India–New Zealand FTA and Temporary Entry for Professionals

Introduction : The India and New Zealand Free Trade Agreement was signed on 27 April 2026 and entered into force on 20 October 2026. Most of the attention has gone to tariffs and to the new work visas that India has secured in New Zealand. The agreement also works the other way. It sets out how New Zealand professionals may be sent to India for business and service work, and that part will matter to any company planning a deployment this year.

This blog examines the five temporary entry routes available for deployment to India, and how businesses should structure secondments and service arrangements around them. It addresses visa categories, employer obligations and tax implications, and closes with a deployment checklist that companies can use to manage cross border talent mobility. A point worth stating early is that the agreement opens categories of entry. It does not replace Indian immigration, labour or tax law.

Legal Provisions

A. The Agreement: Five Entry Routes

Annex 8J of the Agreement records India's commitments on the temporary movement of natural persons from New Zealand. It creates five routes. Business visitors may enter for up to 180 days for meetings, negotiations and investment related activity, but must be paid from outside India and may not sell directly to the public or personally supply goods or services. Intra corporate transferees, who are managers, executives or specialists moved to an Indian branch, representative office or Indian company owned or controlled by the New Zealand company, may receive an initial stay of up to one year or the contract period, whichever is less, extendable to five years in total. Contractual service suppliers, who are employees of a New Zealand firm performing a contract with an Indian client, and independent professionals may stay for up to one year or the contract period, but only in listed sectors such as accounting, management consulting and tax advisory, with legal consultancy excluded. Installers and servicers may stay for three months or the contract period.

A spouse or dependent accompanying an intra corporate transferee, contractual service supplier or independent professional may stay for the same period if the principal's stay is twelve months or longer, but the Agreement gives no automatic right to work. These commitments also do not create visa free entry, since entry remains subject to Indian visa and immigration requirements.

B. Immigration and Social Security in India

Immigration and Foreigners Act, 2025 comes into effect from 1 September 2025. It outlines procedures for entry, registration, and reporting by employers. Running a business fall under B1 Business Visa, while employment and intra-company transfer fall under E1 Employment Visa, requiring sponsorship by employer registered in India and annual salary not less than $25,000. Any non-citizen having been in India for more than 180 days has to report to the Foreigners Regional Registration Office within 14 days after entry into India. In respect to provident fund for foreign workers, payments have to be made based on the total salary without any limitation in the wage unless the worker is exempted under a social security agreement.

C. Tax Provisions

Under Section 6 of the Income Tax Act, 2025, effective from 1 April 2026, an individual will be considered a resident of India if he is in India for 182 days or more during the tax year or for 60 days or more during the year and 365 days or more during the four years preceding that year. The India-New Zealand tax treaty, signed in 1986, provides an exemption for an employee who stays in India for 183 days or less in any consecutive twelve months if the employer is not a resident of India, provided there is one other condition concerning the cost. In relation to indirect taxes, an instruction has been issued by the Central Board of Indirect Taxes and Customs based on the Supreme Court’s secondment judgment in GST.

Legal Analysis

A. Matching the person to the route

The first incorrect approach involves selecting the route based on convenience. This categorization depends on the relations between the traveler, New Zealand business and its Indian counterpart. The employee of the company who is transferred to the Indian subsidiary is the intra corporate transferee. The employee who was sent to sign the contract with Indian client is the contractual service supplier, but he/she should be working in the specified area. If the sole practitioner signs the contract with the Indian customer he/she is the independent professional. The person who installs some equipment in India is the installer or servicer. The manager who travels to attend the negotiation is the business visitor, who cannot get paid in India or perform any manual job there.

Choosing the route of business visitors for people who will actually work in India is the most dangerous mistake, as the visa B1 is designed for business activities while the employment falls into the E1 category. It is also important to consider the duration, as the contractual service supplier can stay in the country for one year only, and for longer period another route should be selected.

B. Secondment or service arrangement

While the business refers to the relationship as a secondment or a service arrangement, the tax authority looks into the substance of the relationship. If it is a secondment, then the work will be directed by the Indian entity while the economic employment will be with the Indian entity. In case of a service arrangement, then the work shall be undertaken by the New Zealand entity.

This makes all the difference. According to the Supreme Court decision in Morgan Stanley, employees seconded to an affiliate in India were capable of forming a service permanent establishment if the enterprise retained responsibility for the work performed by them and the employees continued on the enterprise’s payroll or retained a lien on their employment, but stewardship activities were insufficient. In Northern Operating Systems, the Court considered the seconded employees who were still employed by the foreign company as supplied by it, and thus the Indian host had received a taxable manpower supply service from it. In the Centrica case, the Delhi High Court ruled that salary reimbursement of seconded employees was fees for technical services. The point here is not that secondment is risky. It is that a hybrid arrangement, in which an individual is paid and controlled in New Zealand and operates in India, can be characterized in different ways.

The following two models are cleaner. In the first one, the entity in India will hire the individual at their location, arrange for the visa, remunerate them, and pay the expenses while employment with the firm in New Zealand will be put on hold. The second model will involve the New Zealand company maintaining the individual on its payroll and then sending them to India as per a services contract with deliverables and fees. Both of the above models can work if there is consistency in the documentation and actions.

C. Employer obligations

Most of the responsibilities lie with the Indian company which sponsors the visa. It needs to ensure that the salary is high enough to qualify for the visa, register the individual within 14 days if the stay exceeds 180 days, maintain records of foreign employees for inspection, and also deduct tax from salary.

