Indian Trade Minister’s visit signals momentum towards Free Trade Agreement - Bhav Dhillon

The upcoming visit of Indian Commerce and Industry Minister Piyush Goyal to New Zealand this week could mark a decisive moment. Photo / Getty Images

THE FACTS

• India and New Zealand are close to finalising a Free Trade Agreement (FTA) after negotiations began in March 2025.
• Indian Commerce Minister Piyush Goyal’s visit could mark a decisive moment in establishing new trade benchmarks.
• The FTA aims to boost sectors like dairy, pharmaceuticals, and renewable energy, enhancing bilateral trade and cooperation.

India and New Zealand are on the cusp of finalising a Free Trade Agreement (FTA) that could significantly reshape their relationship.

Following negotiations initiated in March 2025 during Prime Minister Christopher Luxon’s high-profile visit to India, the talks have seen notable progress across multiple rounds.

As the anticipated culmination nears, the upcoming visit of Indian Commerce and Industry Minister Piyush Goyal to New Zealand this week could mark a decisive moment, potentially establishing a fresh benchmark for bilateral trade relations between the two Commonwealth democracies.

This trajectory of India-New Zealand trade negotiations underscores a committed effort by both countries to strengthen economic ties and achieve a balanced, mutually beneficial agreement soon. The negotiation process, which was formally launched in March 2025, was followed by successive rounds in May, July, September and October 2025. Each of these rounds has reflected steady progress, and with several chapters finalised and significant advancements in key areas, momentum towards the finish line has been sustained.

In the India-New Zealand trade ecosystem, sectors like forestry, agricultural products, dairy, pharmaceuticals, the services sector and machinery play prominent roles. While dairy remains a sensitive issue, negotiators are actively working to find workable solutions which could include market access for concentrated protein, high-value-added dairy products and thus create win-win outcomes.

Trade Minister Todd McClay described the ongoing negotiations as an important step forward and highlighted the constructive nature of negotiations, reinforcing New Zealand’s commitment to delivering a high-quality, balanced agreement benefiting both exporters and consumers.

McClay has met with Goyal several times over the past 24 months, leaving no stone unturned in efforts to conclude the FTA, and has pledged personal accountability for its success. He put his personal credibility and job on the line, when he stated, “If no India free trade agreement is signed this term, blame me and not the Prime Minister”.

It is pertinent to mention that in October 2024, McClay received the “Friend of India” award at the Kiwi-Indian Hall of Fame Awards 2024 for his concerted, steadfast work strengthening India-New Zealand economic ties and advancing the FTA.

Trade Minister Todd McClay has met with Indian Commerce Minister Piyush Goyal several times over the past 24 months.

Minister Goyal’s upcoming visit will be supported by a large business delegation organised by the Federation of Indian Chambers of Commerce and Industry (FICCI). In addition to his official meetings, Goyal is expected to address business forums and community events in Auckland and Rotorua. McClay will join him in Rotorua, his hometown and electorate, returning the hospitality Goyal extended during McClay’s numerous visits to India.

The gesture echoes Prime Minister Modi’s practice of hosting world leaders in cities beyond the capital, such as Ahmedabad and Varanasi, adding a personal touch to modern diplomacy.

As this FTA is widely expected to transform bilateral trade, New Zealand exporters expect expanded access for dairy, agricultural produce, wine, seafood and forestry products while Indian companies anticipate benefits from tariff reductions on pharmaceuticals, home wares, hosiery, leather, cotton and linen products, IT services, talent mobility and machinery. The agreement is also expected to boost the education sector, enhance supply chain resilience and overall provide a predictable business environment.

The partnership is expected to stimulate co-operation in emerging sectors like renewable energy, agri-tech, minerals, space and digital payments. Enhanced connectivity via the recently signed India-New Zealand Air Services Agreement is likely to boost tourism and people-to-people ties, complementing trade growth.

Christopher Luxon, who launched these talks with his landmark March 2025 visit to India, has described India as a “game changer” for New Zealand, noting the current bilateral trade has immense growth potential. Luxon emphasised the pivotal role of India, in his Government’s ambition to “double New Zealand’s exports in the coming decade” through an “all of New Zealand” approach engaging Government, business, and communities. He acknowledged challenges such as dairy market access but reaffirmed the commitment to resolving them constructively.

At the recent Diwali festival in Aotea Square in Auckland, in an interview, Luxon was quoted as saying that, he and Modi are good mates and confirmed that good progress is being made on the trade deal.

The FTA with India, has a significant geopolitical dimension beyond economics and is part of a broader strategic effort to enhance both countries’ roles in the Indo-Pacific trade and security architecture.

For Luxon, the FTA with India is more than an economic goal; it’s a test of his Government’s competence and credibility. He’s made it a key part of his Government’s delivery agenda, mentioning it even during pre-election debates. Any delay or failure to deliver a quality outcome would leave him open to criticism from his opponents.

While strong progress is being made, some challenges remain, particularly India’s protection of its agri sector versus New Zealand’s export ambitions. The negotiations will also need to address non-tariff barriers, regulatory alignment and future review mechanisms to ensure the agreement remains dynamic and futuristic.

Goyal’s milestone visit signals a bold new chapter for India-New Zealand relations and promises to unlock new trade opportunities while reinforcing a strategic partnership vital for the region’s security and economic future.

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