New Delhi’s political circles are buzzing with optimism following a pivotal endorsement from New Zealand’s Labour Party for the landmark New Zealand-India Free Trade Agreement (FTA). Congress MP Shashi Tharoor has publicly celebrated this development, calling it a ‘game-changer’ that rescues the deal from potential derailment.
The FTA, finalized last month after years of anticipation, marks a significant economic and strategic milestone between the two nations. Formal talks kicked off on March 16, 2025, culminating in a comprehensive pact that promises to reshape bilateral trade dynamics.
In a post on X, Tharoor highlighted how Labour’s official backing effectively saves the legislation for New Zealand Prime Minister Christopher Luxon’s government. This comes despite staunch opposition from coalition partner New Zealand First, which invoked a ‘agree to disagree’ clause. Labour views the agreement as a continuation of their long-standing efforts to deepen ties with India, the world’s fastest-growing major economy.
‘Deferring a deal with the fastest-growing major economy in the world would be irresponsible,’ Labour stated, expressing concerns over the ‘dairy carve-out’ that excludes key dairy products. Yet, they argue that partial progress trumps stagnation, opening doors in education, technology, and wine sectors.
To secure Labour’s votes, the ruling National Party offered political concessions, including a one-year review mechanism. This allows formal exploration of further reforms, particularly on dairy access and environmental standards.
The enabling legislation now heads to the parliamentary committee process, with expectations of passage in the first half of 2026 via a ‘super-majority’ comprising National, ACT, and Labour support. Tharoor envisions trade commencing by year’s end, emphasizing the symbolic weight of this FTA despite New Zealand’s smaller economy.
The deal eliminates 100% tariffs on Indian exports and commits to $20 billion in investments over 15 years, fortifying long-term economic and strategic collaboration. As India diversifies its trade channels, this pact signals a bold expansion of options on the global stage.
