Wellington, New Zealand – The New Zealand Parliament on Wednesday approved a significant free trade agreement (FTA) with India, a move Prime Minister Christopher Luxon hailed as a historic achievement that many believed was unattainable. The legislation's passage marks a crucial step towards implementing the economic pact, which was initially signed on April 27.
PM Luxon Celebrates Landmark Deal
Prime Minister Luxon took to social media to celebrate the parliamentary vote, stating, "People told me a Free Trade Agreement with India wasn't possible. Well, today that deal passed its final vote in Parliament. It's happening." He emphasized that the agreement would generate more employment opportunities, elevate incomes for New Zealanders, and unlock access to India's vast consumer market of 1.4 billion people.
The Prime Minister reiterated his party's commitment, saying, "National said we'd secure a Free Trade Agreement with India in our first term, and we've delivered." He underscored the deal's potential to enhance New Zealand's economic growth by providing its businesses greater access to the Indian market.
Key Provisions and Economic Impact
The New Zealand government projects that the FTA will eventually eliminate or substantially reduce tariffs on 95% of its exports to India. Upon its initial implementation, approximately 57% of New Zealand's exports to India are expected to become duty-free. This includes a wide range of goods that currently face peak tariffs of up to 10% on the Indian side, such as ceramics, carpets, automobiles, and auto components.
Conversely, the agreement also grants duty-free access for 100% of India's exports to New Zealand once it comes into effect. Beyond trade, New Zealand has committed to investing $20 billion in India over a 15-year period, further cementing the economic partnership.
Implementation Timeline
The free trade agreement is anticipated to become operational in the latter half of October 2026. Commerce Secretary Rajesh Agrawal stated that the exact date would be announced soon, pending the completion of operationalization procedures by both nations. Officials have indicated that October 19 is the expected effective date for the deal to come into force.
The passage of this legislation underscores a strengthening of economic ties between New Zealand and India, promising mutual benefits through increased trade and investment.