India and New Zealand have restarted free trade talks a decade after the negotiations collapsed as Christopher Luxon arrived in Delhi for talks with Narendra Modi.
The New Zealand prime minister, who is in India for a five-day visit, signed major trade and defence agreements to boost economic ties and enhance security in the Indo-Pacific.
The prime minister touted the deal as a "major breakthrough" as it marked a significant milestone for Mr Luxon, who had committed to secure the free trade pact with India in an audacious pre-election pledge.
"It's a great win for New Zealand," Mr Luxon told reporters. "It's a great way to start the trip. I mean, we've got a breakthrough economic agenda here.
"India holds significant potential for New Zealand and will play a pivotal role in doubling New Zealand's exports by value over the next 10 years," Mr Luxon said.
The first round of negotiations for the deal is set to begin next month.
Mr Luxon had promised to deliver a free trade deal with India during the 2023 election campaign. Analysts at that time raised doubts over his pledge with negotiations in limbo.
Mr Luxon is leading a high-level delegation which includes key business leaders and several parliamentarians, as a part of his first visit to India. It is reportedly one of the largest delegations that Mr Luxon has travelled with so far.
The renewed trade talks come as part of India’s broader push to secure trade agreements with other nations, following US president Donald Trump’s decision to impose reciprocal tariffs on imports from several countries, including India. These tariffs are set to take effect on 2 April.
Mr Luxon will also be a keynote speaker at the inaugural session of the geopolitical conference in Delhi, Raisina Dialogue, which will also be attended by top Donald Trump administration officials, including US Director of National Intelligence Tulsi Gabbard.
The Indian prime minister said the two countries will prepare a roadmap “for mutual cooperation in defence industries”, including initiating negotiations on a “mutually beneficial” free trade agreement.
He added that “as maritime nations, India and New Zealand have a strong and common interest in an open, inclusive, stable and prosperous Indo-Pacific, where the rules-based international order is upheld”.
“New Zealand is committed to doing more with India across a wide range of areas — defence and security, trade and economics, people-to-people ties, education, tourism, sports and culture,” Mr Luxon said at joint press conference with Mr Modi.
Defence cooperation with New Zealand is significant as it is a member of the Five Eyes alliance –alongside Australia, Canada, the UK, and the US amid growing concerns over Beijing’s expanding influence in the Pacific and its increasing assertiveness in regional affairs.
On Sunday, the representatives of the Five Eyes alliance took part in a conference in Delhi. The meeting attended by intelligence and security chiefs was hosted by India's National Security Adviser Ajit Doval.
The bilateral trade between India and New Zealand stood at $873.4m in 2023-24 financial year compared to $1.02bn in 2022-23.
The trade negotiations began between the two countries in 2010. Nine rounds of negotiations were conducted, with the last formal round taking place in February 2015 in New Delhi.
The deal stalled over the key issue of New Zealand, a major exporter of dairy products, seeking a greater access to the Indian market. However, India, with its large dairy industry, was reluctant to lower tariffs, fearing competition for local farmers.
The Kiwi leader, however, did not say whether dairy exports had been discussed and appeared optimistic about working through the challenges.
However, India has become more open to negotiation in trade deals with other countries as it strikes to boost its economic clout.
India and the European Union last month agreed to finalise a long-pending free trade agreement by the end of this year. A similar trade deal between India and the United Kingdom is also in the works.
India and Australia also signed a major trade cooperation deal in 2023.
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