Here’s everything we know, don’t know, or don’t know if we know, about the India FTA

Thursday, 12 February 2026

The year was 2023. Christopher Luxon and the National Party were on the campaign trail. They had a lot of priorities. But one of them - securing a free trade agreement with India - went beyond that. It was dubbed a “major strategic priority”.

Now, they’ve done it. The Government announced in December that negotiations had concluded and it had signed an “agreement in principle”.

There are a few hurdles to jump through - the agreement is going through a process of “legal scrubbing” before both parties sign a final version.

Parliamentary support will then be needed to pass the necessary laws to ratify it, and coalition partner NZ First has made it clear it doesn’t support it. That means the National and ACT parties need Labour’s backing.

While Labour debates, speculation is flying about what the Government has and has not committed New Zealand to. The text has not been released to the public, and the Labour and NZ First teams only received it in recent days.

According to former diplomat and international trade expert Stephen Jacobi, it is normal to keep a deal under wraps until the final version has been signed. But with various claims, counterclaims and accusations of lying coming from government ministers, there’s a lot of information out there already.

So, here’s everything we do know, don’t know, or don’t know if we know, about the India FTA.

We know: It’s a big deal

The first thing we know is that signing an FTA with India is a big deal. India is the fourth biggest economy in the world, accounting for more than 11% of global GDP.

Despite that, it is only New Zealand’s 12th largest export market, taking just 1.5% of our exports. So there’s a lot of room for growth, which rides on New Zealand ratifying this deal.

“With the US, India was one of the last two holdouts of our major partners [for an FTA],” Jacobi told Stuff. “We have an opportunity here, and we should grasp it. India is a country whose economic power is rising rapidly. This is a very valuable economic opportunity.”

We don’t know if we know: The detail on work visas

Immigration has become the key sticking point for Government partners with this FTA. According to Peters, NZ has agreed to provide Indian citizens with “far greater access” to work visas than Australia or the UK did in their FTAs. He alleges the Government has agreed to offer an unprecedented number of Indian citizens temporary work visas, at a time when the domestic labour market is struggling.

“This means 20,000 people in New Zealand at any one time under the new visa, which has been created exclusively for Indian citizens,” he said.

However, according to Trade Minister Todd McLay, the FTA “does not give anyone the right to come to New Zealand who doesn’t meet our current visa requirements. The only commitment is 1670 skilled workers we need in the economy.”

According to the Ministry of Foreign Affairs and Trade (MFAT) website, 1667 Indian citizens will be eligible to work in New Zealand for three years with a new temporary employment entry (TEE) visa. The number of visas will be capped at a maximum of 5000 at any point in time.

These TEE visas will be limited to 13 skilled occupations, drawn from Immigration NZ’s Green List of occupations that have a skills shortage, and “iconic” Indian occupations (like yoga, music, chefs and Ayurvedic practitioners).

As McClay explained to the foreign affairs select committee in January, New Zealand already offers temporary work visas for people who work in those areas, so long as they are proficient in English, have a job offer from an accredited employer, are in good health, of good conduct and have evidence of financial support.

These visas are no different, he said, except they guarantee 5000 spots at a time for Indian citizens.

Unlike other visas, they do not offer a pathway to residency. Workers on TEE visas will have to leave New Zealand after three years.

“No one under this agreement has a right to come to New Zealand under any condition other than the policy set by a current or future government,” he said, noting the agreement does not stop a future government from changing those conditions.

“Should 1667 Indians want to apply to come here to work in an area where we have a deficiency of skills, they have the ability to do so. But they must meet the normal criteria.”

So 1667, not 20,000. Where did Peters get that number from?

Under current rules, people who obtain a temporary work visa lasting more than a year have the ability to apply to bring their spouses and dependent children with them.

Using a traditional family of two parents and two children, those 5000 TEE visa-holders could mean 20,000 people, Peters said.

Speaking before the select committee, McClay said the TEE visas do not provide a right to bring family members to New Zealand, but also referenced those existing visa conditions.

