a quarter of New Zealand’s $108 million import market. T-shirts accounted for only 10 percent of New Zealand’s $95 million imports, while plastic plates, sheets and films made up just 7 percent of a nearly $50 million import segment.

A structural opening

While actual gains will depend on firm-level competitiveness, logistics and regulatory alignment, the agreement provides a rare opportunity for India to break into mature, high-income markets across industrial goods, consumer products and pharmaceuticals.

Beyond headline numbers, the pact also signals India’s growing focus on deep market access agreements that go beyond traditional strongholds—potentially reshaping its export geography over the medium term.