New Zealand lamb will enter the Indian market duty-free from the date the country's new free trade agreement (FTA) with India takes effect, eliminating a 33% tariff that has long blocked Wellington from one of the world's fastest-growing protein consumer markets, according to Farmers Weekly.

The deal, signed in New Delhi on April 27, also delivers immediate duty-free access for wool and forestry products, but leaves the country's dairy sector almost entirely outside the new tariff framework.

The agreement was signed by Indian Commerce and Industry Minister Piyush Goyal and visiting New Zealand Trade and Investment Minister Todd McClay. It will eliminate or reduce tariffs on around 95% of New Zealand exports to India by value, with India giving immediate duty-free access on 30% of tariff lines and phased elimination on a further 35.6% of lines over three to ten years, according to the Tribune of India. India will receive duty-free access for 100% of its exports to New Zealand from day one.

Sheep meat is the headline win for New Zealand's pastoral sector. The 33% tariff scrapped under the deal matches the zero tariff rate already enjoyed by Australian competitors under their existing FTA with India, removing a longstanding cost disadvantage for New Zealand exporters in the Indian market. Beef + Lamb New Zealand chair Kate Acland said the immediate impact on farm gate returns might be limited but described the move as "an important step for future resilience and profitability in the sector," Farmers Weekly reported.

Wool will see its 2.75% tariff removed immediately, while forestry products carrying tariffs of up to 11% will also gain day-one duty-free access, covering more than 95% of the category.

Horticultural access is more constrained, governed by tariff-rate quotas (TRQs) backed by minimum import prices and safeguard mechanisms. New Zealand kiwifruit will get an immediate 6,250-tonne tariff-free quota, rising to 15,000 tonnes over six years. Apple tariffs will be halved to 25% on 32,500 tonnes from implementation, with the quota rising to 45,000 tonnes over the same period. Avocados, persimmons and Manuka honey are also covered under the quota framework.

Seafood tariffs, currently at 33%, will be eliminated over seven years on items including mussels and salmon, the Business Standard reported.

Dairy, New Zealand's largest export earner, is the deal's most visible omission. India has retained existing protections on milk, cream, whey, yoghurt and cheese, alongside a wider exclusion list covering animal products other than sheep meat, vegetable products including onions, chana, peas, corn and almonds, sugar, edible oils, copper and aluminium, and arms and ammunition.

Limited provisions were secured for dairy ingredients including milk albumins, but the New Zealand dairy sector's flagship exports remain locked out of the Indian market.

Fonterra Co-operative Group, New Zealand's largest dairy exporter, said the outcome was disappointing although unsurprising.

"It is disappointing that the negotiations with India were unable to secure any significant new core dairy access opportunities for New Zealand into the Indian dairy market," Fonterra global external affairs director Simon Tucker said in a company statement on December 21. "This outcome is, however, not a surprise given India's long-standing sensitivities in relation to its dairy market."

McClay said the agreement included a one-year review mechanism that could revisit dairy market access, and that New Zealand would benefit from any future improvements India offered other dairy-exporting partners under most-favoured-nation provisions.

The agreement carries a $20bn New Zealand investment commitment to India over 15 years, spanning manufacturing, infrastructure, services, innovation and job creation. The commitment is backed by a rebalancing mechanism that allows India to suspend FTA benefits if the investment does not materialise within the stipulated period, according to Drishti IAS.

The deal must be ratified by the New Zealand parliament. Coalition partner New Zealand First has invoked the "agree to disagree" provision of its coalition agreement with the governing National and ACT parties, with leader Winston Peters describing the deal as bad for New Zealand. Passage is expected to depend on opposition Labour Party support, which has been forthcoming.

For New Delhi, the agreement is the latest in a wave of trade deals as the country diversifies its export base in the face of steep US tariffs imposed since August 2025 and disruption to Persian Gulf and Red Sea shipping lanes following the outbreak of the US-Iran war on February 28 2026. The country has signed agreements with Australia, the United Arab Emirates, Mauritius and the European Free Trade Association, and is in active talks with the European Union, the United Kingdom and Oman. Bilateral trade between India and New Zealand is targeted to double to $5bn within five years.

For Wellington, the deal forms part of a wider strategy to reduce reliance on China, the country's largest trading partner. Bilateral trade between India and New Zealand was worth $2.15bn in the year through June 2025.