A deal this good shouldn’t be this hard
It took nine months to negotiate a free trade agreement covering 95% of New Zealand’s current exports to India. That is blisteringly fast by trade negotiation standards. The deal delivers NZ$43 million in tariff savings on day one, rising to NZ$62 million at full implementation. It opens preferential access to a market of 1.4 billion people with a middle class projected to exceed 700 million. India currently takes just 1.5% of NZ’s total exports, a number that looks like a rounding error against the opportunity.
And it is stuck in Wellington because nobody can agree to vote for it.
What exporters actually stand to win
The sector-by-sector numbers are not subtle. Wine exporters face 150% tariffs that would be eliminated. Volcanic Hills Winery head Brent Park called it “an absolute game-changer for the wine industry”, provided it doesn’t get watered down.
Manuka honey tariffs would drop from 66% to 16.5%, with export volumes potentially growing from 14 to 200 metric tonnes annually. Chief trade negotiator Vangelis Vitalis confirmed New Zealand is “the first to secure that” preferential access. Sheep meat loses its 33% tariff immediately. Forestry gets 95% of exports duty-free from day one, a lifeline for a sector where wood product exports to India collapsed from NZ$326 million in 2019 to just NZ$64 million in 2024.
The demand signal is already visible. An entire shipment of Rouge apples from Hawke’s Bay sold out in an Indian wholesale market within a day. Over the next decade, NZ exports to India are projected to more than double.
Two parties, two different reasons to stall
The FTA requires Tariff Act amendments, which means a parliamentary majority the government does not have. NZ First pulled support before the deal was even officially secured. Trade Minister Todd McClay revealed on 29 January that the government had offered temporary three-year work permits for 1,670 Indian nationals as a concession. NZ First walked anyway.
That leaves National needing Labour. Chris Hipkins has said the “government will need to sit down and have a conversation with us rather than saying this is the agreement that we have signed, you should just support it”. Labour has raised pointed questions about the deal’s $33 billion FDI target over 15 years, compared to just $88 million actually invested from China over 25 years under that FTA. McClay calls the target “aspirational.”
Meanwhile, there are conflicting statements between the two governments on signing timing. India’s Commerce Minister publicly stated McClay would travel to India in late April. McClay would only say the two sides are “working towards legal verification of the text.” Confusion like this does not inspire confidence.
The people with the most to gain are making the least noise
This is the part that should embarrass the business community. As Fran O’Sullivan argued in the NZ Herald, if any other country had landed this deal, its corporate leaders would be loudly promoting it as a strategic win. Instead, New Zealand’s chief executives have retreated to the sidelines. McClay is reportedly planning to call business leaders directly to encourage public support. A trade minister having to lobby his own business constituency to back a deal that benefits them is not a good sign.
The NZ India Business Forum has been the most vocal exception. Chair Philip Gregan warned that “the difficult state of the world trade environment points to the need to conclude these negotiations as soon as possible”. The NZIBF’s own data shows NZ exports to India declined from NZ$1.04 billion in 2018 to NZ$718 million in 2024, an annualised decrease of 12%. The cost of not having a framework is already measurable.
Delay has a price competitors will collect
Every first-mover advantage in this deal has an expiry date. New Zealand is the first country to secure preferential manuka honey access to India. That advantage only materialises once the agreement is ratified. Australia, the EU, and the US are all negotiating their own arrangements. Every month of Wellington political theatre is a month competitors use to close the gap.
Labour’s concerns about process and FDI targets are not unreasonable. But they are fixable through negotiation, not through indefinite delay. NZ First’s withdrawal is a sunk cost. The path forward runs through a Labour-National conversation that both sides claim to want but neither seems willing to start in earnest.
The exporters who stand to benefit need to stop waiting for permission and start making the case publicly. If the deal dies because business leaders were too cautious to back it on the record, they will have nobody to blame but themselves.
Sources
- New Zealand secures landmark Free Trade Agreement with India – Beehive (2025-12-17)
- Key Facts on New Zealand-India Trade – MFAT
- Unpacking the details of New Zealand’s free trade deal with India – RNZ
- NZ First pulled support for India FTA before it was secured, Todd McClay reveals – RNZ (2026-01-29)
- Government needs to ‘sit down and have a conversation with us’ on India trade deal – Hipkins – RNZ
- Conflicting statements over India free trade agreement signing – RNZ
- $88m in 25 years, $33b in 15: Why Labour is calling foul on India FTA target – BusinessDesk
- Rotorua exporters could gain ‘huge’ benefit from India free trade agreement – NZ Herald
- Why business can’t stay quiet on the India trade deal – Fran O’Sullivan, NZ Herald
- Labour-National standoff aside, the India-NZ trade deal is a blueprint for real growth – The Conversation
- Submission to MFAT on a Comprehensive FTA with India – NZIBF
- NZIBF welcomes India FTA negotiations – NZIBF