New Zealand’s PM Luxon Seeks Support for India Trade Deal

The newly signed India-New Zealand Free Trade Agreement (FTA) is generating significant political activity in New Zealand as Prime Minister Christopher Luxon seeks bipartisan support for the deal. Signed by Indian Prime Minister Narendra Modi earlier this week, the agreement now requires passage through the New Zealand Parliament amid reservations from the coalition partner, New Zealand First.

The FTA proposes to offer thousands of temporary work visas annually for Indian professionals in the fields of IT, engineering, and healthcare. Additionally, Indian students are set to benefit from expanded post-study work opportunities and Working Holiday visas. Negotiations for this agreement resumed in March 2025 after nearly a decade-long hiatus, highlighting a renewed commitment to enhance bilateral trade.

India is also actively pursuing trade agreements with other countries, including the United States and the European Union, following recent deals with the UK and Oman. These negotiations signal India’s intention to diversify its export markets, particularly in the wake of increased tariffs on Indian imports imposed by the Trump administration. Notably, Indian Commerce Minister Piyush Goyal has reiterated that the dairy sector remains a non-negotiable aspect of trade discussions, reinforcing perceptions of India as protectionist.

Despite these challenges, the India-New Zealand FTA marks a shift in focus towards strengthening economic ties amid global uncertainties. However, New Zealand First leader Winston Peters has voiced strong opposition, arguing that the agreement compromises New Zealand’s interests, particularly concerning immigration and the dairy sector. Peters emphasized that the deal “gives too much away” and fails to provide adequate returns for New Zealanders, especially given the significance of dairy exports, which totaled $24 billion in the year to November 2025.

The discord over the FTA has created friction within the National-led government, prompting Luxon to seek support from opposition Labour MPs. Labour’s trade spokesperson Damien O’Connor has expressed a willingness to back the agreement, describing it as “worth supporting.” Meanwhile, the ACT Party, Luxon’s other coalition partner, has not opposed the deal, providing some reassurance for the Prime Minister as he navigates this political landscape.

The FTA’s implications extend beyond immediate trade benefits. The Ministry of Foreign Affairs and Trade (MFAT) has highlighted the importance of closer ties with India in advancing security and prosperity for New Zealand. With India’s GDP projected to reach approximately NZ $12 trillion by 2030, the potential economic impact of the FTA could grow significantly over time.

Looking ahead, the formal signing of the trade deal is expected in early 2026, with legislation unlikely to pass before the upcoming general election later that year. This timing could elevate the agreement as a key issue in the electoral campaign. Trade Minister Todd McClay has already labeled the deal as “historic,” a statement reflecting the government’s ambitions for enhanced trade relations.

The trade deal underscores a critical moment in New Zealand’s foreign policy, particularly given the previous Labour government’s cautious approach to negotiations with India. Luxon has positioned the FTA as a centerpiece of his administration’s agenda, asserting that he has actively engaged with Indian officials to foster a strong partnership.

As political discussions continue, the India-New Zealand FTA represents not only a potential economic boon but also a litmus test for coalition stability and public sentiment towards immigration and trade. All eyes will be on the Labour caucus meeting in the New Year, which could shape the future of this significant agreement.