 "New Zealand Prime Minister Christopher Luxon speaks during a meeting with Vietnamese Prime Minister Pham Minh Chinh (not seen) in Hanoi, Vietnam on February 26, 2025. File Image/AP")
New Zealand Prime Minister Christopher Luxon is in India until March 20, marking a significant step in strengthening bilateral ties.
His visit aims to advance economic cooperation, particularly in securing a trade deal, and bolster security collaboration in the Indo-Pacific.
Luxon will be accompanied by one of the largest political and business delegations ever to travel with a New Zealand premier, putting a spotlight on the importance his government places on deepening engagement with India.
During his visit, Luxon will hold talks with Prime Minister Narendra Modi in New Delhi and engage with business leaders in Mumbai. He will also deliver the keynote address at the Raisina Dialogue on March 17, coincidentally becoming the first non-European leader to do so.
Luxon has been vocal about his commitment to rebuilding and expanding trade relations with India, which he criticised the previous Labour government for neglecting. “Since coming into office, I have signalled that strengthening our relationship with India is a key priority for my government,” he stated.
He highlighted the sharp contrast between New Zealand’s trade with India, which stands at just over NZ$2 billion, and its NZ$38 billion trade relationship with China, noting the untapped potential in India’s market.
New Zealand and India began free trade agreement (FTA) negotiations in 2010, but discussions stalled after the 10th round in 2015, largely due to India’s concerns about New Zealand’s dairy exports. But on Sunday, both countries decided to launch negotiations for a “comprehensive and mutually beneficial” free trade agreement.
“We are delighted to announce the launch of India-New Zealand Free Trade Agreement (FTA) negotiations. This marks a significant milestone in our partnership, reflecting our shared vision to deepen trade ties and expand economic opportunities,” Commerce Minister Piyush Goyal said in a post on X.
What India-New Zealand trade looks like
Trade between India and New Zealand stood at $1.75 billion in 2023-24. In the year ending March 2024, New Zealand exported $1.29 billion worth of goods and services to India and imported $1.47 billion, resulting in a trade deficit of $178.16 million.
India ranked 15th among New Zealand’s trading partners for both exports and imports.
New Zealand’s primary exports to India include wool, iron and steel, aluminium, fruits and nuts, wood pulp, and recovered paper, while India exports pharmaceuticals, machinery, precious metals, textiles, vehicles, and apparel.
The largest services export from New Zealand to India is travel, particularly in education. With approximately 8,000 Indian students enrolled in New Zealand, education remains a key area of bilateral engagement.
However, New Zealand’s overall investment in India has been minimal, amounting to just US$79.02 million between 2000 and 2023, accounting for only 0.01 per cent of India’s total inward foreign direct investment (FDI).
In comparison, Australia invested US$1.1 billion in India during the same period. New Zealand risks missing out on India’s economic boom unless it prioritises trade and investment ties more aggressively.
What history India-New Zealand share
India and New Zealand share deep-rooted historical ties dating back to the 19th century when Indian migration to New Zealand began.
Today, New Zealand is home to around 300,000 people of Indian origin, representing diverse linguistic, religious, and cultural backgrounds. Indian festivals such as Diwali and Holi are widely celebrated across the country, reflecting the strong cultural connection between the two nations.
“We’ve already made incredible progress over the last year as we invest in building a broad-based, sustainable relationship with India, the world’s fastest-growing major economy, and the place from which six per cent of New Zealand’s population claim their heritage. I hope my visit will further strengthen the close links between us," stated Luxon.
Diplomatic relations were formally established in 1950 when India set up a Trade Commission in New Zealand, later upgraded to a Consulate General in 1952. Over the years, high-level visits from both sides have helped foster stronger bilateral ties.
Key visits include Indian Prime Ministers Indira Gandhi (1968) and Rajiv Gandhi (1986), President Pranab Mukherjee (2016), and President Droupadi Murmu (2024).
New Zealand Prime Minister John Key visited India in 2016, and in 2024, Deputy Prime Minister Winston Peters visited India to highlight the importance of strengthening bilateral relations.
New Zealand has previously identified India as a priority partner through initiatives such as the “Opening Doors to India” policy in 2011 and the “India-NZ 2025 – Investing in the Relationship” strategy paper released in 2020. These policies have laid the groundwork for expanding trade, economic cooperation, and diplomatic engagement.
The way forward for India-New Zealand
New Zealand has expressed interest in restarting FTA negotiations with India, but experts suggest that a Comprehensive Economic Partnership (CEP) might be a more viable alternative.
Unlike an FTA, which focuses solely on tariff reductions, a CEP includes provisions for services, investment, government procurement, dispute mediation, and other regulatory aspects. This approach may be more appealing to India and could pave the way for broader economic collaboration.
A closer relationship with India would also help New Zealand address critical skilled labour shortages. However, this would require mutual recognition of qualifications and structured training programs in key service sectors, opines Rahul Sen, senior lecturer, School of Economics, Auckland University of Technology, in an article for The Conversation.
Furthermore, global supply chain disruptions during the COVID-19 pandemic underscored the importance of economic risk diversification, making it imperative for New Zealand to reduce its dependence on a few key trading partners.
According to the India New Zealand Business Council, significant opportunities exist beyond agricultural exports. Potential growth areas include forestry, agricultural and financial technology, education, digital services, traditional medicines and renewable energy.
Horticulture New Zealand has already partnered with the Indian state of Himachal Pradesh to improve apple production.
New Zealand is also lagging behind countries like Australia in engaging with India’s rapidly internationalising education sector.
While Australian universities such as Deakin and Wollongong are opening campuses in India under the country’s New Education Policy 2020, New Zealand’s institutions have yet to establish a comparable presence.
With India’s young population and growing demand for quality education, this represents a missed opportunity.
While Luxon’s visit to India signals New Zealand’s renewed interest in deepening economic and strategic ties, it is also meant to ensure that the island country does not miss the train as India continues to register as the fastest-growing major economy in the world.
With input from agencies
Anmol is a Senior Sub-Editor with Firstpost. He likes to cover stories that intrigue him, generally revolving around international polity, Indian foreign policy, human interest, environment and even the politically-charged election cycles in India. He has far too many disparate interests with a constant itch for travel. Having visited fourteen states in the Indian subcontinent, he is always on the lookout for opportunities to add more to the list. He enjoys watching Football, Tennis and F1 purely as a sports enthusiast.