His office later clarified that the TEE visas are not the same. While there are some work visas lasting longer than 12 months where you can bring family over, that is not the case with this new visa.

What we don’t know for sure if we know: Whether it caps student visas

The FTA will be good for Indian international students in New Zealand, with the agreement codifying their right to work up to 20 hours a week.

International students can actually work up to 25 hours a week, but this stops a future government dropping that below 20.

However, the real stoush here is whether the FTA prevents future governments from imposing a cap on the number of Indian international students who can come to New Zealand. There is no cap at present - but a government could impose one if it wanted.

According to a fact-sheet released by the Indian government, the agreement removes numerical caps on Indian students. But speaking in Parliament last week, McClay said it does not.

Peters disputed that and Chris Hipkins said the statement conflicted with some briefing notes he had received on the agreement.

And when asked to repeat the statement on Herald NOW on Tuesday, McClay would not.

He did say: “If you look at a trade agreement, what it does say is that you can’t discriminate against one party versus others around the world, but New Zealand doesn’t do that.

“In this sense, you’re right, we can’t discriminate against India.”

Basically, under the agreement, New Zealand could still impose a cap on student visas from all countries, including India, so long as it did not discriminate against India specifically, the Herald reported.

We know: We have agreed to invest US$20 billion over 15 years

This is a bit of something we know and something we don’t know.

We know the Government has agreed to increasing private sector investment by US$20 billion over 15 years. We don’t know how it intends to achieve that.

According to the MFAT website, New Zealand has agreed to “promote investment” with the aim of reaching US$20b, and India will establish a “New Zealand Investment Desk” to help us get there.

What MFAT’s website doesn’t say - but a fact-sheet released by the Indian government does - is that India has a “rebalancing clause”. According to Peters, this means India can reopen negotiations in 15 years if we don’t hit that $20b target.

New Zealand has described the investment figure as aspirational, while India appears to be treating it as conditional, the Indian Weekender reported.

Jacobi said he will be interested to see how this will be worded in the agreement text but, based on what he has heard, he has two concerns about it.

The first is the size of the investment commitment - which he called “extraordinary”. The second is the commitment of private sector money. The Government has essentially made an undertaking that it has no responsibility for delivering, he said.

“I feel rather uncomfortable about it. But maybe that’s what they needed to do to get the agreement.”

We know: All tariffs are removed for Indian exports, most are for NZ exports

When the Government announced it had reached an agreement in principle for this deal, it listed a number of key outcomes. These included:

• Tariff elimination or reduction on 95% of NZ’s exports.

• Duty-free access on almost 57% of New Zealand’s exports from day one, including sheep meat, wool, coal and most forestry and wood exports.

• Duty-free access will increase to 82% over 10 years, covering cherries, avocados, seafood and iron.

• The remaining 13% of exports will be subject to tariff cuts, like a 50% cut for apples, a reduction from 66% to 16.5% for  mānuka honey and 150% to 25-50% for wine.

• While most dairy is excluded - standard for FTAs with India - tariffs will reduce to zero for bulk infant formula and some high-value dairy  products over seven years.

Meanwhile, all goods exported from India to New Zealand will be tariff-free from day one, according to a fact-sheet released by the Indian government.

According to Jacobi, it is a good deal for New Zealand.

“It may not reach quite the level of comprehensiveness that we have seen with other agreements, but in the context of today, when we are facing a very uncertain environment in international trade, we need to be making deals where we can,” he said.

Plus, some provisions in the agreement could reap even more benefits for New Zealand in the future. With wine, for example, the agreement includes a “most favoured nation” clause. This means that if India negotiates lower tariffs with another country, they have to offer that to us as well.

Luckily for New Zealand, the EU already negotiated a 20% tariff for premium wines.

For dairy, if India agrees to a better deal with another country in future, they have to discuss that with us too.

All up, Jacobi feels confident it will be ratified.

“I don’t believe that Labour would be so foolish as to not agree to it,” he said.

CLARIFICATION: TEE visa holders do not have the same right as other temporary work visa holders to apply to bring family members with them, the minister’s office clarified, subsequent to the article’s initial publication.