# India-New Zealand Free Trade Pact Takes Effect Opening Tariff Free Exports and Phased Fruit Inflow

> The bilateral free trade pact between India and New Zealand took effect on October 20, granting 100 percent duty-free access to Indian exports while setting up phased import duty relief for kiwi and apples starting in year two.

**Type:** article · **Category:** Business · **Published:** 2026-10-20 · **Source:** TrendKia
**Canonical:** https://trendkia.com/en/business/mukta-vyapara-samajhaute-ke-tahata-india-aura-new-zealand-ke-bicha-khula-naya-bajara-janen-kaba-ghatenge-phalon-ke-dama-49556 · **Language:** English
**Tags:** India New Zealand FTA, Free Trade Agreement, Piyush Goyal, Apple Import Duty, Kiwi Imports, Manuka Honey, Indian Agricultural Exports

A new chapter in international commerce began on October 20 as the comprehensive bilateral free trade agreement between India and New Zealand officially entered into force. The implementation of this trade pact opens up reciprocal market access for businesses in both nations while paving the way for employment generation across diverse economic sectors. Outlining the contours of the arrangement, Union Minister of Commerce and Industry Piyush Goyal announced that the agreement guarantees zero-duty access for 100 percent of Indian exports entering New Zealand. This milestone is set to provide Indian agricultural producers, including growers of vegetables, spices, and fruits, with extensive access to a sophisticated consumer market in the Pacific region.

## Consumers Must Wait Another Year for Cheaper Fruit
Despite the official rollout of the agreement, domestic consumers eager to purchase imported New Zealand apples and kiwi at reduced retail rates will need to remain patient. The regulatory framework issued by the Ministry of Commerce and Industry and the Directorate General of Foreign Trade indicates that price relief on key agricultural commodities will not materialize immediately. Under the published tariff rate quota allocation guidelines, no concessional import quota has been made available for either apples or kiwi during the initial year of the treaty. Consequently, prevailing retail market rates for these premium fruits will remain largely unaffected throughout the current fiscal year.

## Zero Duty Framework for Kiwi Starting in Second Year
The pricing dynamics will undergo a dramatic shift starting in the second year of the treaty when New Zealand kiwi enters the Indian market under a complete customs duty waiver. To prevent sudden market saturation, authorities have devised an incremental volume quota system. Under this structure, an import volume of 8,000 tonnes will be allowed duty-free in the second year, expanding to 9,750 tonnes in the third year and 11,500 tonnes in the fourth year. The ceiling will climb to 13,250 tonnes in the fifth year before settling at a steady annual threshold of 15,000 tonnes from the sixth year onwards. However, this full tax concession applies solely if the imported fruit carries a minimum Cost, Insurance, and Freight valuation of $1.80 per kilogram, ensuring high quality while steadily softening Indian retail prices.

## Apples to See Import Duty Slashed by Half with Quotas
Foreign apples, which are currently subject to a 50 percent customs duty in India, will also receive tariff relief beginning in the agreement's second year. The pact halves the prevailing tariff to 25 percent on a calibrated volume of imports from New Zealand. Under the allocated tariff quota, India will permit 35,000 tonnes of apples to enter under the reduced 25 percent rate during the second year. This volume ceiling will be expanded gradually over time, reaching an annual cap of 45,000 tonnes by the sixth year of implementation. Because the tariff rate drops by half on a significant volume of imports, retail prices for imported premium apples are expected to decline across urban Indian grocery markets once year two begins.

## Protective Measures for Domestic Orchardists and Farmers
While lowering trade barriers for foreign fruit, the Indian government has incorporated stringent safeguards to shield indigenous fruit growers from predatory pricing and market instability. To prevent foreign produce from flooding regional markets at artificially suppressed prices, authorities established a mandatory floor price for overseas apples. The treaty mandates that imported apples must adhere to a minimum Cost, Insurance, and Freight benchmark of $1.25 per kilogram. This regulatory mechanism prevents cheap dumping, ensuring that orchardists across Himalayan states such as Jammu and Kashmir, Himachal Pradesh, and Uttarakhand retain fair competitive positioning against international suppliers.

