New Zealand Prime Minister Christopher Luxon’s recent visit to India underscores a growing strategic alignment between the two nations, driven by shared economic and security interests. His meetings with Prime Minister Narendra Modi and participation in the Raisina Dialogue reflect an intent to enhance bilateral cooperation, particularly in defence and trade. At a time when the Indo-Pacific is witnessing significant geopolitical shifts—China’s increasing assertiveness, US protectionism, and reduced Western aid in the Pacific—India and New Zealand have an opportunity to forge a stronger partnership that serves their mutual interests.

One of the most significant takeaways from Luxon’s visit was the announcement that India and New Zealand will resume free trade agreement (FTA) negotiations after nearly a decade of dormancy. The proposed agreement, which Luxon hopes to finalise within 60 days, aims to expand bilateral trade tenfold over the next decade. The two countries have complementary economies, with India exporting textiles, pharmaceuticals, petroleum products, and machinery, while New Zealand primarily exports agricultural goods, minerals, and timber. However, the negotiations face hurdles, particularly concerning tariff concessions on New Zealand’s key exports such as dairy, apples, kiwifruit, and wine. India, which protects its agricultural sector, has been cautious in opening its markets to foreign farm products. Trade experts warn that while the deal could be mutually beneficial, it must be carefully structured to address these sensitivities. New Zealand’s Trade Minister Todd McClay has acknowledged these challenges but remains optimistic about expanding trade ties.

Additionally, given New Zealand’s already low import tariffs—averaging just 2.3%—many Indian products already enjoy significant market access. This raises questions about how much additional economic benefit an FTA would bring to India. Nonetheless, both sides recognise that a formal agreement would provide greater certainty and stability to businesses, fostering long-term economic engagement. Beyond trade, the Indian diaspora in New Zealand—numbering over 250,000—plays a crucial role in strengthening ties. As one of the most influential migrant communities, Indian-origin New Zealanders contribute significantly to the country’s economy and serve as a vital cultural bridge between the two nations. Their presence facilitates deeper people-to-people connections, fosters business linkages, and enhances India’s soft power in New Zealand.

Harnessing this diaspora for economic diplomacy could be a strategic move. New Zealand can leverage its Indian community to promote trade, investment, and technology partnerships, while India can use it as a conduit to expand its presence in the New Zealand market. Such an approach would not only deepen economic ties but also enhance mutual understanding between the two societies. While trade remains a key focus, Luxon’s visit also highlighted the growing importance of defence cooperation. His tour of an Indian naval vessel and his address aboard HMNZS Te Kaha in Mumbai signified New Zealand’s intent to strengthen military ties with India. Given the increasing security challenges in the Indo-Pacific, particularly China’s aggressive naval posture, closer defence collaboration makes strategic sense for both countries.

Recent reports of Chinese warships exercising in the Tasman Sea have raised concerns in New Zealand about Beijing’s expanding maritime influence. Meanwhile, India has been grappling with China’s assertiveness in the South China Sea and the Indian Ocean. With both nations committed to a free and open Indo-Pacific, deeper defence cooperation—through joint exercises, intelligence sharing, and maritime security initiatives—could be mutually beneficial. However, Luxon faces domestic criticism over proposed Defence Force job cuts, which could impact New Zealand’s military readiness. Critics argue that reducing civilian roles in logistics and maintenance could overstretch uniformed personnel, weakening operational effectiveness at a time when global security is becoming increasingly volatile. With defence spending at just 1% of GDP, New Zealand’s ability to project power in the Indo-Pacific remains limited. If it is serious about enhancing regional security, Wellington must reassess its military commitments and resource allocations.

New Zealand and India’s strategic realignment must also be viewed in the context of broader Indo-Pacific challenges. China’s influence is expanding, not just through military assertiveness but also via economic and diplomatic means. With Western countries, particularly the US, adopting a more protectionist stance and reducing foreign aid commitments, Beijing has seized the opportunity to increase its presence in the Pacific Islands. This has been evident in China’s growing infrastructure investments, security agreements, and development assistance across the region. For New Zealand, which has long been a key partner for the Pacific Islands, this shift poses a direct challenge to its influence. India, too, has strategic interests in countering China’s outreach in the Indo-Pacific, particularly in South Asia and the Indian Ocean. Together, Wellington and New Delhi can work to provide alternative economic and developmental support to Pacific nations, offering infrastructure investment, capacity-building programmes, and climate resilience initiatives.

Christopher Luxon’s visit to India marks an important step in recalibrating New Zealand-India relations. The renewed push for a free trade agreement, coupled with enhanced defence and security cooperation, reflects a shared recognition of the evolving Indo-Pacific landscape. However, challenges remain—from trade negotiations to domestic policy constraints and the shifting balance of power in the Pacific. To fully capitalise on this momentum, both nations must take decisive steps in economic collaboration, strategic defence ties, and regional engagement. In an era of geopolitical uncertainty, a robust New Zealand-India partnership could serve as one of the stabilising forces in the Indo-Pacific, ensuring that both countries navigate the challenges ahead with resilience and strategic foresight.
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Views expressed above are the author's own.

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