India–New Zealand FTA From 20 October: Customs Duty Cuts, TRQs and Rules of Origin

The India–New Zealand Free Trade Agreement enters into force on Tuesday, 20 October 2026, the date Commerce and Industry Minister Piyush Goyal and New Zealand's Trade Minister Todd McClay fixed in the Ministry of Commerce and Industry's press release of 21 September 2026. On the Indian side the agreement now has its operating documents. Notification No. 32/2026-Customs dated 16 October 2026 (G.S.R. 899(E)) sets the preferential duty rates; Notification No. 82/2026-Customs (N.T.) dated 12 October 2026 (G.S.R. 878(E)) notifies the Customs Tariff (Determination of Origin of Goods under the Free Trade Agreement between India and New Zealand) Rules, 2026; and DGFT Public Notice No. 33/2026-27 dated 17 October 2026 writes the tariff rate quota procedure into paragraph 2.92 and Appendix 2A of the Handbook of Procedures, 2023. All three take effect on the same day.

For a bill of entry filed from 20 October, three things change at once. A New Zealand-origin consignment can claim a lower rate under Notification 32/2026-Customs, the claim has to be backed by a proof of origin issued under the 2026 Rules, and four agricultural products can enter only against a DGFT quota authorisation. The agreement was signed in New Delhi on 27 April 2026, the New Zealand Parliament passed its implementing legislation on 16 September 2026, and bilateral merchandise trade was about US$1.1 billion in 2025-26.

What Notification 32/2026-Customs changes for imports from New Zealand

The notification is issued under section 25(1) of the Customs Act, 1962 and works through four tables. Table I lists more than 1,100 tariff lines with a capped rate of basic customs duty, Agriculture Infrastructure and Development Cess and Health Cess; in the entries the AIDC and Health Cess columns read nil throughout, so the concession is carried entirely in the BCD column. Sheep meat of heading 0204 enters at nil BCD from day one. Coking coal of 27011210 is capped at 2 per cent, while lines such as 03011100 at 25.71 per cent and 16010000 at 85.71 per cent show the fractional first step of a phased reduction rather than a final rate.

The Ministry of Commerce's FAQs on the India–New Zealand FTA set out the structure. India gives concessions on 70.03 per cent of its tariff lines, covering about 95 per cent of bilateral trade value. Roughly 30 per cent of lines become duty-free immediately, among them wood, wool, sheep meat and raw hides; 35.6 per cent are phased down over three to ten years, including petroleum oils, malt extracts, vegetable oils, peptones and selected electrical and mechanical machinery; 4.37 per cent get a partial reduction, including wine, pharmaceuticals, polymers, aluminium and articles of iron and steel; and 0.06 per cent sit under tariff rate quotas. The remaining 29.97 per cent of lines are excluded altogether: dairy, most animal products other than sheep meat, onions, chana, peas, corn, almonds, sugar, fats and oils, arms and ammunition, gems and jewellery, copper and aluminium articles. Imports under those headings continue at the MFN rate whatever the origin.

Table II deals with wine and ties the concession to the CIF value of a 750 ml container: BCD is 20 per cent in both bands, with AIDC at 75 per cent where the CIF value is US$5 or more but below US$15, and 50 per cent where it is US$15 or more. CIF value for this purpose means the assessable value under section 14 of the Customs Act. Table III covers kiwifruit of 08105000 at a CIF value of US$2.50 per kg or more, which attracts 15 per cent BCD and nil AIDC, and Mānuka honey of 04090000 at US$30 per kg or more, which attracts 51 per cent BCD and nil AIDC and must travel with a certificate from New Zealand's Ministry for Primary Industries confirming that the product is Mānuka honey. Table IV holds the quota goods: Mānuka honey priced between US$20 and US$30 per kg, with an initial quota of 40 metric tonnes at 51 per cent in-quota BCD, and albumins of 35021100, 35021900, 35022000 and 35029000 with an initial quota of 200 metric tonnes.

Every table carries the same proviso: the importer must prove to the satisfaction of the Deputy or Assistant Commissioner of Customs that the goods originate in New Zealand under the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 and the origin rules notified for this agreement. Quota goods additionally need a DGFT authorisation showing the importer's name and address, IEC, the notification number, the tariff item, the authorised quantity and the validity period, and clearance is allowed only after the quantity has been debited electronically in the Indian Customs EDI System.

Tariff rate quotas under DGFT Public Notice 33/2026-27

The public notice inserts the quota schedule and procedure into the Annexure to Appendix 2A. Quota Year 1 runs from 20 October to 31 December 2026; every later quota year is the calendar year. Apples and kiwifruit have no quota at all in Year 1, so the first consignments under those headings can arrive only in the April 2027 window. The schedule below sets out the quantities and conditions as notified.

Allocation starts on the New Zealand side. Its competent authority issues export certificates to exporters or producers, each naming the item, the permitted quantity and the designated Indian importer, and shares the details with DGFT quarterly or on another agreed schedule. The Indian importer then applies on the DGFT portal under Services, Import Management System, Tariff Rate Quota, Apply for TRQ, quoting the New Zealand export certificate or allocation. DGFT issues the authorisation without further delay, transmits it electronically to ICES, and keeps a running tally so that no authorisation issues once the year's quota is exhausted. The application records whether the importer is a registered MSME, for monitoring under the agreement. An authorisation is valid only for the quota year in which it is issued and only within the product's import window, and any unused quantity lapses on expiry; nothing carries forward.

