Trade & Customs Oct 19, 2026 · 8 min read

India–New Zealand free trade deal starts Tuesday 20 October

India–NZ trade deal goes live: Indian clothing to New Zealand loses its duty of up to 10%. From Tuesday 20 October, New Zealand will charge zero duty on 100% of its tariff lines for Indian goods. Clothing, leather and footwear currently pay up to 10%. In our view the early volume will come in Indian apparel and footwear, not in New Zealand food going to India. India has opened about 70% of its tariff lines and keeps dairy out. It also needs origin proof under its CAROTAR rules and DGFT quota licences. Our call: by end of March 2027, NZ import data will show Indian apparel and footwear up by double digits year on year.

India–New Zealand FTA goes live: a clean cut southbound, a quota maze northbound
On Tuesday 20 October, New Zealand removes customs duty on 100% of its tariff lines for goods from India. Indian clothing, leather and footwear now pay up to 10% at the New Zealand border, and that falls to zero. The India–New Zealand free trade agreement (FTA) was signed in New Delhi on 27 April. It comes into force tomorrow.
“From tomorrow onwards, the India-New Zealand Free Trade Agreement is going to be implemented,” Sampath Kumar, India’s Additional Director General of Foreign Trade, told ANI on 19 October.
Our view: this is two deals in one, and forwarders should treat them that way. Freight from India to New Zealand gets a simple, full duty cut from the first day. Freight from New Zealand to India gets part access, quotas, price floors and a lot of paperwork. The growth in the next six months will be on the southbound leg. Northbound, the first test is whether brokers can get the paperwork right.

What changes on Tuesday

Southbound first. New Zealand gives duty-free access to Indian goods on all tariff lines, India’s Commerce Ministry said in its signing release, published by PIB (the Press Information Bureau). The highest current New Zealand duties on Indian goods are up to 10% on textiles and clothing, leather, footwear and engineering goods. Gems and jewellery, pharmaceuticals, plastics, electronics, chemicals, sports goods and marine products face up to 5%, according to the same release.
“Till now, the maximum tariff on the textile and clothing sector and leather and footwear is up to 10%,” Kumar said. “From tomorrow onwards, it is going to become zero.”
Northbound is narrower. India offered market access on 70.03% of its tariff lines and kept 29.97% excluded, PIB said. India says that offer covers 95% of New Zealand’s bilateral trade. Dairy is excluded: milk, cream, whey, yoghurt and cheese. So are sugar, copper, aluminium, and gems and jewellery.
New Zealand’s trade minister, Todd McClay, said 57% of New Zealand exports to India would be tariff-free from day one, including wool and coal. He said more than 95% of forestry and wood exports would also get tariff-free access. That is according to AAP’s report in the Canberra Times on 21 September, when the two countries exchanged ratification documents. McClay also said a second round of tariff cuts would follow on 1 January 2027.
“The New Zealand-India FTA will level the playing field,” McClay said.

The Indian paperwork

India has published the legal detail in two documents.
The first is Customs Notification No. 32/2026-Customs, dated 16 October. It sets the preferential rates for BCD (basic customs duty), AIDC (agriculture infrastructure and development cess) and the Health Cess, according to a summary by Indian tax firm A2Z Taxcorp. Examples from that summary:

Sheep meat (heading 0204): BCD, AIDC and Health Cess all nil.

Kiwifruit with a CIF value (cost, insurance and freight: the landed value used for duty) of US$2.50 per kg or more: 15% BCD, nil AIDC.

Mānuka honey at a CIF of US$30 per kg or more: 51% BCD, nil AIDC. Each shipment needs a certificate from New Zealand’s Ministry for Primary Industries.

Wine is priced by the CIF value of a 750ml bottle. From US$5tounderUS$15, it pays 20% BCD and 75% AIDC. At US$15 or more, it pays 20% BCD and 50% AIDC.

The second is DGFT Public Notice No. 33/2026-27, dated 17 October. DGFT is India’s Directorate General of Foreign Trade. The notice sets out how importers get a TRQ (tariff rate quota: a fixed volume allowed in at a lower duty than normal). Mānuka honey priced from US$20tounderUS$30 per kg has an initial 40-tonne quota at 51% BCD. Albumins, a group of egg and milk proteins, have a 200-tonne quota at 10% BCD.
The process matters for brokers. According to A2Z Taxcorp, the importer needs a DGFT authorisation. It shows the importer’s name, address and IEC (importer-exporter code), the notification number, tariff item, quantity and validity. DGFT sends it electronically to ICES, the Indian Customs EDI system. Goods can be imported against the quota only after the quantity has been electronically debited in ICES.
PIB’s signing release says apples and kiwifruit are also managed through quotas, with a minimum import price and seasonal imports. PIB puts TRQ lines at only 0.06% of tariff lines. They cover the products New Zealand growers care most about.
Every claim also depends on origin. Preferences apply only to goods that qualify as New Zealand-originating. The importer must prove that to the customs Deputy or Assistant Commissioner under CAROTAR 2020, India’s rules for administering origin claims under trade deals, A2Z Taxcorp notes. CAROTAR puts the burden on the importer, not the exporter. An importer must be able to show how the goods meet the origin rule if customs asks.

