Ninety-five per cent of wood products traded into India under the historic New Zealand–India Comprehensive Free Trade Agreement (CFTA) will have tariffs scrapped, with the deal to be signed on April 24 in New Delhi.
The agreement delivers immediate tariff‑free access for most New Zealand timber, lumber, pulp and paperboard exports, positioning the sector to tap into one of the world’s fastest‑growing wood markets. New Zealand has committed to facilitating USD $20 billion in long-term investment into India over a 15-year period, with that commitment expected to support manufacturing, infrastructure development, innovation, and employment generation.
Addressing the media in December, Prime Minister Christopher Luxon hailed the deal as a “landmark moment” for NZ, emphasising the speed and intensity of the negotiations: “I am delighted that, just nine months after Prime Minister Modi and I launched negotiations on this deal during my visit to India, Trade Minister Todd McClay and his counterpart Piyush Goyal have delivered,” he said.
According to Todd McClay, NZ’s Trade, Investment (and Agriculture) Minister, the agreement represents a breakthrough for exporters. “This once‑in‑a‑generation agreement creates opportunities New Zealand exporters have never had in India,” he said. “The agreement eliminates and reduces tariffs on 95 per cent of New Zealand’s exports, with almost 57 per cent being duty‑free from day one and increasing to 82 per cent when fully implemented.”
Finally, a level playing field for NZ wood exporters.
For the wood processing sector, the deal finally levels the playing field with competitors such as Australia, which already enjoys preferential access. Current tariffs on most New Zealand wood products range from 5.5 to 11 per cent, with the remaining 5 per cent to be phased out over seven years — a shift industry leaders say will unlock long‑stalled opportunities. The deal also aims to double bilateral trade to USD $5 billion over the next five years, with bilateral merchandise trade currently standing at USD $1.3 billion in 2024–25.
WPMA Chief Executive Mark Ross said tariff removal opens the door to growth: “India is set to become one of the largest consumers of wood globally. Eliminating tariffs on over 95 per cent of timber, lumber and derivative products presents a major opportunity for New Zealand processors and manufacturers,” he said.
Wood Central understands that the tariff elimination applies across Harmonised System Codes 44 (Wood and Articles of Wood), 47 (Pulp of Wood) and 48 (Paperboard), covering the bulk of New Zealand’s processed wood exports. India’s manufacturing sector will also benefit from duty-free access to key inputs, including wooden logs, in return for New Zealand receiving zero-duty market access on 100 per cent of its tariff lines for Indian exports.
To fully capitalise on the agreement, Ross said the industry will need to work with the government to fully market the performance and sustainability credentials of New Zealand Radiata Pine. And that includes telling New Zealand’s plantation forestry story and showcasing the breadth of high‑value processed outputs — from engineered wood and panels to pulp and remanufactured products.
India’s booming demand is fueling the global timber trade.
Indian demand for softwood has risen rapidly in recent years, driven by a growing middle class, timber shortages, greater environmental awareness, and higher disposable incomes. Whilst India has not issued a formal statement, officials have previously signalled a strong interest in expanding access to sustainably sourced softwood to support construction and manufacturing growth.
For now, Luxon said the agreement reflects a renewed commitment to strengthening ties with India — and the diplomatic effort behind it. “Since the election, Todd McClay has visited India seven times. The Foreign Minister has visited India twice. Earlier this year, I led New Zealand’s largest‑ever trade mission to India,” he said. “The result is a high‑quality trade agreement with a trusted partner that will deliver deep and lasting benefits for New Zealand.”
