Can Christopher Luxon deliver his election promise of getting a Free Trade Agreement (FTA) with India? Can he ensure Kiwi dairy farmers tap into the world’s biggest consumer market? Can he secure a direct flight between India and New Zealand? Can Luxon do this, can Luxon do that? Surely, the prime minister is expecting these questions as he prepares to visit India next week. And, truth be told, there is no easy answer. But let’s not get ahead of ourselves.
Before we gaze into the future, we must first look back. It’s been nearly nine years since New Zealand so much as lifted a finger to do something meaningful with India. Yes, the Labour government sent trade missions to India between 2017 and 2023. But they lacked a long-term vision—a real plan to build lasting relations with India.
The piecemeal approach to trade got New Zealand nowhere. A senior foreign official from that time put it succinctly: the two countries weren’t speaking the same language. New Zealand was focused on trading goods, whereas India sought a broad-based relationship stretching beyond just trade. It’s no wonder those conversations fizzled out.
Former foreign minister Nanaia Mahuta sealed the deal—or rather, undid it—when, sharing the stage with her Indian counterpart S. Jaishankar in 2022, she said pursuing an FTA with India wasn’t a government priority. That was the diplomatic equivalent of shutting the door in India’s face.
It’s nothing short of a feat that Luxon has managed to secure a seat at the table with India to start talking about the future of bilateral relations. A quick glance at the economic big picture tells you why this is so crucial.
In 2023, for every $100 New Zealand traded globally, India accounted for just $1.30. That’s embarrassingly low, especially for a country so dependent on overseas markets. New Zealand’s economy is an export-driven one, with 70 per cent of its exports being goods, nearly 60 per cent of which come from agriculture—dairy, meat, forestry, and seafood. The country’s agricultural industry, in particular, would be in dire straits without strong export markets, given that 90 per cent of its produce is shipped overseas.
Now, look at India. A government official recently pointed out that if New Zealand were to export all the dairy it produces—not just what it currently exports, but every ounce of milk produced—it would still meet only about 10 per cent of India’s dairy needs. That statistic alone illustrates the sheer potential India’s market holds for Kiwi products. The question is not whether India is willing to open its market to New Zealand. The question is: for a country of its size, is India even willing to spend time exploring that possibility?
That Luxon has gotten this far speaks volumes—not just about his commitment to India, but also about his relatively strong grasp of how to deal with India. Unlike his predecessors, Luxon has experience working with Indian stakeholders from his time at Unilever. He understands that New Zealand’s offerings alone won’t cut it—it will take political capital to make things happen. Trade doesn’t happen in a vacuum; people trade with people. By prioritising relationship-building ahead of transactional trade discussions, Luxon is playing the long game—one that New Zealand politicians should have engaged in much sooner.
So, what outcomes can we realistically expect from Luxon’s visit? He certainly can’t go down in history just for showing up in India. He needs to move the needle. He insists that securing a Free Trade Agreement is a priority within his current term. That goal, while ambitious, won’t materialise overnight. But laying the groundwork? That’s entirely within reach. And moving the needle toward an FTA—setting up the right framework and showing genuine commitment—would be a win in itself.
We can also expect to see several sectoral agreements emerge from this trip. India is keen to collaborate in space technology, renewable energy, and advanced agritech—areas where New Zealand has expertise to offer. These agreements might not be as headline-grabbing as an FTA, but they are the building blocks of a more robust economic relationship. And, crucially, they signal to India that New Zealand is serious about engagement beyond just dairy and meat.
Luxon’s trip to India isn’t just another diplomatic tour—it’s a recalibration of a relationship that has long been neglected. The real question isn’t whether he can sign an FTA on this visit. The question is whether he can convince India that New Zealand is finally ready to take this relationship seriously. If he succeeds in that, then this trip will indeed be a big deal.
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