India has taken a major step toward liberalising its tightly protected wine market, agreeing to slash tariffs on New Zealand wine by up to 83% over ten years under a newly signed free trade agreement, potentially transforming access to one of the world’s most difficult markets for imported wine.
Under the newly signed FTA agreement, New Zealand will eliminate tariffs on 100% of Indian exports. In return, India will remove or significantly reduce tariffs on 95% of goods imported from New Zealand, including wine.
India’s Commerce Minister Piyush Goyal welcomed Todd McClay to New Delhi ahead of the signing, describing the agreement as a milestone in bilateral relations.
“As we approach the India–New Zealand FTA signing on April 27, 2026, his visit marks a defining moment in our bilateral journey, reflecting the trust, shared values and common vision that underpin our partnership for sustainable economic growth and prosperity,” Goyal said.
Negotiations for the agreement began in March 2025 and concluded by December the same year, underscoring the speed at which the deal was reached.
According to the Indian government, India will provide market access covering 70.03% of tariff lines for New Zealand, with around 30% of tariffs eliminated immediately and the remainder phased out over time.
Wine Tariffs to Drop Sharply
In the wine category, tariffs on New Zealand wine will be reduced by approximately 66% to 83% over ten years from the agreement’s entry into force.
Given India’s current wine import tariffs of up to 150%, this reduction implies an effective tariff range of roughly 25% to 50% over time*.
This structure closely mirrors the framework established under the India–Australia Free Trade Agreement 2022, where tariffs on imported wine are also set to fall to between 25% and 50% within a decade.
Under India-Australia agreement, higher-end wines priced at CIF US$ 15 per 750ml or above will see tariffs reduced to 25% after ten years, while mid-range wines priced between US$ 5 and US$ 15 per bottle will fall to 50%. A similar tiered approach is expected to apply to New Zealand wines in the Indian market.
The agreement also includes a “most-favoured-nation” clause, meaning that if India offers more favourable tariff terms on wine to other FTA partners in the future, those terms will automatically apply to New Zealand.
A Market with Long-Term Potential
As the world’s most populous country and one of the fastest-growing economies in the G20, India surpassed Japan last year to become the world’s fourth-largest economy.
Projections suggest that by 2030, India could rise to the third-largest economy globally, with GDP reaching around USD 7 trillion and a middle class exceeding 700 million people—demographic shifts that could support long-term growth in wine consumption.
Despite this potential, New Zealand wine currently has a limited presence in India.
According to data from the Ministry of Commerce and Industry India, India imported 23,220 litres of wine from New Zealand in 2025, valued at US$ 210,000. By value, New Zealand ranked only 16th among India’s wine suppliers, accounting for approximately 0.73% of total imports.
However, early signs of growth are emerging. In 2025, the value of New Zealand wine imports rose 27.2% year-on-year, even as volumes declined by around 3%, suggesting a shift toward higher-priced products.
As tariff barriers gradually ease, New Zealand, known for its premium white wines, could see more sustained and predictable growth in the Indian market in the years ahead.
*150% × (1 − 66%) = 51%; 150% × (1 − 83%) = 25.5%
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