Rules of origin: what a preferential claim must show from 20 October

The 2026 Rules add agreement-specific tests, in 34 rules and three annexures, on top of the procedural requirements of CAROTAR, 2020. Goods qualify under Rule 3 if they are wholly obtained or produced in India or New Zealand, or if they meet the product-specific rule in Annexure A, which for each HS line prescribes a wholly-obtained requirement, a change in tariff classification at chapter, heading or sub-heading level, a qualifying value content, or a specified process. Only bilateral cumulation is allowed under Rule 5; inputs from a third country never count as originating. Rule 8 lists operations that cannot confer origin on their own, such as preservation, packaging, labelling, simple assembly and simple mixing.

Rule 6 gives two ways to compute qualifying value content. Build-down takes the FOB value, deducts the value of non-originating materials, and expresses the result as a percentage of FOB value. Build-up expresses the value of originating materials as a percentage of FOB value. The percentages in Annexure A are written for the build-down method; where an exporter chooses build-up, the threshold is 10 percentage points lower, except for Chapter 71 goods, where the same percentage applies under either method. Rule 9 adds a de minimis tolerance: non-originating materials that fail a tariff-change rule are ignored up to 10 per cent of FOB value for goods outside Chapters 50 to 63, up to 10 per cent of total weight or value for textiles and clothing in those chapters, and up to 1 per cent for goods claimed as wholly obtained.

Illustration: a New Zealand producer ships machinery parts to an Indian buyer at an FOB value of US$10,000, of which US$5,500 is the value of materials sourced outside India and New Zealand. Under build-down the QVC is (10,000 minus 5,500) divided by 10,000, which is 45 per cent. If Annexure A sets a 40 per cent build-down threshold for that line, the goods qualify. The same producer could instead show originating materials worth US$3,200; under build-up the QVC is 3,200 divided by 10,000, which is 32 per cent, against a threshold of 40 less 10, or 30 per cent, so the goods qualify by that route as well. The thresholds in this example are assumed; the actual figure for any line is in Annexure A.

Proof of origin under Rule 16 is either a certificate of origin from an issuing authority or an origin declaration. The declaration route is open to Indian status holders and New Zealand approved exporters from day one; declarations by other exporters and producers are subject to a review that begins five years after entry into force. Whichever form is used, it must be in English, carry a unique number, state that the goods are originating, and follow Annexure B for certificates or Annexure C for declarations. It is valid for 12 months from issue or completion and must exist at or before importation; retrospective issue is allowed in exceptional cases within 12 months of import and must be marked "ISSUED RETROSPECTIVELY" with an explanation. Rule 18 lets the commercial invoice come from a third-country entity without losing the preference, a point that matters for trading-house shipments routed through Singapore or Dubai. Rule 15 keeps origin intact for goods that transit a non-party if they stay under customs control and undergo nothing beyond unloading, reloading, storage, repacking, relabelling, splitting or preservation; on request the importer shows the bill of lading, airway bill or a non-manipulation certificate.

Rule 22 puts the burden on the importer at the time of the declaration: declare that the goods are originating, hold a valid proof of origin, produce it on request and, where asked, prove compliance with Rule 15. A claim made without the proof can be refused or allowed against a guarantee. Rule 25 is the fallback for shipments that cleared at the MFN rate: a claim for preferential treatment and refund of the excess can be filed within 12 months of importation, with the proof of origin and supporting documents. Rule 23 fixes record retention at five years from the proof of origin for exporters, producers, approved exporters, status holders and issuing bodies, and five years from importation for importers, with the original proof kept in hard copy. Rule 30 makes separate provision for goods already in transport or storage on 20 October; importers with consignments on the water should read it before filing.

Verification under Rule 26 can start at import or after release, on risk assessment, random selection or reasonable doubt. The exporting authority has 30 days to confirm the authenticity of a certificate and 60 days, extendable by 30, to answer on the accuracy of the origin determination; a verification visit must be requested within 30 days of receiving that information and completed, with a written determination, within six months. Goods can be released during verification against duty or security. An adverse finding gives the exporter or producer 30 days to comment before the final determination. Rule 31 bars rejection of a proof of origin for spelling, typing or formatting errors that cast no doubt on origin, and Rule 28 allows preference to be suspended for persistent or deliberate misrepresentation.

Exporters to New Zealand and the dates still to come

On the New Zealand side every tariff line becomes duty-free on entry into force, removing peak tariffs of up to 10 per cent on textiles and apparel, leather and footwear, gems and jewellery, engineering goods and processed foods. Indian exporters need the same proof of origin in reverse: a certificate from the notified issuing authority, or an origin declaration if the exporter is a status holder. The FAQs also record a bilateral safeguard that can run for two years, extendable by one, within a 14-year window after a product's duty cut, with provisional measures of up to 200 days in critical circumstances.

Three dates follow 20 October. The Joint Commission that oversees the agreement meets within one year of entry into force and then every two years, and the general review runs on the same cycle. The first apple and kiwifruit quota windows open on 1 April 2027 against the Year 2 quantities. And the electronic exchange of origin information between the two customs administrations, which Rule 34 requires within 12 months of entry into force, will decide how quickly declarations rather than certificates become the normal proof.

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