## Provisions for Manuka Honey and Albumin Imports
Beyond the fresh fruit sector, the bilateral arrangement establishes favorable trading terms for processed food components and high-value nutritional goods. New Zealand's renowned manuka honey has been granted an initial entry quota of 40 tonnes during the agreement's first year, which will expand to 200 tonnes annually from the second year onward. In parallel, albumin imports will benefit from a preferential 11 percent concessional duty rate. The import quota for albumin starts at 200 tonnes in the first year and will scale up steadily over a five-year horizon to reach 3,000 tonnes annually, providing domestic processors with reliable raw material inputs.

## What this means for you
The activation of this free trade pact alters retail pricing timelines for shoppers and creates duty-free overseas channels for Indian exporters.

- **For Indian grocery consumers:** Retail prices for New Zealand kiwi and apples will not decrease during the ongoing financial year. Shoppers will need to wait until the agreement's second year to purchase duty-free kiwi and apples under the reduced 25 percent tariff rate.
- **For Indian agricultural exporters:** All domestic goods shipped to New Zealand will now enjoy complete duty-free entry into that market. Farmers producing spices, vegetables, and specialty fruits can tap into an affluent buyer base without tariff hurdles.
- **For domestic apple orchardists:** A mandatory floor price of $1.25 per kilogram Cost, Insurance, and Freight prevents foreign apples from undercutting local wholesale rates. Growers in regions like Kashmir and Himachal Pradesh are shielded from predatory international dumping.
- **For food and health industries:** Allocated quotas for manuka honey and albumin at preferential duty structures provide predictability for commercial users. Food manufacturers and wellness firms will gain steady access to specialized nutritional ingredients.

## Why this happened
India and New Zealand finalized and activated this free trade pact on October 20 to stimulate reciprocal commercial growth, dismantle tariff barriers, and expand bilateral market opportunities.

- **Expansion of export markets:** Both economies sought broader bilateral avenues to foster employment and enhance trade flows. India specifically aimed to secure uninhibited, tariff-free foreign access for its indigenous agricultural output, including spices, vegetables, and fresh fruits.
- **Protection of domestic agricultural livelihoods:** The deliberate decision to delay fruit tariff concessions until the second year and set minimum import pricing arose from the need to safeguard domestic farmers. The administration wanted to make sure overseas produce could not be unloaded into Indian wholesale markets at artificially depressed rates.
- **Calibrated quota implementation:** Enforcing a zero quota for concessional fruits in year one and slowly raising tonnage thresholds in subsequent years ensures market equilibrium. This phased mechanism prevents severe domestic price shocks while fulfilling bilateral trade obligations.

## Questions & Answers

### 1. When did the India-New Zealand Free Trade Agreement come into force?
The bilateral free trade agreement officially became effective between both countries on October 20.

### 2. Will New Zealand kiwi and apples become cheaper immediately?
No, there is no concessional quota allocated for these fruits in the first year, so consumers will have to wait until year two for price cuts.

### 3. What will be the customs duty on kiwi starting from the second year?
Import duties on New Zealand kiwi will be completely eliminated, making it entirely duty-free from the second year onwards.

### 4. What volume quotas have been allocated for apples and kiwi in the second year?
The agreement permits 8,000 tonnes of duty-free kiwi and 35,000 tonnes of apples at a halved 25 percent tariff rate in the second year.

### 5. How does the treaty protect Indian orchardists from foreign price competition?
A mandatory floor benchmark of $1.25 per kilogram Cost, Insurance, and Freight has been fixed for imported apples to prevent predatory dumping.

### 6. What concessions apply to New Zealand manuka honey and albumin?
Manuka honey receives a 40-tonne quota in year one scaling to 200 tonnes annually, while albumin gets an 11 percent concessional duty rate.

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