New Zealand Labour Backs India Free Trade Deal, Boosting Chances of Parliamentary Approval

New Zealand’s opposition Labour Party has announced it will support the proposed free trade agreement (FTA) with India, significantly increasing the likelihood of the deal passing through parliament. The decision comes despite internal disagreements within the current governing coalition, where one partner has expressed opposition to the agreement.

Labour leader Chris Hipkins stated that while the deal may not fully reflect what his party would have negotiated, Labour recognizes the importance of strengthening New Zealand–India relations. He emphasized the value of the country’s Indian communities and the broader economic and diplomatic benefits tied to the agreement.

The New Zealand–India free trade deal, finalized in December, is designed to enhance bilateral trade by eliminating or reducing tariffs on approximately 95% of New Zealand’s exports to India. Notably, more than half of these goods will become duty-free immediately once the agreement takes effect. In return, India will gain full duty-free access to the New Zealand market, creating a more open and competitive trade environment between the two nations.

As part of the agreement, New Zealand has also committed to investing $20 billion in India over the next 15 years, further deepening economic ties and supporting long-term growth opportunities. The official signing of the deal is scheduled to take place in Delhi on Monday.

Within New Zealand’s government, the National Party and coalition partner ACT have expressed strong support for the FTA. However, New Zealand First, the third coalition partner, has opposed the agreement, making Labour’s backing essential for ratification. Historically, trade agreements in New Zealand have enjoyed bipartisan support, and industry leaders are urging lawmakers to maintain that tradition.

Exporters and business groups have highlighted the potential economic benefits of the deal, calling for unified political support to ensure smoother trade access and stronger international partnerships.