McClay heads to New Delhi for next round of FTA talks as NZ seeks ‘Australia-plus’ deal

McClay says securing a high-quality FTA with India is “strongly in New Zealand’s national interest,” warning that competitors are already gaining a significant edge.

Trade and Investment Minister Todd McClay has departed for New Delhi to lead the latest round of ministerial-level negotiations on a New Zealand–India Free Trade Agreement (FTA), marking another significant step in what has become one of New Zealand’s highest-priority trade initiatives.

The visit builds on a period of intense diplomatic and commercial engagement between the two countries. It follows the successful visit of India’s Commerce and Industry Minister Piyush Goyal to New Zealand in November, during which substantive discussions were held in Rotorua, as well as McClay’s own follow-up meetings in Mumbai later the same month.

Since Prime Minister Christopher Luxon and McClay formally launched negotiations with Prime Minister Narendra Modi on 21 March, diplomatic momentum has accelerated rapidly.

“This will be my seventh visit to India since the election—including leading a forestry trade mission—and my fifteenth face-to-face meeting with Minister Goyal and other senior Indian Ministers,” McClay said. “The Rt Hon Winston Peters has visited India twice, and the Prime Minister led New Zealand’s largest-ever business delegation there in March.”

New Zealand has also hosted high-level Indian visits, including the President of India in 2024 and two ministerial visits this year. The increased diplomatic traffic signals a deepening economic and strategic relationship.

Urgency for New Zealand exporters

McClay says securing a high-quality FTA with India is “strongly in New Zealand’s national interest,” warning that competitors are already gaining a significant edge.

“Australia and the UK already have FTAs, and the EU is deep in negotiations. This puts our exporters at a significant disadvantage,” he said.

The impact is being felt sharply in agriculture. Before Australia signed its FTA in 2022, New Zealand supplied nearly 90% of India’s lamb imports. Today that share has fallen to about 8%, while Australia now supplies over 90%, benefiting from duty-free access. Meanwhile, New Zealand exporters continue to face 33% tariffs, causing a major loss of market share.

Economic benefits of an India deal

A comprehensive FTA could generate billions in export revenue and create thousands of jobs by granting New Zealand producers fairer access to a rapidly growing market of 1.4 billion consumers. India is forecast to become the world’s third-largest economy in the coming years, making improved trade access crucial for New Zealand’s long-term growth.

McClay says New Zealand is pushing for an ‘Australia-plus’ outcome, meaning terms that match or exceed those secured by Canberra.

“We back our farmers, growers and businesses to not only compete with, but outperform, the Australians in this market,” he said.

Trade strategy amid rising global protectionism

McClay emphasised that the Government is committed to rebuilding the economy, lifting wages, and improving living standards. Securing better access to India is central to that plan, especially as many trading partners adopt more protectionist policies.

“Many countries are increasing tariffs and putting up trade barriers. As the world does deals with India we are missing out,” he said, adding that the Government remains committed to protecting New Zealand’s sovereignty and law-making rights throughout negotiations.

The upcoming talks will focus on narrowing gaps between the two sides and securing tangible progress toward a deal that could reshape New Zealand’s trade landscape for decades.