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AAP
AAP
Ben McKay

Luxon meets Modi but breaks India election promise

Christopher Luxon has met with Narendra Modi on the sidelines of the East Asia Summit. (Rick Rycroft / Dean Lewins/AAP PHOTOS)

New Zealand Prime Minister Chris Luxon has broken a promise to visit India in his government's first year, leaving his already tenuous goal of a first-term free trade deal behind schedule.

Mr Luxon met with Indian Prime Minister Narendra Modi on Thursday on the sidelines of the East Asia Summit in Laos.

The NZ leader came to power in October 2023 with key promises around trade, and in particular trade with India, the world's fifth-biggest economy.

Trade Minister Todd McClay has visited India several times in the past 12 months to re-start talks, but Mr Luxon has conceded travel himself in 2024 won't be possible, as promised.

"It was very difficult for us to practically make it happen between now and Christmas. We're looking to do it in the new year," he told journalists in Laos.

Australia managed a free trade agreement with India, which entered into force in 2022.

Kiwi hopes for a New Zealand-India trade deal is complicated by the two countries competing dairy sectors.

Sir John Key's National-led government began formal talks in 2010, but after 10 rounds of negotiations, abandoned that dialogue in 2015.

The Labour government from 2017-2023 focused its efforts elsewhere, signing free trade deals with Europe, the UK and an upgrade to its China agreement.

Eyeing opportunity, Mr Luxon revived hopes of an Indian breakthrough in the 2023 election campaign, using a high-profile TVNZ debate to pledge a deal.

"We are going to get a free trade agreement with India in our first term," he said.

The opposition says those hopes are overly ambitious and cynical politics.

"At the last election they told voters anything to get elected," Labour's trade spokesman David Parker told AAP.

"They're never going to achieve a comprehensive free trade agreement because India doesn't want one and that's clear from everybody who knows about these things."

Mr Parker said he expected Mr Luxon to announce "some minor side agreement that won't cover our main exports". 

"They'll do something but it won't be what was promised at the election which was a comprehensive free trade agreement," he said.

Strong relations with India are increasingly important to New Zealand owing to huge recent migration.

More than 75,000 Indians have moved to New Zealand in the past two years - the number one source of migrants.

The East Asia Summit, held alongside the annual ASEAN summit, is a lower-profile international gathering involving south-east Asian nations and significant trading partners.

It is particularly valuable for NZ - which is not a member of the G20, the Quad, or AUKUS - so its prime minister can attend and enjoy meetings with much larger powers.

While in Laos, Mr Luxon held formal meetings with counterparts in Vietnam and Cambodia, and had brief talks with Japan's new prime minister Shigeru Ishiba.

The Kiwi leader also held an informal three-way meeting with Australian prime Minister Anthony Albanese and Canada's Justin Trudeau on the sidelines of the formal program.

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