Prime Minister Christopher Luxon takes in a dance performance alongside Delhi's Fisheries Minister, Singh Baghel, as he arrives in India. Video \ Sky News
Herald political reporter Adam Pearse is in India covering the Prime Minister’s visit.
New Zealand and India will re-launch free trade negotiations after almost a decade, announced mere hours after Prime Minister Christopher Luxon touched down in the subcontinent.
It marks a significant milestone for Luxon who has committed to securing a free-trade agreement with India before the 2026 election and is anchoring his four-day trip in prioritising a deeper relationship with India.
However, it isn’t clear to what extent New Zealand’s dairy exports would be factored into any deal which dairy co-op Fonterra believes isn’t worth doing if it doesn’t expand access into the biggest dairy industry in the world.
Barely an hour after Luxon stepped off the NZ Defence Force plane in New Delhi on Sunday, the Indian Government confirmed free trade negotiations with New Zealand would be re-launched next month, agreed during a meeting between Trade Minister Todd McClay and his Indian counterpart, Piyush Goyal, in India this weekend.
Its statement said the decision was a “significant step” towards finalising a “comprehensive and mutually beneficial” trade agreement between the two nations.
“The India-New Zealand FTA negotiations aim to achieve balanced outcomes that enhance supply chain integration and improve market access.”
Trade Minister Todd McClay meets with his Indian counterpart Piyush Goyal in India. Photo / Supplied
Not long after, Luxon and McClay released a statement trumpeting the “major breakthrough” and credited the Government’s “major lift in political engagement” with India as key to securing another round of talks.
The last set of formal negotiations concluded in 2015. Visits from former Prime Ministers, including two from Sir John Key in 2011 and 2016, signalled positive moves towards a deal but it hadn’t eventuated.
Fears opening up access for New Zealand exporters to India’s dairy sector, dominated by small-scale farmers, have been cited as a significant roadblock to securing a free trade deal, particularly given dairy’s status as New Zealand’s largest industry.
During the 2023 election campaign, Luxon promised to deliver a free trade deal with India during his first term, a commitment many commentators doubted would be possible.
Speaking to reporters from their hotel in New Delhi, Luxon and McClay wouldn’t detail whether dairy exports had been discussed.
“We know there will be challenges on a number of topics for both sides. McClay said.
“As you would expect in the trade negotiations, we will work those through.
“We wouldn’t have kicked this off if we weren’t confident that we can actually work incredibly hard together to get ourselves to a good place that actually works for an agreement for both India and New Zealand,” Luxon said.
Prime Minister Christopher Luxon holds a media stand-up on his first day in India during his official visit. Photo / RNZ
McClay expected the first in-person negotiations would be held in New Zealand. He wouldn’t speculate how long negotiations would take, saying it would “take as many rounds” as were needed.
Despite the two countries holding 10 rounds of talks in the past, both Luxon and McClay described upcoming negotiations as a “fresh slate”.
The announcement came amid heightening uncertainty over the state of global trade as United States President Donald Trump implemented a widespread tariff hike.
McClay, who recently spoke with his US counterpart, accepted the developments had played a role in the resumption of negotiations with India.
“What’s happening around the world hasn’t hurt our chances of launching an agreement, but as [with] all trade negotiations, this one will be as hard as any other.”
Late on Sunday evening [NZ time], Luxon landed at the Palam Air Force Station in New Delhi and was met by several officials including the state’s Fisheries Minister, Singh Baghel.
Luxon was treated to a performance by eight Rajasthan folk dancers before escaping the heat, whisked away in a black Mercedes ahead of his stand-up with travelling media and a bilateral with India’s External Affairs Minister S Jaishankar.
Luxon also fielded questions over the call he shared with other world leaders on Saturday to discuss Russia’s war with Ukraine amid United Kingdom PM Keir Starmer’s effort to take a coordinated approach to help end the conflict, dubbed the “coalition of the willing”.
He said the call had provided updates on progress towards a temporary ceasefire, which had been agreed to by Ukraine.
“The ball is now in the court of Russia about this, and it’s up to them to actually step up and reciprocate and we haven’t seen that.”
Luxon said New Zealand hadn’t received a formal request to join the coalition, which would require agreement within Cabinet.
Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.
