New Zealand’s long-awaited free trade agreement with India will be signed in New Delhi next Monday, triggering the immediate elimination of tariffs on 95 per cent of the country’s timber, lumber, pulp and paperboard exports into one of the world’s fastest-growing markets. That is according to Todd McClay, New Zealand’s Minister of Trade and Investment, who today confirmed that the legal verification had been completed ahead of next week’s ceremony.
Speaking to reporters in Wellington, McClay said the agreement would allow New Zealand businesses “to compete on equal footing” in one of the world’s fastest-growing economies, after years of watching Australian and other rivals trade into India at lower duties.
Under the Comprehensive Free Trade Agreement (dubbed the CFTA), duties of between 5.5 and 11 per cent currently applied to most New Zealand wood products will be wiped out on day one for the bulk of timber and lumber lines, with the residual 5 per cent of tariffed goods phased out across a seven-year window. Almost 57 per cent of all New Zealand exports will become duty-free from the moment the agreement enters into force, rising to 82 per cent when fully implemented.
The signing comes after Wood Central reported that the Wood Processors and Manufacturers Association of New Zealand (WPMA) had written to all political parties, urging cross-party ratification, warning that hesitation in Parliament risked stalling the most significant forestry trade breakthrough in a generation.
Mark Ross, CEO of the WPMA, said the stakes for the wood processing sector could not be higher, pointing to years of stalled commercial engagement with a market forecast to become one of the largest consumers of wood products globally in the coming decade. “This Free Trade Agreement presents significant opportunities for New Zealand wood processors and manufacturers,” Ross said.
Tariff elimination applies across Harmonised System Codes 44 (Wood and Articles of Wood), 47 (Pulp of Wood) and 48 (Paperboard), covering the overwhelming bulk of New Zealand’s processed wood exports, with the removal of duties finally levelling the playing field against Australia, which has enjoyed preferential Indian access since 2022.
Is the government playing politics with trade policy?
Labour leader Chris Hipkins has accused the Government of playing politics with trade policy. “Signing a free trade agreement without majority backing would be recklessly irresponsible,” Hipkins said, calling on the Government to secure opposition backing before committing to the New Delhi ceremony.
Meanwhile, NZ First leader Winston Peters, who invoked the coalition’s agree-to-disagree provision before the deal was finalised, labelled business community support for the agreement “breathtaking” and compared backing the deal to signing a contract blindfolded, with his party continuing to withhold support over skilled-worker immigration provisions.
McClay, however, rejected the characterisation, defending the visa pathway, which captures an average of 1,667 three-year non-renewable work permits per year, targeting priority Green List shortages in medicine, nursing, teaching, ICT and engineering, as tightly constrained and necessary to service genuine skill gaps in the New Zealand economy.
New Zealand’s previous attempt to conclude a free trade agreement with India collapsed in 2014–15, and a bilateral methyl bromide fumigation dispute subsequently drove radiata pine trade from a peak of NZ$326 million in 2019 to just NZ$9.5 million in 2023, a near-total market collapse that left exporters heavily exposed to Chinese demand cycles. Trade has since recovered to NZ$76.5 million as of last year, with the WPMA warning that only tariff certainty under the CFTA will unlock the long-term commercial pipelines needed to meaningfully diversify the sector’s export base away from China.
McClay said the government’s projections point to tens of millions of dollars in additional export earnings once the agreement takes effect, with bilateral merchandise trade forecast to more than triple from NZD $2.23 billion to NZD $8.57 billion within five years of entry into force.
Please note: The cross-party support the WPMA had pressed for produced a signed agreement on 27 April 2026, with Trade Minister Todd McClay and Commerce Minister Piyush Goyal placing their names on the 1,364-page text in New Delhi in front of Prime Minister Christopher Luxon, as Wood Central reported. Indian duties of between 5.5 and 11 per cent on most New Zealand wood lines now fall away on day one, with the WPMA singling out the Labour Party for the cross-bench cover that allowed enabling legislation to advance.
