New Zealand is expected to complete the ratification of the India–New Zealand Free Trade Agreement (FTA) signed in April by the end of September, paving the way for the deal to come into force before the end of 2026. Direct flights between India and New Zealand are also expected to begin within the next couple of years to further strengthen bilateral trade, investment and people-to-people ties, Trade Minister Todd McClay told Prasanta Sahu in an interview at Wellington.
Q: When is the FTA coming into effect, and could you share the progress of the ratification process in New Zealand?
It’s the highest-quality agreement either country has done. We completed it within nine months of intense negotiation, and it will deliver greater prosperity for the citizens of India and New Zealand.
Both countries are going through the ratification process. We have completed our treaty examination and are now making the legislative changes needed to reduce tariffs to zero for all goods from India into New Zealand on day one, along with implementing the other commitments we have agreed to.
We hope to have that finished by the end of September. The two governments will then agree on a date for the agreement to enter into force, with the aim of making it fully operational before the end of this year.
Q: Where do you see bilateral trade in the next few years after the FTA comes into effect?
It’s going to grow significantly in both directions. While New Zealand is a modestly sized country of just five million people, we import up to NZ$20 billion worth of goods each year from many of our trading partners. From India, it’s only a few billion dollars at the moment, so I think it will grow very quickly. We believe that over the next two or three years, two-way trade can double, and then double again.
But the most important part of the agreement is not just the goods we buy and sell to each other. It’s the relationships and the people-to-people links that will grow.
Air New Zealand has announced it is opening three offices in India to promote New Zealand as a destination. Air India and Air New Zealand are also cooperating and have sought regulatory approval for a codeshare arrangement. I think we will see direct flights between India and New Zealand over the next couple of years, and that will significantly strengthen the relationship.
Q: The FTA also includes a provision to promote $20 billion in investment in India. Which sectors are New Zealand looking to invest in?
It’s a commitment on the part of the New Zealand Government to promote investment into India. The country’s business sector will make its own decisions about where it wants to invest, but I think it will be broad and diverse.
Already, we’re seeing New Zealand companies opening offices and setting up manufacturing plants in India. We also expect some of our larger companies to cooperate with Indian businesses.
In the early years, you’ll see cooperation and investment around food production, agricultural technology and innovation. We’ve made commitments to help raise the earnings of Indian farmers, particularly in kiwifruit, apple production and honey. One idea is to sponsor students to undertake PhDs in New Zealand in areas such as horticultural production.
We’ll be bringing investors to the Indian market, and India has committed to setting up a fast-track investment desk to make approvals happen more quickly, making it easier for New Zealanders to invest. It’s the first time India has done that for any country.
Q: Are you also negotiating a bilateral investment protection treaty with India?
There is already an investment chapter in our current agreement, so we don’t need a separate treaty. It is part of the FTA.
Q; Is there a roadmap for cooperation in critical technologies, critical minerals, clean mobility and semiconductors?
When Prime Minister (Narendra) Modi was here recently, we signed a number of broader cooperation agreements in addition to the FTA. From film production and culture to sport, ICT, technology and defence cooperation—we’re signing agreements because both countries want to work more closely together.
When Prime Minister Christopher Luxon went to India with our largest-ever trade mission, a number of universities joined us and signed cooperation agreements. The University of Waikato has said it will open a campus in India, while others are looking at partnerships. You’ll also see New Zealand universities cooperating with Indian universities on joint qualifications and degrees, allowing students to study in both countries.
I think Modi’s was one of the biggest visits by any world leader to New Zealand and also one of the most successful overseas visits Prime Minister Modi has made.
During the visit, we signed around 20 additional cooperation agreements across a wide range of sectors, including agriculture and defence. Those agreements are taking the relationship to a much higher level.