New Zealand’s sawmilling sector is reporting a noticeable increase in enquiries from Indian timber buyers following the implementation of the newly signed Free Trade Agreement between New Zealand and India.
The early commercial response is being viewed as one of the first market signals generated by the bilateral agreement. Industry participants believe the deal could reshape long-term timber trade flows between the two countries.
According to the New Zealand Timber Industry Federation (NZTIF), member companies have experienced growing interest from Indian importers seeking sawn timber products. The federation represents New Zealand’s sawmilling and wood processing sector and has operated as the industry’s principal body since 1912.
The agreement between Wellington and New Delhi is valued at NZD$8.57 billion in projected bilateral trade activity. Import duties of up to 11 per cent on most timber product lines were removed immediately after the agreement entered into force.
The federation stated that the rise in enquiries reflects improving confidence within the bilateral trade corridor. However, it noted that enquiry growth should still be viewed as an early market indicator rather than confirmed export volume.
Interest has largely centred on sawn radiata pine. The species dominates New Zealand’s plantation forestry estate and already forms the foundation of the country’s timber trade with India.
Indian buyers are responding positively to the immediate tariff reductions. Duties ranging between 5.5 and 11 per cent were removed across most wood product categories from the first day of implementation.
The remaining tariffed categories are expected to be phased out over a seven-year transition period. Product classifications under HS Codes 44, 47 and 48 account for the majority of New Zealand’s processed timber exports to India. These categories include wood products, wood pulp, paper, and paperboard materials.
India is increasingly being viewed as a strategic growth market for New Zealand’s forestry and wood processing industries. Rapid urbanisation, rising construction activity, and expanding infrastructure investment are strengthening demand for imported timber products across the country.
Demand for sustainably sourced softwood is also increasing. This trend is being supported by India’s expanding middle-income population and growing focus on alternative construction materials.
The federation believes the agreement creates a major commercial opening for New Zealand processors. Industry leaders have described it as the most significant market access development for the sector in decades.
Long-term export growth will depend on sustained industry engagement and domestic processing capability. These factors are expected to determine whether the current rise in enquiries converts into stable trade volumes over time.
New Zealand’s timber trade relationship with India has experienced major volatility during the past decade. Earlier attempts to secure a bilateral trade agreement collapsed during 2014 and 2015.
Trade conditions were later disrupted further by a methyl bromide fumigation dispute between the two countries. As a result, radiata pine exports to India fell sharply after reaching NZD$326 million in 2019.
By 2023, timber trade volumes had declined to only NZD$9.5 million. However, diplomatic engagement and improved trade relations have since supported a gradual recovery.
Current bilateral timber trade has rebounded to approximately NZD$76.5 million. Under the newly implemented agreement, total merchandise trade between both countries is forecast to more than triple within five years.
Trade projections indicate bilateral goods trade could rise from NZD$2.23 billion to NZD$8.57 billion during that period.
The agreement was formally signed at Bharat Mandapam on 27 April by Todd McClay and Piyush Goyal.
The final document spans 1,364 pages and establishes the Comprehensive Free Trade Agreement framework between the two nations.
More than 95 per cent of New Zealand’s wood and forestry exports to India became tariff-free immediately following implementation. This has created stronger price competitiveness for New Zealand exporters within the Indian market.
The agreement was also supported strongly by the Wood Processors and Manufacturers Association of New Zealand. Before ratification, the association issued an open letter urging political parties to back the deal.
Industry representatives warned that delays could jeopardise a once-in-a-generation trade opportunity for New Zealand’s timber sector.
The federation said it would continue working alongside government agencies and member companies to maximise the agreement’s commercial potential. Early market activity is already creating optimism across the sector.
Attention is now turning towards India’s Kandla timber market, where New Zealand suppliers may gain a stronger competitive position against South American radiata pine exporters.
Under the revised tariff structure, demand for New Zealand logs in Kandla could increase by an estimated 80,000 JAS cubic metres each month.
Industry observers believe the agreement could significantly strengthen New Zealand’s position within the broader Asian timber supply chain over the coming years.
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