Labour still discussing India trade deal
Tuesday, 27 January 2026
Labour leader Chris Hipkins says his party is “broadly supportive” of the Government’s free trade agreement with India but wants to have further discussions on migrant exploitation before confirming its support.
The Government needs either Labour or the Green Party’s vote to get the deal passed, as NZ First is withholding its support on the deal.
Earlier on Tuesday Hipkins said his party would be discussing the deal at its caucus meeting that day and he thought they would “probably” come to a decision.
But speaking following the meeting he was not quite ready to give the Government Labour’s full support.
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“Look, we're broadly supportive of securing a trade agreement with India, as I said this morning. We've got a lot of faith in the people who negotiated that deal. They're the same people that negotiated the deals that Labour signed with the European Union and with the UK,” Hipkins said.
“But there are still some outstanding issues around how that gets implemented on the New Zealand side. We want to talk to these issues around migrant worker exploitation, for example, and safeguards that we put in around that.”
Hipkins said he understood the deal itself was unlikely to be renegotiated at all so it was more about checking how things would be implemented on the New Zealand side.
“Once these agreements are negotiated, it’s very difficult for the Government to then go back and say ‘we need to renegotiate’.”
Labour’s trade spokesman, Damien O’Connor, said it was probably the best deal the Government could have got with the time it had allowed itself.
“I think it's the best deal that we can get. Probably if the Government could have taken longer, they could maybe got a better deal. But we have to look at the proposal as it is,” O’Connor said.
Prime Minister Christopher Luxon promised at the election that he would finalise a deal this term.
Trade and Investment Minister Todd McClay signalled Labour’s support, saying his ongoing conversations with the party were in a “very constructive place”.
“I think they recognise it's a good agreement, but they've just got to go through their own caucus process.”
NZ First rejected the deal, saying it did not get dairy enough access but gave too much away on immigration.
“While New Zealand is completely opening its market to Indian products under this deal, India is not reducing the significant tariff barriers currently facing our major dairy products,” Peters said.
“On a per capita basis, National has offered far greater access for India to our labour market than did Australia or the United Kingdom to secure their FTAs. This is deeply unwise given New Zealand’s current labour market conditions, with too many New Zealanders in unemployment or doing it tough economically.”
What does the deal say?
The agreement eliminates and reduces tariffs on 95% of New Zealand’s exports, with almost 57% being duty-free from day one increasing to 82% when fully implemented, with the remaining 13% subject to sharp tariff cuts.
The deal will see India abolish tariffs on sheep meat, wool, coal and most forestry and wood products immediately.
New Zealand will allow 1667 Indians here on three-year, skilled visas per year and highly skilled graduates will be allowed to stay in the country and work longer.
Dairy has had its trade restrictions eased, however it is mostly limited to high-end value-added products and ingredients for export products.
The kiwifruit quota will be set at four times current export volumes and all quota will be tariff free, while out of quota export will be taxed at 50%.
Wine, which currently attracts a 150% tariff, will be slashed to 25% or 50% depending on the price of the wine.