India pushing for New Zealand FTA by year's end

Wednesday, 10 September 2025

New Zealand and Indian trade negotiators will descend on Queenstown next week as New Delhi pushes to close a free trade agreement by the year’s end.

A third round of formal negotiations between New Zealand and Indian negotiators will take place in the alpine resort town across next week, the Ministry of Foreign Affairs and Trade has confirmed.

The latest round of negotiations, which last took place in New Delhi in July, comes as the Indian commerce minister, Piyush Goyal, again suggests a New Zealand-India free trade agreement could be finalised by the end of the year.

Goyal made the comments to an Indian news network this week, reiterating a conviction expressed by his ministry after the second round of negotiations in July.

Trade Minister Todd McClay on Tuesday said the urgency was “largely in response to what the US has done”. He did not expect a deal would be struck in the “next month or so”.

The United States has placed a 50% tariff on Indian goods, with half this tariff rate being applied due to India buying oil from Russia, because of the continuing war in Ukraine.

“The first announcement they made was Indians should buy from India,” McClay said.

“The second one was that they are speeding up the negotiation of the European Union, Norway and New Zealand. So that's a very welcome thing, but the progress is continually the same.

“Both sides are being very constructive in the negotiation, and it is moving at a reasonable pace. But all trade negotiations are difficult.”

Facing the impact of the tariffs, Indian Prime Minister Narendra Modi has said his government would not compromise the welfare of India’s farmers and fishermen.

India protects its vast agriculture sector, making the prospect of obtaining a deal which provides meaningful access to New Zealand’s primary sector exports challenging. Prior negotiations, begun in April 2010, were fruitless and ended in 2015 after 10 rounds.

McClay said agricultural products were a “sensitive issue” in the negotiations and he did not consider Modi’s comments to mean the negotiation would be harder for New Zealand.

“Prime Minister Modi has also said he wants to increase the earnings of his farmers by at least 50%.

“We've said we can join them, there's innovation and technology that New Zealand is able to work on with India to help achieve that.

“That's something that's been welcomed … I think that will form part of an agreement.”

That New Zealand lacks a deal with India has meant it has lost ground to Australian exports, since their deal came into effect in 2024.

Trade officials in December told MPs at Parliament that New Zealand was the largest sheep meat exporter to India, until Australia’s tariff dropped to zero and their exports increased 163%.

Other examples included wood exports, which had a modest tariff for India of 5%, which Australia has increased by 202%.

For kiwifruit, which attracts a 30% tariff, New Zealand’s main competitor Chile had obtained a reduced tariff of 15%.