Zero tariffs, cheaper inputs, and supply-chain access give India’s electronics sector a structural edge, though gains will build gradually.
India and New Zealand have signed a comprehensive Free Trade Agreement that directly impacts India’s electronics ecosystem, be it the large manufacturers or the MSMEs, EMS players, and component suppliers.
The FTA removes tariffs of up to 5 per cent on all the Indian electronics and electrical machinery exports. The waiver will also cover finished goods, industrial electronics, and key sub-segments like components and assemblies.
FTA also ensures duty-free access to critical inputs such as metal scrap and industrial raw materials, alongside regulatory simplification and faster customs processes.
The agreement was signed on April 27, 2026, and the government claims it is a ‘fast-track negotiation’ because it was completed in just nine months.
The benefits will be visible across India’s major electronics clusters like Noida (NCR), Bengaluru, Sriperumbudur (Tamil Nadu), and Pune.
Exports will gain access to New Zealand and, more importantly, will act like a gateway into the broader Oceania market.
India’s electronics exports to New Zealand currently stand at just $68 million, compared to over $77 billion globally, indicating significant untapped potential. The FTA aims to improve competitiveness, reduce production costs, and position India as a reliable alternative in global electronics supply chains.
The agreement works on multiple levels, such as giving Zero-duty access to Indian products so that they are more price competitive in a high-income import market.
At the same time, duty-free inputs lower manufacturing costs, particularly for component-level production such as PCBs, wiring systems, and sub-assemblies. Streamlined SPS/TBT norms and 48-hour cargo clearance reduce delays and compliance burdens, improving export efficiency.
Crucially, the FTA supports India’s shift from assembly-led manufacturing to value-added production, especially in components. This aligns with the broader China+1 strategy, where global firms are diversifying supply chains.
The agreement also strengthens MSMEs through export-readiness support and linkages with New Zealand’s SME ecosystem, helping smaller firms integrate into global trade flows.
The impact will not be immediate in terms of volumes, given the limited size of the New Zealand market. However, market diversification, cost efficiency, and long-term supply-chain positioning will show us the real value and impact.
For India’s electronics sector, this FTA may build a globally competitive manufacturing base.
