As India and New Zealand edge closer toward a new free trade agreement (FTA), both nations are signalling that this deal will be about far more than goods and tariffs. At the centre of the discussion lies a crucial new pillar, labour mobility, seen as a gateway to strengthening education, investment, and workforce collaboration between the two democracies.
New Zealand’s Strategic Pivot Toward India
During a joint media briefing in Auckland, New Zealand Prime Minister Christopher Luxon underscored that people-to-people connections will be a defining feature of the proposed trade pact. Joined by Indian Commerce and Industry Minister Piyush Goyal and New Zealand’s Trade Minister Todd McClay, Luxon described the relationship with India as “transformative in potential.”
“We do want to increase people-to-people relationships,” Luxon said, noting that “conversations on labour mobility will be a very important part of this discussion, as part of that FTA.”
The statement reflects a broader rethink in New Zealand’s trade diplomacy- one that seeks to balance its traditional Asia-Pacific focus with deeper South Asian engagement. India’s rapidly expanding middle class, digital economy, and skilled youth base have made it a natural partner for Wellington’s trade diversification efforts.
Education and Workforce Access: A Two-Way Bridge
Luxon also addressed one of the most dynamic aspects of the relationship- the surge in Indian students choosing New Zealand for tertiary education. With tighter visa regimes emerging in Canada and the United States, the island nation has become an attractive alternative for Indian learners seeking global exposure.
“As opportunities in America are shutting down and with Canada talking about lowering its immigration, a huge number of Indian students want to come and get educated in New Zealand,” Luxon observed.
Education has long been one of New Zealand’s biggest service exports. The push to integrate student mobility into the trade framework could institutionalize the movement of talent between both countries, ensuring smoother pathways from education to employment, and eventually, residency.
Business Visas and Skilled Worker Pathways
The Luxon government is also looking to expand business and investor visa categories, signaling that a freer exchange of skilled labour may accompany the FTA. This aligns with New Zealand’s ongoing economic need for qualified workers across technology, health, construction, and agribusiness.
“We’re very open to looking at what more we can do,” Luxon said, “but India has its own protocols around immigration settings, and it’s the same for us.”
For India, the inclusion of such clauses represents a win: it directly serves the aspirations of its global-minded workforce and the government’s broader goal of facilitating “Mode 4” trade in services, the temporary movement of natural persons, under the WTO framework.
Strategic Cooperation Beyond Trade
Luxon also emphasized that the partnership is expanding beyond economics. New Zealand sees India as a strategic ally in maintaining Indo-Pacific stability– particularly in the face of shifting regional dynamics.
“There is no way that we have prosperity for India and New Zealand without stability and security,” Luxon noted. “Like-minded countries that maintain peace and stability in the Indo-Pacific are very, very critical.”
This marks a notable evolution in New Zealand’s traditionally cautious foreign policy. The mention of defence, space, and security collaboration hints at a willingness to align more closely with India’s regional security outlook, especially as maritime routes in the Indian Ocean gain geopolitical importance.
Open Markets, Pragmatic Policies
While New Zealand continues to advocate for open markets, Luxon acknowledged the need for pragmatic solutions when it comes to agricultural sensitivities and tariff barriers- issues that have historically complicated FTA talks between the two nations.
“We don’t believe tariffs are the way forward,” he said. “We need to find a way to be pragmatic and work our way through that.”
India has also shown greater openness to trade liberalization in recent years, having signed major trade pacts with Australia and the UAE. The ongoing negotiations with New Zealand are expected to build on this momentum, with both sides expressing optimism about concluding the FTA in the near future.
Implications for India and New Zealand
For India, the emphasis on labour mobility and education is likely to create new avenues for its skilled professionals and students, while also enhancing its soft power in the Pacific. The move aligns with India’s push to make its youth a global workforce.
For New Zealand, the partnership offers access to one of the world’s largest consumer markets and a steady pipeline of skilled workers, a pressing need as its domestic labour shortages persist post-pandemic.
The FTA, if finalised, could redefine the India–New Zealand relationship from a modest trading arrangement into a comprehensive economic and strategic partnership built around people, ideas, and shared democratic values.
