New Zealand’s Free Trade Agreement with Malaysia kicks in this month, and market watchers are playing up the opportunity for New Zealand business.

Malaysia has South East Asia’s second largest gross domestic product, and is forecast to grow 6.5% this year.

Export New Zealand executive director Catherine Beard says kiwi businesses should be looking at how to develop their Malaysian trade.

"This is more good news of course because it means that the tariffs are coming down and in fact 95% of current exports will be duty free as at August 1.

"We currently have $1b in exports to that country and the population is huge by New Zealand standards and quite a wealthy Asian country.

"If you look at the experience of China that improved significantly post-FTA. They've gone up to number two now in terms of exports, so it all bodes very well for Malaysia."

The FTA is expected to save $10m a year in duties over the next seven years.