New Zealand Keen to Rekindle FTA Talks with India after Nearly a Decade

New Zealand is taking significant steps to revive bilateral Free Trade Agreement (FTA) negotiations with India, nearly a decade after talks broke down over key disagreements in sensitive sectors such as dairy and agriculture. New Zealand Trade Minister Todd McClay is scheduled to meet Indian Ministers and business leaders aiming to restart discussions.

Sources indicate New Zealand’s stance on including dairy—a sticking point in past negotiations—has softened, particularly after India signed the Economic Cooperation and Trade Agreement (ECTA) with Australia. McClay recently remarked in his country’s Parliament that it would be his fault, not Prime Minister Christopher Luxon’s, if an FTA with India isn’t secured this term.

New Zealand is keen to capitalize on untapped trade potential. In FY24, it ranked as India’s 87th largest trading partner, with bilateral trade valued at $873 million. India’s exports to New Zealand included pharmaceuticals, mineral fuels, textiles, and machinery, while imports featured mineral fuels, wood, iron and steel, and kiwi fruit.
A Joint Trade Committee meeting earlier this year highlighted opportunities to enhance two-way trade, which currently represents a fraction of each nation’s total trade portfolio.

FTA negotiations were suspended in 2015 after five years due to India’s reluctance to provide dairy market access—a cornerstone of New Zealand’s economy. However, a change in government and strategy in New Zealand has reignited interest in an FTA.

At a recent India New Zealand Business Council event, New Zealand’s Foreign Affairs Minister Winston Peters hinted at progress, stating that there’s a chance that they will be announcing the beginning of negotiations on the trade deal. India, currently developing a standardized framework for FTA negotiations, remains a critical partner for New Zealand. If successful, the resumption of FTA talks could unlock significant trade and economic opportunities for both nations, deepen bilateral ties, and address market access challenges.