How big is this lane

Not very. Merchandise trade between the two countries rose from US$873millionin2023–24toUS$1.3 billion in 2024–25, a 49% rise, PIB said. India’s merchandise exports to New Zealand were US$711million.IndianservicesexportstoNewZealandgrew13%in2024toUS$634 million.
New Zealand’s figures include services. Its foreign ministry (MFAT) puts two-way trade at NZ$3.95billionayear.AAPreportedNZ$3.99 billion for the year to June 2026. India is New Zealand’s ninth-largest market for goods and services exports, AAP said.
The governments have bigger plans. India’s commerce minister Piyush Goyal says the aim is to roughly double two-way goods and services trade within four to five years, to almost ₹35,000 crore, All India Radio reported on 21 September. New Zealand has committed to US$20 billion of investment in India over 15 years, PIB said. The deal includes a rebalancing clause if that investment falls short.

A deal that nearly split a government

This deal was fast. The two countries announced negotiations on 16 March 2025, and PIB says they concluded in a record nine months. It was not easy at home in New Zealand.
When talks closed in December 2025, NZ First leader Winston Peters said his party would vote against the enabling law. “It gives too much away, especially on immigration, and does not get enough in return for New Zealanders, including on dairy,” Peters said, as reported by 1News on 22 December 2025. He called it “neither free nor fair”.
The deal went ahead anyway. Dairy stays outside India’s tariff cuts, apart from duty-free access for food ingredients for re-export and, over seven years, bulk infant formula, 1News reported. Prime Minister Christopher Luxon called it “one of the proudest” things he has done in office, AAP reported.
In our reading, that history explains the shape of the deal. New Zealand gave full access because it had little to protect. India protected dairy and farm goods, so New Zealand’s food exporters get quotas and price floors, not open access.

What it means for forwarders

Southbound, India to New Zealand. Indian apparel, home textiles, leather goods and footwear lose up to 10% duty from the first sailing. On a low-margin garment order, that can decide which supplier wins. New Zealand buyers that have sourced from countries with existing New Zealand trade deals now have a new duty-free option. Forwarders with Indian exporter clients should confirm those clients are ready to issue the origin documents New Zealand requires. They should also make sure the duty saving shows in their quotes now, before buyers place orders for New Zealand’s summer and autumn ranges.
With US$711 million of Indian goods a year, much of this lane is small shipments. In our view, a duty cut will not create new direct shipping services on its own. It is more likely to add LCL volume (less than container load: cargo sharing a box) and some extra full boxes on the routes already in use.
Northbound, New Zealand to India. Wool, coal and forestry products are the clean wins, with immediate tariff-free access for most of them. Kiwifruit, apples, Mānuka honey and albumins need much more care. Brokers clearing them into India need four things lined up before the ship arrives: a DGFT authorisation with enough quota left, the ICES debit, the right CIF value against the price thresholds, and an origin file that will stand up under CAROTAR. For Mānuka honey, add the Ministry for Primary Industries certificate. Missing any one of them means paying the full duty, or the goods sitting at the port.
Watch the CIF thresholds closely. A kiwifruit shipment valued just below US$2.50perkg,orabottleofwinejustunderUS$5, falls outside the preferential band. In our view, Indian customs officers are likely to check declared values against those lines. Expect valuation queries in the first weeks.
Also mark 1 January 2027. McClay says a second round of tariff cuts takes effect then. Some importers may hold New Zealand cargo back until January to get the lower rate. That would make December lighter on the northbound leg and early January busier.

Our call

Our prediction: by the end of March 2027, New Zealand’s official import data will show imports of Indian apparel and footwear up by at least 10% year on year. We also expect the first Indian customs disputes over CAROTAR origin claims and CIF value thresholds on New Zealand fruit and wine within the first 90 days. Within six months, Indian trade bodies will raise them in public. Brokers who build those files properly now will clear faster than their competitors when the 1 January cuts arrive.

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