India-NZ trade talks signal a new era of co-operation

Tuesday, 4 November 2025

Christopher Luxon and Indian Prime Minister Narendra Modi hug after the signing of a memorandum of understanding in March this year.

Bhav Dhillon is patron of the India-NZ Business Council.

OPINION: Fourteen years have passed since an Indian Minister of Commerce last visited New Zealand. In 2011, then-Minister Anand Sharma travelled to Wellington and Auckland to meet his counterpart Tim Groser. The atmosphere was optimistic. Both spoke of trebling bilateral trade, unlocking potential in dairy, agriculture, and technology, and drawing up a roadmap for deeper co-operation.

Little, however, came of those talks. Political will drifted, electoral priorities intervened, and the proposed free-trade agreement quietly slipped down the agenda as initiatives such as the Regional Comprehensive Economic Partnership (RCEP) took centre stage. In the end, nothing eventuated: India withdrew from the RCEP at the last moment.

Fast-forward to 2024. Amid the rough and tumble of election politics, Christopher Luxon assembled a new coalition government. Throughout the campaign, he criticised Labour’s failure to engage with India and pledged that, if elected, he would secure a free-trade agreement. True to his word, Luxon’s Government moved quickly. Trade Minister Todd McClay made his first overseas visit to India, signalling to both the Indian Government and the New Zealand public that this administration means business.

Formal negotiations were re-launched during Prime Minister Luxon’s landmark visit to India in March 2025. Travelling with a business and community delegation and a kapa haka group, he described India as a “game changer” for New Zealand, noting the immense untapped potential in bilateral trade. Luxon emphasised India’s pivotal role in his ambition to double New Zealand’s exports within a decade through an “all-of-New Zealand” approach that engages government, business, and communities.

Indian Prime Minister Narendra Modi and his New Zealand counterpart, Christopher Luxon, met Monday in New Delhi as the two countries seek to deepen their defence and economic ties.

He acknowledged challenges, such as dairy market access, but reaffirmed his commitment to resolve them constructively. Four rounds of intense negotiations between McClay and Indian Minister Piyush Goyal have since raised hope that both countries are close to concluding an agreement.

That expectation has grown with news of Goyal’s visit to New Zealand this week. A chartered accountant and law graduate, Goyal brings decades of political and economic experience. On his maiden visit, he will lead a 50-strong business delegation for meetings in Auckland and Rotorua, launching the next phase of trade engagement.

Excitement among officials and the business community is noticeable. Stakeholders across sectors are showing renewed appetite to do more with India, and expectations from this visit are high. With cautious optimism, a joint statement on the status of the FTA is widely anticipated.

Sectors such as horticulture, forestry, agriculture, dairy, pharmaceuticals, services, and machinery all stand to gain. While dairy remains a sensitive issue, negotiators are expected to find middle ground and create a workable solution.

New Zealand exporters hope the agreement will open broader access to key markets in dairy, horticulture, wine, seafood, forestry, and minerals. Indian firms, in turn, seek improved outcomes for pharmaceuticals, textiles, leather goods, machinery, and homewares, along with greater scope for IT services, investment, and talent mobility. The deal aims to reduce tariff and regulatory barriers and create a more predictable environment for business and foreign direct investment.

Beyond traditional goods and services, the partnership could strengthen co-operation in emerging fields such as medical tourism, renewable energy, agri-tech, minerals, space technology, and fintech. It may also open new avenues for collaboration in education and skills development, supporting both economies’ growing need for innovation and talent.

Enhanced air connectivity through the new India–New Zealand Air Services Agreement is expected to complement these economic gains by boosting tourism and people-to-people exchange. New Zealand’s vibrant Indian diaspora of about 300,000 already forms a strong foundation for deeper ties. Shared passions for cricket, common Commonwealth links, and a mutual commitment to democratic values add further depth.

As a trading nation, New Zealand cannot advance its economic prospects without engaging with fast-growing economies such as India, soon to become the world’s third-largest. The rising purchasing power of India’s expanding middle class presents an exceptional opportunity to meet New Zealand’s export ambitions.

Beyond economic benefits, a free trade agreement would strengthen the wider Indo-Pacific partnership. Closer co-operation between India and New Zealand could advance shared geopolitical interests, bolster regional security, and support a free and rules-based order. While challenges remain – including India’s dairy protections and New Zealand’s export sensitivities – addressing non-tariff barriers, aligning regulations, and establishing mechanisms for review will be key to keeping the agreement relevant and resilient.

Minister Goyal’s visit marks a new chapter in India-New Zealand relations – one that could expand trade, deepen trust, and reinforce a partnership vital to both regional stability and long-term growth.