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The India–New Zealand Free Trade Agreement (FTA) 2026, come into force on 20 October 2026, making trade and investment between the two countries easier. It provides preferential access for 95% of current New Zealand exports to India and also covers services, investment, customs, talent mobility and MSMEs, along with a US$20 billion investment commitment from New Zealand.
The FTA does not replace India’s company-law requirements. New Zealand businesses must still choose a suitable structure, such as a private limited company, LLP, branch or liaison office, and follow applicable FDI rules.
Table of Contents
- What is the India–New Zealand Free Trade Agreement?
- Key Dates at a Glance
- What changes for New Zealand exporters?
- The Big Investment Push: US$20 Billion and a Dedicated Desk
- Services and People: Easier to Send Your Team
- How the FTA Makes Company Formation in India Easier
- Which business structure should you choose in India?
- Frequently Asked Questions
- Ready to Set Up Your Business in India? Talk to Mercurius
What is the India–New Zealand Free Trade Agreement?
A free trade agreement is simply a deal between two countries to cut the taxes they charge on each other’s goods (called tariffs) and to remove some of the red tape that slows business down.
The India–New Zealand FTA goes further than goods. It also covers services, investment, customs, the movement of skilled people, support for small businesses, and cooperation in areas like agriculture, technology and tourism.
Today, two-way trade between the two countries is worth about NZ$3.95 billion a year. Both Prime Ministers have said they are confident bilateral trade can double over the next five years.
Key Dates at a Glance
- March 2025: Formal negotiations began during Prime Minister Christopher Luxon’s visit to India.
- 22 December 2025: Both countries announced that talks had been concluded.
- 27 April 2026: The agreement was signed in New Delhi by New Zealand’s Trade Minister Todd McClay and India’s Commerce and Industry Minister Piyush Goyal.
- September 2026: New Zealand’s Parliament passed the law needed to put the deal into effect, by 93 votes to 29.
- 21 September 2026: PM Luxon announced that the deal was finalised and would come into force the following month.
- 20 October 2026: The FTA officially comes into force.
What changes for New Zealand exporters?
This is where the deal gets exciting for Kiwi businesses. Around 95% of New Zealand’s current exports to India will either become tariff-free or face lower tariffs over time. About 57% will be completely tariff-free from day one, and this rises to 82% over the years.
Here are some of the main wins:
- Sheep meat, wool and coal: tariffs removed straight away.
- Forestry: over 95% of exports enter tariff-free from day one.
- Kiwifruit and apples: new quota access, with New Zealand becoming the first country to get preferential access for apples in any Indian FTA.
- Wine: tariffs cut by 66–83% over ten years.
- Mānuka honey: tariffs cut by 75% over five years.
One honest note: most dairy products, such as butter and cheese, are not part of the tariff cuts. India has kept its dairy sector protected, although there is a fast-track path for certain dairy ingredients used for further processing and export.
Customs will also move faster. Once all requirements are met, goods should be cleared within 48 hours of arrival, and India will try to clear perishable goods and express shipments within 24 hours.
On the other side, every Indian product will enter New Zealand tariff-free from day one. For Kiwi businesses, that means cheaper Indian machinery, textiles and other inputs.
The Big Investment Push: US$20 Billion and a Dedicated Desk
One of the most important parts of the India-New Zealand agreement is investment. New Zealand has committed to promote private-sector investment into India, with the aim of reaching US$20 billion over 15 years.
To support this, India will set up a special New Zealand Investment Desk. Its job is to help New Zealand investors sort out any issues across the whole investment journey, from the first planning stage to running the business day to day.
Services and People: Easier to Send Your Team
India has made commitments in almost 100 additional services sectors beyond its World Trade Organization commitments. These include engineering, environmental services, tertiary and adult education, and audio-visual services.
There is also a “most favoured nation” promise. In simple terms, if India gives better services access to another country in future, New Zealand will automatically get the same benefit.
The deal also includes rules for intra-corporate transferees, which makes it easier for New Zealand companies to move key staff into their Indian operations. Going the other way, New Zealand will offer up to 5,000 temporary employment visas for skilled Indians at any one time and 1,000 working holiday visas each year, which can help Kiwi firms find skilled talent.
How the FTA Makes Company Formation in India Easier
The FTA does not replace India’s company law, so you will still register your business under Indian rules. What the agreement does is remove many of the practical hurdles around setting up and running a company in India:
- Lower costs: Reduced tariffs make importing materials and exporting products cheaper, which improves the numbers behind your Indian business plan.
- A dedicated contact point: The New Zealand Investment Desk gives you somewhere to go when problems come up.
- More certainty for service firms: Services commitments are written into a treaty, and the most favoured nation clause protects your access in the future.
- Easier movement of people: Rules on intra-corporate transfers help you place trusted managers in your Indian entity.
- Faster customs: Quicker clearance means your supply chain runs more smoothly.
- Help for small businesses: A dedicated SME chapter sets up contact points and puts key information online, so smaller New Zealand companies can use the deal too.
Which business structure should you choose in India?
Most New Zealand businesses entering India choose one of these options:
- Private limited company (wholly owned subsidiary): This is the most popular choice. It is registered with India’s Ministry of Corporate Affairs under the Companies Act, 2013. You need at least two directors (one of whom must be resident in India) and at least two shareholders. In most sectors, 100% foreign ownership is allowed under the “automatic route”, which means no prior government approval is needed.
- Limited Liability Partnership (LLP): Foreign investment in an LLP is allowed in sectors where 100% foreign investment is permitted under the automatic route.
- Liaison or branch office: A good way to test the market first. These need approval through an authorised bank under Reserve Bank of India (RBI) rules, and a liaison office cannot earn income in India.
After you incorporate, there are a few more steps, such as reporting the foreign investment to the RBI and getting your tax and GST registrations in place. Some sectors also have caps on foreign ownership or need government approval, so it’s worth checking your sector early.
Frequently Asked Questions
1. When does the India–New Zealand FTA come into force?
It comes into force on 20 October 2026.
2. Can a New Zealand company fully own an Indian company?
Yes, in most sectors 100% foreign ownership is allowed under India’s automatic route. A few sectors have limits.
3. Is the deal fixed forever?
No. Many tariff cuts are phased in over several years, and both countries have agreed to review the agreement one year after it comes into force.
Ready to Set Up Your Business in India? Talk to Mercurius
The India–New Zealand FTA has opened the door. At Mercurius, we help international businesses set up and grow in India, with a team of 400+ professionals With offices in New Delhi, Noida, and Gurugram, as well as branch or representative offices in the US, UK, Japan, and Dubai.
From choosing the right structure and completing company incorporation, to FDI and RBI reporting, tax and GST registration, accounting, and payroll, we handle each step so you can focus on building your business in India.
Speak to our company formation experts today at masllp.com and let’s plan your India entry together.
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SOURCES
- The Economic Times: India-New Zealand FTA finalised; comes into force next month (21 September 2026)
- Wikipedia: New Zealand–India Free Trade Agreement
- Ministry of External Affairs, India: bilateral document on the India–New Zealand FTA
- New Zealand Ministry of Foreign Affairs and Trade (MFAT): NZ-India FTA Key Outcomes
- Press Information Bureau (PIB), Government of India: India–New Zealand FTA signed (April 2026)
- ANI / The Tribune: PM Luxon statement and NZ Parliament vote (September 2026)
