WELLINGTON, New Zealand — New Zealand’s Parliament approved legislation Wednesday implementing a free-trade agreement with India, clearing a major domestic hurdle for a pact that will eliminate or significantly reduce tariffs on about 95% of New Zealand exports to India. The measure passed 93-29 with support from the opposition Labour Party.
Under the agreement, 57% of New Zealand’s current exports to India will become duty-free when the pact takes effect, with preferential treatment eventually extending to 95%. India, meanwhile, will receive duty-free access for its goods entering New Zealand. The agreement will take effect after both countries complete their remaining ratification procedures.
“For exporters, the benefits are immediate and substantial,” Trade and Investment Minister Todd McClay said. He said New Zealand’s kiwifruit industry alone expects to save about NZS125 million in tariffs over five years. Other products benefiting from immediate or phased tariff reductions include wool, sheep meat, forestry goods, seafood, apples and wine.
The deal comes as economic ties between the countries expand. Two-way trade totaled NZS3.99 billion, about S2.29 billion, in the year through June 2026, with India ranking as New Zealand’s ninth-largest export market for goods and services. The governments have set a goal of doubling bilateral trade by 2030.
Agriculture was among the most sensitive issues in the negotiations. New Zealand secured improved access for products including kiwifruit, apples and wool, but India retained protections for much of its dairy sector. New Zealand First opposed the agreement, arguing that it offered insufficient gains for dairy producers and objecting to immigration-related provisions. Party leader Winston Peters said the pact gave “too much away” without securing enough in return.
Labour supported the legislation despite expressing reservations about parts of the agreement. Labour leader Chris Hipkins said tariff reductions and greater market access were welcome but urged New Zealand businesses to carefully assess the risks. “This is not the deal Labour would have negotiated,” he said in April, while emphasizing the importance of New Zealand’s relationship with India.
The agreement follows years of attempts to deepen trade ties. India and New Zealand first pursued bilateral free-trade negotiations more than a decade ago without reaching a deal. Prime Ministers Narendra Modi and Christopher Luxon formally relaunched negotiations in March 2025, and the agreement was concluded later that year before being signed in April 2026.
The pact also reflects a broader push by India and other major economies to diversify trade relationships at a time of shifting tariffs, geopolitical tensions and uncertainty in global supply chains. For New Zealand, India’s population of more than 1.4 billion offers a potentially much larger market for food, fiber and services; for India, the agreement expands its network of trade partnerships while retaining protections for politically sensitive agricultural industries. The next step is completion of ratification in both countries before the tariff reductions begin
