India Trade Deal With New Zealand Puts Kiwi Apples Above US Fruit

US has been long vying for lower duties on its apple exports.

Welcome to the India Edition, Bloomberg’s daily dive into what’s moving the worlds of business, markets and politics in this dynamic, fast-paced economy. I’m Menaka Doshi. If you didn’t receive this directly in your inbox, you can subscribe here, and share feedback with us here.

It looks like New Zealand has beaten the US in supplying cheaper apples to India, as the two countries concluded a free-trade agreement today that eliminates almost all levies on current trade items.

This is India’s third such pact this year, though it covers an insignificant $1.3 billion in bilateral trade, a large chunk of which is travel ($672 million) where the Pacific Ocean nation has the advantage.

Stats New Zealand

India’s key gains from this deal include more temporary employment visas, easier access to pharmaceuticals and medical devices and New Zealand‘s commitment to invest $20 billion over 15 years. Most importantly, Prime Minister Narendra Modi’s government made no concessions on allowing dairy imports, a politically sensitive topic.

New Zealand gets zero tariff on wool, coal, wood to begin with, lower duties on wine, avocados, blueberries and persimmons, and quota-based tariff cuts for kiwifruit and apple exports. It’s the first country to secure preferential access for apples in any Indian FTA, according to a New Zealand government statement.

That could peeve the Americans, who for long have been vying for lower tariffs on their apple exports to India. It’s a tiny trade, but a hot one as India’s consumption of imported fruit and nuts rose to nearly $5 billion last fiscal year, up over 10% on year.

I just checked – Washington apples cost 89 rupees (about $1) apiece in Mumbai on quick commerce sites.New Zealand apples are already cheaper at 66 rupees. That gap will widen if US President Trump and Modi don’t make up quickly.

India-New Zealand trade deal:

Prime Minister Narendra Modi and his New Zealand counterpart Christopher Luxon on Monday had a telephone conversation and announced the finalization of the India-New Zealand Free Trade Agreement (FTA). Both leaders emphasized that this FTA would help enhance trade, investment, innovation, and shared opportunities between the two countries.

Negotiations for the trade deal started during New Zealand Prime Minister Christopher Luxon’s visit to India in March 2025, with both sides positioning the pact as a major step towards deepening bilateral economic ties. The agreement is expected to significantly enhance the economic engagement, improve market access, encourage investment flows and strengthen strategic cooperation between the two countries. It is also projected to create new opportunities for innovators, entrepreneurs, farmers, MSMEs, students and youth across a wide range of sectors.

India has not provided any import duty concessions in its dairy sector for New Zealand under the bilateral free trade agreement, an official said on Monday (December 22, 2025).

The dairy sector is completely red-handed for us. “No duty concessions under the Pat in the sector,” the official side said.

India has always resisted opening the door to bulk dairy imports in all of its earlier pacts.

Dairy has long been the most sensitive and politically charged issue in negotiations.

New Zealand is one of the world’s largest dairy exporters, whereas India is home to millions of small dairy farmers for whom market protection is a red-line issue. In practice, however, current trade is minimal.

New Zealand’s dairy exports to India in FY2025 totaled only $1.07 million, consisting of milk and cream ($0.40 million), natural honey ($0.32 million), mozzarella cheese ($0.18 million), butter ($0.09 million) and skimmed milk ($0.08 million).

Indian Prime Minister Narendra Modi greets visiting New Zealand Prime Minister Christopher Luxon prior to their meeting in New Delhi

India and New Zealand concluded a free-trade agreement on Monday, the third such pact New Delhi has reached this year, even as talks with the US and European Union drag on. The landmark agreement – ​​reached in “record nine months – ensures deeper investment flows, numerous opportunities for innovators, entrepreneurs, farmers, MSMEs, students and youth, Prime Minister Narendra Modi said on X.

The move comes as New Delhi accelerates efforts to diversify export destinations as part of a wider strategy to offset the impact of steep US import tariffs, which is India’s largest export market. A formal signing of the agreement is expected in the first quarter of next year after legal scrubbing of the negotiated text, India’s chief negotiator Petal Dhillon told reporters.

The “historic deal” ensures New Delhi zero-duty-export access for all its goods to New Zealand while Wellington would get duty concessions and market access for about 70% of New Delhi’s tariff lines, covering 95% of its exports in a phased manner, Indian officials said. While the Oceanic country will be tariff-free or subject to sharply reduced duties on products ranging from forestry and timber to sheep meat and infant formula, India has stopped short of opening its sensitive dairy sector to New Zealand, which is the world’s largest dairy exporter. Instead, New Delhi has offered to consult on extending similar treatment if it grants dairy access to comparable countries in the future, the statement said. India’s trade talks with Washington have been held up over access to dairy and other farm goods, as per Bloomberg News.

Top sectors to benefit in India

Major sectors which will gain from tax free exports include textiles, apparel, engineering goods, leather and footwear, and marine products. For New Zealand, major gains will be in horticulture, wood exports, coal, and sheep wool and meat, among others.

New Zealand has committed investments worth $20 billion in India over a period of 15 years as part of the agreement, said India’s Trade Ministry. Dairy imports such as milk, cream, whey, yogurt, and cheese, along with animal and vegetable products, including goat meat, onions and almonds, have been excluded from the deal by India due to “domestic sensitivities.”

India-New Zealand trade deal stood at $2.4 billion in 2024

The FTA, officials said, has a strong potential to double the bilateral trade between India and New Zealand, which currently remains modest compared to New Delhi’s bigger partners. At present, the two-way trade stands at $2.4 billion in 2024.

“Given the limited scale of bilateral trade, the agreement is less a trade breakthrough than a framework for deeper cooperation,” said trade analyst Ajay Srivastava, according to the Associated Press.

New Zealand Trade Minister Todd McClay said that the agreement gives the country access to markets that India has not provided to any other country. “New Zealand is the first country to secure any access for apples and honey to India in an FTA. We have secured the best access for kiwi fruit to India of any country in the world,” he said.

In a post on X, Commerce Minister Piyush Goyal said that the agreement creates new opportunities for India’s services sector, spanning IT & ITeS, finance, education, tourism, construction, and other areas. “New Zealand‘s first-ever annexes on health, traditional medicine, student mobility, and post-study work open up unprecedented avenues for Indian professionals and students. In addition, enhanced mobility provisions, including working holiday visas, post-study work pathways, and a dedicated quota of 5,000 temporary employment visas for skilled Indian professionals, will enable Indian talent to access better global opportunities,” he wrote.

For more such information, connect with us today: : www.globalmediaa.com