Guarded celebrations as National secures support for its India free trade agreement
Friday, 24 April 2026
ANALYSIS: Trade Minister Todd McClay should be shouting from the rooftops after securing the votes to implement the New Zealand-India free trade agreement (FTA).
National promised to get this deal over the line this term and the party has done it against all the odds, obstacles and naysayers.
So why then, does McClay sound so subdued about finally securing the support from Labour he needs to implement the deal?
“It’s a day for all New Zealand businesses to celebrate,” he told reporters on Thursday afternoon.
“It’s a significant achievement for the New Zealand economy and I’m glad that bipartisanship in trade continues.”
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The answer lies in the tail end of that measured response. Despite getting this agreement over the line with India last year, National was effectively hobbled by NZ First at the finish line and forced to turn to Labour for support.
It was back in December - as National was announcing negotiations to eliminate or reduce tariffs on 95% of New Zealand’s exports had wrapped up - that this coalition rift was first made public.
McClay and Prime Minister Christopher Luxon hadn’t even left the podiums in the Beehive theatrette when a New Zealand First media release landed in reporters’ inboxes.
It said NZ First had exercised the agree to disagree provision when asked to approve the India deal in Cabinet the week before, and would be voting against enabling legislation if and when it was introduced to Parliament.
Leader Winston Peters said his party was voting against it on the basis it gave too many concessions on immigration in exchange for poor gains on dairy exports.
Major access for dairy exports was always going to be a tall ask, given India’s protectionist approach to the livelihoods of tens of millions of its small-scale dairy farmers.
While NZ First’s concerns over dairy access appear to have, at least publicly, ebbed away, its inflammatory stance on immigration is louder than ever.
NZ First’s refusal to vote for the deal foreshadowed a far bigger problem for National: its coalition partner’s “anti-immigrant bias”.
That was how Luxon characterised NZ First’s approach to immigration on Newstalk ZB's The Country earlier this week.
This was after NZ First deputy leader Shane Jones said the FTA would bring a “tsunami of butter chicken”.
It’s an ugly, though unsurprising, development. New Zealand First, its leader unshackled from the pomp and responsibility of deputy prime minister, has well and truly switched into campaign mode.
Asked if NZ First was being racist over the deal, McClay said National’s coalition partner had created a distraction.
“What I have heard is a great disservice to Indian New Zealanders and all ethnic minorities who have chosen New Zealand has their home. I have a very simple and clear message for them on behalf of the National Party; they are valued New Zealanders, we’re pleased that they’re here and they should continue to know that New Zealanders don’t share some of the views I’ve heard this week.”
National will continue to distance itself from NZ First on this topic but that won’t make it go away. NZ First, buoyed in the polls, is enjoying the airtime too much.
McClay was right to identify it as a distraction; it’s taken the spotlight away from what would otherwise be a significant development in New Zealand’s trade portfolio and a career highlight for him personally.
While it was never feasible for Labour to hold out forever on the deal. It has finally come to the party on it, saying it will vote in favour of enabling legislation in exchange for faster visa change processes and stronger action on migrant exploitation.
Leader Chris Hipkins has clearly seen enough information to assure him the deal is on the whole a good thing for New Zealand, though he’s warning it may come with a catch down the line.
“We still remain concerned about the Government signing New Zealand up to potentially $20 billion worth of investment in India. We think that's an unrealistic target,” Hipkins said.
“That is not something that the Labour Party would have signed New Zealand up for but the current government has, so all of our exporters who seek to take advantage of the opportunities this trade agreement provides need to do their own due diligence.”
The New Zealand-India FTA had already been legally verified by the time Labour said it would support it but the development means the deal now has the votes to become law when it’s eventually introduced to the House.
Labour was canny with its timing - signalling its support on a Thursday morning of an incredibly busy sitting week, knowing full well that the attention of the news media would soon move on.
McClay has been under immense pressure to get this deal over the line and should be chuffed he’s achieved it this term, but he’s clearly wary of enthusiastically celebrating too soon, and for good reason.
“I’m certainly celebrating but I’ve got to get on a plane and fly all the way there. There’s about 35 or 40 people from New Zealand who have chosen to come up themselves and book flights. I’m just checking to make sure there is ink in my pen,” he told The Post.
McClay heads to India over the long weekend to ink the FTA in New Delhi on Monday. As he is flying commercial, he won’t have many (if any) New Zealand reporters with him for the ride. The party never really had clear air to celebrate the deal - and it seems unlikely it will get that much now.