Authors: Rahul Mishra & Prisie L. Patnayak*
Prime Minister Christopher Luxon’s five-day visit to India (16–20 March), including his role as chief guest at the prestigious Raisina Dialogue, signalled a renewed commitment to elevate New Zealand–India relations. Marked by the signing of five cooperation agreements—in defence, education, sports, horticulture, and forestry—the visit also reignited discussions around a long-stalled Free Trade Agreement (FTA), hinting at a shift from symbolic diplomacy to more tangible engagement.
India and New Zealand formalized diplomatic ties in 1952, with early gestures of goodwill such as New Zealand’s 1 million NZ dollar contribution to establishing the All India Institute of Medical Sciences (AIIMS). However, bilateral relations faltered after India’s 1998 nuclear tests. Over the last decade, however, evolving geopolitical dynamics have opened avenues for realignment. The Indo-Pacific’s strategic centrality, China’s growing strategic footprints in the South Pacific, and India’s ascent as a key economic and security actor have created mutual incentives for both nations to reinvigorate their ties.
Trade: Persistent Challenges, Renewed Political Will
Trade remains the linchpin of New Zealand’s foreign policy, especially given its relatively high per capita GDP within the Indo-Pacific. Negotiations on an FTA with India, launched in 2010, were shelved in 2015 due to some differences—especially regarding agricultural protections. India’s longstanding reluctance to liberalize dairy imports, aimed at shielding small-scale farmers, has clashed with New Zealand’s desire to expand its access to one of the world’s largest consumer markets.
Yet, the current global trade climate—characterized by protectionist pressures, Trump’s tariff war on friends and rivals alike, shifting alliances, and the search for dependable partners—has reinvigorated New Delhi’s interest in strategic trade arrangements. India’s re-engagement in FTA negotiations with the UK, EU, and Ireland, and its push to finalize a bilateral trade pact with the US, reflects a recalibration of its trade diplomacy. Commerce Minister Piyush Goyal’s recent call for Indian exporters to abandon a “protectionist mindset” signals a broader policy pivot, albeit one still grounded in domestic sensitivities.
The resumption of India–New Zealand FTA talks is an extension of this recalibration. Despite expectations that dairy will remain excluded, Luxon underscored New Zealand’s determination to keep the issue on the table. “We are going to try and find a way to make dairy work,” he stated, indicating that while compromise may be difficult, negotiation fatigue is not an option.
Security and Strategic Cooperation: A Quiet Yet Growing Front
While trade disputes often dominate headlines, strategic and defence cooperation has emerged as a quietly growing pillar of the relationship. With shared concerns over maritime security, supply chain resilience, and China’s regional assertiveness, India and New Zealand are increasingly aligned on Indo-Pacific security priorities. The decision to institutionalize defence cooperation and develop an industry roadmap reflects a strategic deepening that moves beyond ad hoc naval engagements—such as their collaboration in Combined Task Force 150.
New Zealand’s support for India-led regional initiatives, including the Indo-Pacific Oceans Initiative (IPOI) and the Coalition for Disaster Resilient Infrastructure (CDRI), further reflects converging strategic outlooks. These platforms offer opportunities for pragmatic collaboration in areas such as climate adaptation, infrastructure resilience, and humanitarian assistance—fields in which New Zealand has niche expertise and regional credibility, particularly through its Pacific Reset Policy.
Mobility, Migration, and the Challenge of Infrastructure
People-to-people linkages are another key driver of bilateral ties. New Zealand faces critical labour shortages and has actively turned to India—the leading source of skilled migrants and the second-largest provider of international students—to fill these gaps. Notably, New Zealand has absorbed more Indian migrants per capita than traditional destinations like Canada or Australia. Yet, logistical constraints such as visa processing delays and the lack of direct air connectivity have dampened the potential of this partnership. The launch of negotiations on professional mobility suggests a willingness to address these barriers, though implementation remains a challenge.
Political Sensitivities: The Khalistan Issue as a Diplomatic Flashpoint
Not all aspects of the bilateral relationship are cooperative. The spectre of separatist politics—particularly the activities of pro-Khalistan groups—continues to strain ties. India has expressed its unease following a 2023 Khalistan-related referendum in Auckland, organized by Sikhs for Justice (SFJ). While PM Luxon reiterated New Zealand’s commitment to free speech, India has grown wary of how diaspora activism could complicate diplomatic engagement. The fallout from similar tensions with Canada—where trade negotiations were suspended after the assassination of a Sikh separatist—serves as a cautionary tale for Wellington.
Conclusion: Strategic Patience, Pragmatic Engagement
The recent flurry of activity marks a promising chapter in New Zealand–India relations, but the path ahead will demand strategic patience and pragmatic compromise. The potential for expanded trade, robust defence cooperation, and deeper people-to-people ties is considerable. Yet, entrenched domestic interests, unresolved sensitivities, and third-party geopolitical influences will continue to shape the trajectory of this partnership.
In a multipolar Indo-Pacific, New Zealand and India have much to gain from treating each other not just as trade partners, but as strategic collaborators in a region where economic prosperity and security are increasingly intertwined.
*Prisie L. Patnayak is a doctoral candidate at the Centre for Indo-Pacific Studies, School of International Studies, Jawaharlal Nehru University, India. She can be reached at prisie33_isn[at]jnu.ac.in X handle: @prisie_l
