Sub: India – New Zealand Free Trade Agreement

Dear Sir / Madam,

As you are aware, India has signed a landmark Free Trade Agreement (FTA) with New Zealand, opening significant opportunities for the Indian textile industry, particularly Manmade Fibre Textiles and Technical Textiles.

The key highlights and benefits of the Agreement for exporters are summarized below:

1. Key Highlights of the FTA

• 100% Duty-Free Access: The FTA eliminates duty on 100% of Indian exports, ensuring zero-duty market access (earlier tariffs up to 10%).
• Gateway to New Markets: Provides access to the wider Oceania and Pacific Island markets, enhancing export diversification.
• Investment Commitment: A USD 20 billion investment commitment over 15 years strengthens long-term economic and strategic cooperation.
• Focus on MSMEs & Women-led Enterprises: Special emphasis on strengthening MSMEs, start-ups, and enterprises owned by women and youth.
• Boost to Labour-Intensive Sectors: Significant gains for sectors such as textiles, apparel, leather, footwear, and related industries.

2. Enhanced Market Access

• Reduced trade barriers and regulatory certainty will strengthen Indian manufacturing and global value chain integration for MSMEs in textiles, apparel, engineering goods, chemicals, food processing, and electronics.
• Structured cooperation for MSMEs includes enhanced access to trade-related information, export readiness programmes, and linkages with New Zealand's SME ecosystem, with specific focus on start-ups and enterprises owned by women and youth.

3. Investment & Economic Cooperation

• FDI Commitment: New Zealand will invest USD 20 billion in India, strengthening long-term economic ties.
• Joint strategies to promote investment, research and innovation, technology flows, and skill development, particularly in renewable energy, digital services, and modern infrastructure, are fully covered.

4. Trade Facilitation & Regulatory Provisions

1. Product Specific Rules of Origin (PSRs): Agreement provides for a balanced and robust framework of Product Specific Rules of Origin (PSRs) for effectively prevent circumvention, misuse, or falsification of Rules of Origin criteria.
2. Customs & Trade Facilitation: The FTA incorporates a comprehensive set of trade facilitation measures which include standard cargo clearance within 48 hours, with express shipments and perishable goods to be cleared within 24 hours. The Agreement also provides for Authorised Economic Operators, automation, and paperless single-window clearance systems. This modernizes customs procedures to ensure predictability, transparency and consistency in trade between trade partners.

5. Sectoral Opportunities – Textiles & Clothing

India’s textile exports have shown steady growth, increasing from USD 34.8 billion in 2023–24 to USD 36.9 billion in 2024–25, reflecting a growth of 6.1%, while exports to New Zealand also rose from USD 98.14 million to USD 103.14 million during the same period. With New Zealand importing textiles and clothing worth around USD 2.2 billion annually, there exists significant export potential for India. Earlier tariffs of up to 10% have now been fully eliminated under the FTA, providing zero-duty market access and enhancing the price competitiveness of Indian textile products in the New Zealand market.

6. State-wise Opportunities in Textiles

1. Tamil Nadu -The removal of tariffs ranging from 8–10% is expected to result in major gains for the state, particularly benefiting key textile clusters such as Tiruppur and Coimbatore.
2.  Rajasthan- Tariff elimination will drive export growth from Jaipur-based textile clusters, improving competitiveness in niche global markets due to tariff removal.
3. Bihar (Bhagalpuri Silk)- Reduction in tariffs is expected to boost exports of Bhagalpuri silk and related textile products. This will enable expansion into premium international markets, enhance income for MSMEs and rural artisans, and contribute to diversification of the export basket.

This is for your kind information.

Members are encouraged to explore the New Zealand market and take advantage of zero-duty access to increase textile exports. This is a good opportunity to diversify into new markets and improve competitiveness.

In case you need any further clarification or guidance, please get in touch with us.

Thanking You

A. Ravi Kumar
Executive Director