Wellington. New Zealand PM Christopher Luxon on Saturday welcomed the Free Trade Agreement (FTA) signed with India, calling it an achievement of his government. This statement has come at a time when, just a few days ago, New Zealand’s Foreign Minister Winston Peters had expressed objections to this agreement and opposed it. PM Laxon said that we had promised to do FTA with India in our first term and we fulfilled it.
Describing this agreement as important for economic development, he said that it will create new employment opportunities, increase income and promote exports. According to Luxon, this agreement will open the doors of the huge market of 1.4 billion Indian consumers to New Zealand. Linking it to his government’s broader agenda, Lakson said the agreement is a solid step towards fundamental reforms and building the future.
The agreement has also exposed divisions within New Zealand’s ruling coalition government. Foreign Minister and New Zealand First Party leader Winston Peters has described the agreement as neither free nor fair. Peters said he has conveyed his party’s concerns to India’s External Affairs Minister S Jaishankar. Peters alleged that the deal prioritized speed over quality. In a long post on X, he wrote – New Zealand First had warned its coalition partner not to enter into a weak and hasty agreement with India. He said that the government should have used the entire parliamentary term to make a better and balanced agreement, which would have been in the interest of the citizens of both the countries.
According to media reports, the biggest controversy regarding this agreement is regarding the dairy industry. Peters alleged that New Zealand opened its market to India, but in return did not make any concrete concessions in tariffs on New Zealand dairy products such as milk, cheese and butter in the Indian market. He said the deal is not good for New Zealand farmers and is impossible to defend in front of rural communities.
This FTA was announced after talks between PM Modi and Christopher Luxon this week. Both leaders said that this agreement can double bilateral trade in the next five years and bring investment of up to $20 billion to India in the next 15 years. The total trade between India and New Zealand in the year 2024 was $2.07 billion, of which India’s exports were $1.1 billion. Major exports from India include pharmaceuticals, while agricultural and forestry products are exported from New Zealand. According to the Indian government, New Zealand is India’s second largest trading partner in the Oceania region.
Peters also alleged that the agreement focuses more on the movement of Indian workers and increasing investment in India than on trade. He claimed that a new employment visa category has been created for Indian citizens, which was not given to partners like Australia or Britain. He said New Zealand First judges every migration policy on whether it protects the employment of local people and the integrity of the immigration system. According to Peters, this agreement with India does not meet that criteria, especially at a time when New Zealand’s labor market is already under pressure.