Provision for fund requires advance preparation. International employee is required to pay into the provident fund on his full salary, but this was challenged in the case of 2025 in the Delhi High Court while the Karnataka High Court had ruled that it was invalid; however, there was an exception depending upon the social security arrangement in the country of the employee.

D. Tax implications

Residence and treaty relief are the issues for the individual. An individual who remains in India for 182 days or satisfies the 60/365-day test becomes resident in the tax year and could face taxation of his/her income by India on a broader base of income. A maximum stay of 183 days in a 12-month period can be exempted from Indian tax liability under the treaty provided that it is paid for by a New Zealand employer and all other conditions are satisfied. The 180 days business visitors test and 183 days treaty test are two separate tests and satisfaction of one will not satisfy the other. The issues facing the company are permanent establishment, withholding on payment to New Zealand and GST on cross charges as shown in the following cases.

Case Laws

DIT v Morgan Stanley and Co Inc, (2007) 7 SCC 1: In this case, the Supreme Court has clearly differentiated between the term “stewardship” and “deputation.” It was held by the Supreme Court that the “stewardship” activities that are done only for the purpose of safeguarding the interest of the foreign business entity and ensuring quality are not considered as creating a Service PE in India. On the other hand, in case of the deputation of the employees, it would create a Service PE since there is control by the foreign business entity.

CC, CE and ST, Bangalore v Northern Operating Systems Pvt Ltd (2022): In this case, the Supreme Court held that the secondment of manpower from an affiliate in a foreign country to its Indian affiliate amounts to a taxable "manpower supply service". The Court relied upon the doctrine of substance over form. This means even though the host in India controls operations on a day-to-day basis, the true employer is the foreign corporation. This is because the manpower continues to be employed by the foreign company, the terms of employment match its policies, and the people can easily go back to their parent company in a global repatriation scheme.

Centrica India Offshore Pvt Ltd v. CIT, (2014) 364 ITR 336 (Del): The Delhi High Court held that remittance made abroad for reimbursement to a foreign entity in respect of secondment of personnel will be taxed as "fees for technical services" (FTS) since, despite being labeled otherwise, it can be seen from the substance of the matter that the foreign parent continues to be the actual employer because the initial employment agreement is never rescinded, and certain essential facilities such as worldwide social security arrangements continue to be linked to the parent.

Practical Implications

For New Zealand Businesses: The FTA is about certainty, not compliance. Although it outlines structures and timelines for visa application process, all visa applications, payroll structures, and taxation are done as per the rules of India. It is crucial that both the appropriate visa pathway and business structure be selected appropriately to avoid consulate delay and tax investigations.

For Indian Companies: Having talent in India will be about tax and employment rather than a straightforward process of migration. Planning must be done with a view to accounting for the Provident Fund tax, tax deduction, and cross charges for GST.

The Problem with Policy: The government has not yet charted out the above-mentioned FTA pathways as domestic sub-categories of visas. The need to follow rules concerning permissible service sector is key to consistent corporate documentation.

Conclusion

Five paths exist under the India-New Zealand FTA for sending staff to India, but the paths don’t determine the trip. The appropriate path depends on the nature of the relationship between the individual and the company, industry and time period. The appropriate structure depends on who controls the process and pays the costs, and the Indian courts have indicated that substance will prevail over form in any tax dispute.

The practical solution lies in planning ahead. A company which chooses the path, plans out the secondment or service contract in detail, fulfills the employment obligations and investigates the tax issues before the first plane departs will be able to send staff without problems. Guidance from the government about how the paths work in practice would help, but until then documentation is essential.

Author :- Moeera Shrivastav, in case of any query, contact us at Global Patent Filing or write back us via email at support@globalpatentfiling.com.

References

1. Free Trade Agreement between India and New Zealand (signed 27 April 2026, in force 20 October 2026), Annex 8J (India's Schedule of Specific Commitments on Temporary Movement of Natural Persons) (India and New Zealand).
2. India Briefing, Deploying Professionals to India Under the India New Zealand FTA: 5 Temporary Entry Routes (21 October 2026).
3. Immigration and Foreigners Act 2025 (India).
4. Bureau of Immigration, Ministry of Home Affairs (India), list of visa categories; India Briefing (n 2) (reporting the employment visa salary threshold and registration requirements).
5. Employees Provident Fund Scheme 1952, para 83 (India); Lakshmikumaran and Sridharan, EPF Scheme, 2026 and International Workers: New Framework, Old Questions (18 September 2026).
6. Income Tax Act 2025, s 6 (India).
7. Agreement between India and New Zealand for the Avoidance of Double Taxation (in force 3 December 1986), art 15.
8. Central Board of Indirect Taxes and Customs, Instruction on the Supreme Court judgment in Northern Operating Systems Pvt Ltd (13 December 2023) (India).
9. DIT v Morgan Stanley and Co Inc (2007) 7 SCC 1 (India).
10. CC, CE and ST, Bangalore v Northern Operating Systems Pvt Ltd Civil Appeal Nos 2289 to 2293 of 2021 (SC, 19 May 2022) (India).
11. Centrica India Offshore Pvt Ltd v CIT (2014) 364 ITR 336 (Del) (India).
12. SpiceJet Ltd v Union of India W.P.(C) 2941/2012 (Del HC, 4 November 2025) (India).