‘More jobs, higher incomes’: New Zealand PM Christopher Luxon defends India FTA amid FM Peters’ objections

New Zealand Prime Minister Christopher Luxon announced on Friday that his government has secured a long-awaited Free Trade Agreement (FTA) with India, describing it as a landmark achievement that will drive jobs, incomes, and exports.

In a post on X, Luxon said the deal fulfilled a key promise made during his first term in office and would significantly expand New Zealand’s access to one of the world’s largest consumer markets.

“We said we’d secure a Free Trade Agreement with India in our first term, and we’ve delivered. This landmark deal means more jobs, higher incomes and more exports by opening the door to 1.4 billion Indian consumers,” Luxon wrote.

Describing the agreement as a foundational step for long-term growth, the Prime Minister added, “Fixing the Basics. Building the Future.”

The announcement comes amid heightened political debate within New Zealand, even as both governments project the agreement as a major step forward in bilateral economic ties. While the Luxon-led National Party has framed the pact as a strategic and economic win, critics within the ruling coalition have raised concerns over its scope and impact on key domestic sectors.

About India–New Zealand FTA

The Free Trade Agreement was announced earlier this week following talks between Prime Minister Narendra Modi and Christopher Luxon. Both leaders said the deal could potentially double bilateral trade within five years and lead to investments worth $20 billion in India over the next 15 years.

Negotiations for the agreement began in March. At the time of the announcement, Modi and Luxon said the pact reflected the “shared ambition and political will to further deepen ties” between the two countries.

However, the deal has exposed fault lines within New Zealand’s ruling coalition. Foreign Minister Winston Peters publicly criticised the agreement, calling it “neither free nor fair.”

Peters, who leads the New Zealand First (NZF) party, said he had conveyed his party’s concerns directly to India’s external affairs minister S Jaishankar, while stressing that he held “utmost respect” for him despite opposing the deal.

According to Peters, the agreement gives away too much without securing adequate returns for New Zealand. He said NZF had warned its coalition partner against rushing negotiations without wider political consensus.

“New Zealand First urged its coalition partner not to rush into concluding a low-quality deal with India, and to use all three years of this Parliamentary cycle in order to get the best possible deal,” Peters wrote in a lengthy post on X.

He further alleged that speed was prioritised over substance, stating, “National preferred doing a quick, low-quality deal over doing the hard work necessary to get a fair deal that delivers for both New Zealanders and Indians.”

A major flashpoint is the treatment of New Zealand’s dairy sector. Peters said that while New Zealand fully opened its market to India, the move was not reciprocated through reduced tariff barriers on Indian imports of key dairy products.

“This is not a good deal for New Zealand farmers and is impossible to defend to our rural communities,” Peters said, adding that the India FTA would be “New Zealand’s first trade deal to exclude our major dairy products – including milk, cheese and butter.”

Trade in goods and services between India and New Zealand stood at $2.07 billion in 2024, with Indian exports accounting for $1.1 billion. India’s key exports include pharmaceuticals, while New Zealand primarily ships forestry and agricultural products. According to an Indian government release, New Zealand is currently India’s second-largest trading partner in Oceania.

Peters also claimed that portions of the agreement focus less on reciprocal trade and more on easing the movement of Indian workers to New Zealand and boosting investment flows into India. He argued that similar labour market access had not been extended to partners such as Australia or the UK.

Raising concerns over domestic employment, Peters said, “New Zealand First looks at all proposed changes on migration from the same standpoint: do they protect the ability of New Zealanders to find meaningful employment as well as the integrity of our immigration system?”

According to him, the India deal “fails that test” by creating a new employment visa category specifically for Indian citizens, which he warned could increase migration pressures “at a time when we have a very tight labour market.”