Speedy, secret deal with several fishhooks: 8 key takeaways of the India-NZ FTA

Wednesday, 6 May 2026

Professor Jane Kelsey is an Emeritus Professor of Law at Auckland University.

OPINION: When Prime Minister Christopher Luxon promised to deliver a free trade agreement (FTA) with India during this term of government, he gave away what little negotiating coin New Zealand has. The deal has been done (although not yet ratified) - but sensitive sectors, notably dairy, were excluded, and an utterly reckless commitment to invest tens of billions in India over 15 years will allow India to revoke tariff cuts and quotas when we can’t deliver.

Here are eight more points about this deal to consider.

1. Politics of the deal

The speed and secrecy in which the New Zealand-India FTA was devised and enacted has hindered informed debate, limiting analysis to a powerless select committee, while also leaving room for New Zealand First's political rhetoric and misrepresentations to fuel racist attacks against Indian migrant communities.

The fact is that New Zealand’s most fervent aim is dairy market access, which is politically unviable for India's massive small-farmer population. Furthermore, New Zealand’s lack of tariffs offers little value in exchange, while India prioritises negotiations with larger global powers.

The resulting agreement excludes key sectors like dairy and commits to fanciful levels of investment, granting India the right to revoke concessions if financial targets are not met. Potential gains for this country’s fruit and honey exports are also jeopardised we don’t deliver on action plans to improve the productivity of Indian competitors within 5 years .

2. The economics of the deal

India’s FTA schedule covers over 12,500 tariff lines, featuring a mix of immediate cuts, static duties, and 10-year phase-ins, and also uses tariff rate quotas (TRQs) to allow specific quantities of products into the market at lower or zero duties before higher tariffs apply.

But the promise of untold riches is doubtful. MFAT’s National Interest Analysis projects the FTA will provide a negligible economic boost, adding only 0.07% ($401 million) to New Zealand's GDP by 2037 - and that is without any major disruptions to geopolitical trade.

India's economic growth is projected to slow to under 7% following a 9.7% rate in 2021, potentially limiting the expansion of its domestic market. Although New Zealand secured tariff reductions, its exporters will face intense competition from countries with existing FTAs, such as the UK, EU, and Australia.

3. India’s unilateral clawbacks

The FTA commits New Zealand and India to working together to foster economic cooperation and technical assistance - something seemingly primarily aimed at helping increase returns for Indian farmers, fishers, and producers.

The fine print includes a long list of possible forms of “cooperation” and “technical assistance”, which include introduction of high-yield, low-input plant varieties, exchange of high-yield seeds, establishing Centres of Excellent, skills development and training, joint research and development – all of which seem intended to expand production within India of precisely the products that New Zealand aims to export there, even though both countries in theory have to agree on what specific cooperation takes place.

New Zealand's market access for apples, kiwifruit, and honey under the new FTA is contingent upon mandatory, time-bound cooperation to enhance India's production capabilities. India holds the authority to suspend tariff quotas if it determines that New Zealand's required Action Plans fail to deliver satisfactory progress on agricultural competitiveness. There is no appeal.

4. Investment commitment a free pass to India

New Zealand has committed to promoting US$20 billion (about NZ$34b) in investment into India over 15 years—a target the text describes as impossible given New Zealand’s total global investment outflow in 2025 was only NZ$1.46b.

There are implications to this - an economic risk, given exporting such massive capital could worsen New Zealand’s current account deficit, weaken the NZ dollar, and divert funds needed for domestic infrastructure.

Then, if New Zealand fails to meet this target, India has the unilateral right to 'rebalance' the deal by reinstating tariffs or revoking quotas on NZ exports.

There are several steps to this but ultimately no recourse. The investment chapter is excluded from standard dispute settlement, meaning New Zealand cannot legally challenge India’s decisions to hike tariffs.

And, unlike India's similar deal with European countries, the New Zealand agreement contains no 'escape clause' if India’s GDP growth slows down.

5. Te Tiriti o Waitangi goes backwards

Te Tiriti o Waitangi is referred to only twice in the entire FTA and it lacks recent advances on Indigenous rights protections.

The Crown has an obligation to a Māori entity to ensure it has genuine and effective influence on negotiations like these. Input has been facilitated in recent years by confidential access to negotiating texts, but despite the best endeavours of ministers and officials, India refused to allow access to draft texts. That made meaningful input impossible.

6. Little difference on labour mobility

Political opportunism that targets this agreement with racist attacks on Indian immigrants is a diversion from the real, broader and long-standing concerns regarding New Zealand's infrastructure capacity and skills-based migration management. The deal includes five categories of temporary entry—covering business, specialized skills, and student pathways— with specific quotas for 'Iconic Indian' occupations and identified shortage areas. There’s nothing very remarkable here.

7. The mirage of sustainable development

Like many other FTAs, the India-NZ FTA contains laudable aims towards sustainable development - but no enforceable obligations to get there.

It’s worth noting the Sustainable Development chapter also reflects India’s long-standing position that labour and environment provisions do not belong in trade agreements, and are used for protectionist reasons to undermine the comparative advantage of cheaper-labour countries. Similarly, India has insisted on differential obligations of developing countries in responses to the climate crisis.

8. We need a genuine pre-ratification review

The India-NZ FTA is a politically driven and secretly negotiated deal that lacks transparency, democratic legitimacy, and Te Tiriti compliance.

The Labour Party should withdraw its support to prevent the deal from being 'rubber-stamped.'

The Select Committee must conduct a genuine, open inquiry rather than a predetermined approval process.

And the National-led government must act democratically and uphold Te Tiriti obligations before making the agreement legally binding.