India and New Zealand have completed the ratification process for their free trade agreement, with the pact set to come into force on October 20, 2026, as reported by Reuters.
The agreement, signed in April, is expected to strengthen trade and investment ties between the two countries as India looks to expand its export markets amid changing global trade conditions.
According to Reuters, Indian Commerce and Industry Minister Piyush Goyal announced that the agreement will officially take effect on October 20 following ratification by both countries. The development comes as New Delhi seeks to increase exports and attract investment while global trade patterns continue to shift.
Both countries completed their respective ratification procedures on Monday. Reuters reported that New Zealand Trade and Investment Minister Todd McClay exchanged the ratification documents with India's High Commissioner to New Zealand, Muanpuii Saiawi, at Parliament in New Zealand.
The agreement comes against the backdrop of increasing trade barriers globally. Reuters noted that the deal is also significant as India works to diversify its export destinations beyond the United States, its largest export market. New Delhi has been pursuing trade agreements with major economies, including Britain and the European Union.
New Zealand's Parliament passed the legislation required to implement the agreement last week, completing an important part of the country's domestic ratification process.
Under the agreement, tariffs on about 95% of New Zealand's exports to India will either be eliminated or reduced once the pact is fully implemented.
Reuters reported that 57% of New Zealand exports will receive tariff-free access to India from the first day of the agreement's implementation. This includes products such as sheep meat, wool and coal, while more than 95% of forestry and wood exports will also receive immediate duty-free access.
The proportion of New Zealand exports receiving duty-free access is expected to rise to 82% over time. The remaining 13% will receive significant tariff reductions rather than complete elimination of duties, according to Reuters.
The agreement also provides preferential quota access for New Zealand products such as apples, kiwifruit and albumins. Wine exporters will also benefit from reduced tariffs, with duties expected to fall from as high as 150% to either 25% or 50% over a period of 10 years, depending on the value of the product.
The agreement provides all Indian goods with duty-free access to the New Zealand market, while also easing mobility arrangements for certain students and workers.
Reuters reported that the agreement is designed to create greater opportunities for Indian exporters while strengthening economic links between the two countries. New Zealand has also committed to promoting investment of $20 billion in India over the next 15 years.
The investment commitment is part of the broader economic relationship being developed alongside the trade agreement. The pact covers not only goods but also areas related to services, investment and mobility.
For New Zealand exporters, the agreement provides preferential access for several agricultural and food products, including apples and kiwifruit, while wine tariffs will be gradually reduced.
The trade agreement comes at a time of considerable uncertainty in global trade. Reuters reported that India has accelerated efforts to diversify its export markets through trade agreements with major economies as it faces changing tariff and trade conditions.
The development also follows new US trade measures targeting countries that purchase Russian oil. Reuters reported that US President Donald Trump has signed legislation allowing tariffs of up to 100% on countries such as India over purchases of Russian oil.
Against this backdrop, India has been working to strengthen economic relationships with other major markets. Agreements with the United Kingdom, the European Union and now New Zealand form part of those broader efforts to expand trade opportunities.
For New Zealand, the agreement provides greater access to the large Indian consumer market and offers exporters opportunities across several sectors.
"The New Zealand-India FTA will level the playing field and unlock access for Kiwi businesses in one of the fastest growing markets in the world," McClay said in a statement.
Reuters reported that McClay described the agreement as an opportunity to diversify New Zealand's export base at a time when businesses globally are facing higher trade barriers and uncertainty.
He also said the agreement would strengthen the broader relationship between the two countries, extending beyond trade to areas including investment, business and people-to-people connections.
India and New Zealand have also set an ambitious target for their bilateral trade relationship.
Prime Ministers Narendra Modi and Christopher Luxon have committed to doubling bilateral trade by 2030. Reuters reported that two-way trade currently stands at around $2.3 billion in the 12 months through June.
The free trade agreement is expected to provide a framework for expanding this trade by lowering tariffs and creating preferential access for businesses in both countries.
"India and New Zealand show that we can agree to terms that are beneficial for trade and businesses," McClay said via video conference, citing rising tariffs and global business uncertainty.
The agreement will officially enter into force on October 20, marking a new phase in the economic relationship between India and New Zealand. Reuters reported that both countries have now completed the necessary ratification procedures, clearing the way for implementation of the pact.