Labour to support India free trade agreement
Thursday, 23 April 2026
Chris Hipkins has announced that Labour will support the free trade agreement with India.
“This morning I have written to the Prime Minister to confirm that the Labour Party will support the legislation enabling the India free trade agreement to come into force,” he told reporters at Parliament on Thursday.
“In our discussions with the Government, they have made a number of commitments - including speeding up the visa processing time for those workers in New Zealand seeking to change employer.”
The free trade agreement, finalised with India in December and due to be signed on Monday, has been the subject of much back-and-forth between Labour and the Government.
National and ACT need Labour’s support to pass the necessary laws to ratify it, because New Zealand First does not support the deal.
NZ First leader Winston Peters said Labour’s embrace of the deal was “a disgraceful sellout of our country’s future,” while ACT leader David Seymour praised Labour, and said the party was “putting New Zealand first”.
Earlier this week, Hipkins told Stuff that signing the agreement without shoring up majority support in Parliament first “would be recklessly irresponsible”.
Now, the discussions seem to have reached a conclusion, with the Labour Party achieving some concessions around immigration concerns.
These include commitments from the Government to:
Provide Budget funding for at least 14 additional staff in the labour inspectorate focused on migrant worker exploitation and serious and complex immigration offending.
Speed up the processing of Variation of Condition for those visa holders seeking to change employer.
Prioritise the Modern Slavery Bill, ensuring it passes its first reading before the election, while also resourcing Community Law to provide legal advice.
The other major sticking point for Labour was a commitment to increase private sector investment by US$20 billion over 15 years.
Trade Minister Todd McLay has said the provision “doesn’t require us to invest in India. It requires us to promote investment.”
But Labour’s trade spokesperson, Damien O’Connor, told Stuff on Tuesday that his concerns lay in how India would define “promote investment”. Because if that condition wasn’t met, India would have the option to renegotiate the deal in 15 years.
On Thursday morning, Hipkins said he still thinks it is “a very unrealistic target”.
“I think it is almost impossible for New Zealand to even meet that target, and that is one of the things our exporters will need to be aware of,” he said.
“India have reserved the right to claw back the concessions they granted New Zealand in the event that New Zealand businesses don't invest US$20 billion in India. New Zealand businesses won't do that, and so they need to be aware that there is still a risk.”
He advised exporters to “do their own due diligence” and make commercial decisions that acknowledge they could have some market access revoked in 15 years.
The context
Passing a free trade agreement with India was dubbed a “major strategic priority” for the National Party during the 2023 election campaign.
According to the Government, it’s a big deal. India is the fourth biggest economy in the world, accounting for more than 11% of global GDP.
It’s so important to exporters that BusinessNZ and 28 other organisations published an open letter last week calling for political parties to get it over the line.
“The reduction in barriers secured in this FTA will directly benefit sectors such as horticulture, sheep meat, seafood, wine, honey, wood products, seeds and natural fibres, machinery, digital technology, and services, unlocking new opportunities for growth,” they wrote.
But the negotiations with Labour have been fraught. As recently as Tuesday, O’Connor told Stuff they were still “awaiting a little bit more information, which the Government’s been a bit tardy in providing.”
McLay said that same day that the ball was in Labour’s court.
“All the information they’ve asked for has been made available to them,” he said. They’ve had substantive responses to all of their letters. There have been more meetings I’ve had with their trade spokesman than possibly he has had with some of his colleagues. It’s for them to make their decision now.”
On Thursday, Hipkins said the Government had been “cavalier” in their approach.
“There generally has been bipartisanship around these deals. Unfortunately, that hasn’t been on display from the Government until basically right now,” he said.
“They didn’t engage with us when they were doing the negotiations. They didn’t engage with us constructively. Through the last four months, we’ve had to sort of drag the information out of them that we're seeking.”
NZ First comments ‘racist’, Hipkins said
Speaking to RNZ on Wednesday, finance minister Nicola Willis accused Labour of “playing into exactly the same concerns that NZ First is trying to whip up” around immigration.
NZ First deputy leader Shane Jones has been criticised for telling fringe online station, Reality Check Radio, last weekend that “I am never going to agree with a butter chicken tsunami coming to New Zealand”.
The Prime Minister, when asked whether this statement was racist on Monday, said it was “not acceptable”.
Two of his MPs - Willis and Carlos Cheung - later said it was racist.
Now, Hipkins has confirmed he does not share NZ First’s concerns.
“Those entering under the TEE visa could enter New Zealand already under the skilled migration pathway, so it's unlikely to increase the overall level of migration from India to New Zealand,” he said.
The TEE visa is a new temporary employment entry visa negotiated under the agreement, which will allow up Indian citizens working in 13 skilled occupations to work in New Zealand for three years. The visas will be capped at 5000 at any one time.
As for Jones’ comments, Hipkins called on the Prime Minister to act.
“I think what New Zealand First have been doing is downright racist. If you look at what Shane Jones has been saying, it’s utterly unacceptable. And bearing in mind that these are ministers in Christopher Luxon’s Government, he should do something about that,” he said.
NZ First, ACT, react
Winston Peters took to social media to respond to Labour’s announcement, saying the move was “madness”.
“The Labour Party and National Party have just sealed an FTA that means that our country MUST promote $33 billion in just 15 years into a foreign country and NOT into New Zealand,” he wrote.
“Labour themselves have said this FTA is ‘high risk’ because if we don’t meet that threshold to India’s satisfaction India will CLAW BACK whatever gains New Zealand thinks it has achieved.“
Peters described it as an “utter unmitigated disaster of an agreement for New Zealand’s future”.
He also called out the visa provisions, calling the agreement “a free migration deal”.
It is clear now that NZ First is the only party that cares about our own country and the only party that puts New Zealand and New Zealanders first.“
ACT Party leader David Seymour also took to social media, and employed a bit of word play.
“Credit where it’s due to Chris Hipkins and the Labour Party. Supporting the India Free Trade Agreement instead of playing election year politics really is putting New Zealand first,” he wrote.
“Yes, people have legitimate concerns about immigration, and ACT will address those before we go to the polls. However, the Visas under this agreement amount to six per cent of those issued to Indian nationals, AND we can always change our policy for the other 94%.”