NZ First Withdrew Support For India FTA, McClay Confirms
New Zealand Trade Minister Todd McClay has confirmed that New Zealand First withdrew its support for the India free trade agreement (FTA) before the deal was officially concluded, intensifying tensions within the governing coalition.The confirmation follows public disagreements between National and NZ First, after party leader Winston Peters claimed the proposed agreement could lead to “tens of thousands” of people arriving in New Zealand and taking opportunities away from locals. Prime Minister Christopher Luxon firmly rejected the claim, stating Peters was “wrong” and reiterating that the agreement does not undermine New Zealand’s immigration controls.Appearing before a Parliamentary select committee, McClay clarified that the government had agreed to a limited provision under the proposed FTA involving a temporary three-year work visa for up to 1,670 Indian nationals across specific green list categories. He stressed that the arrangement does not offer residency rights, extensions, or automatic pathways for family members.“These individuals can work in New Zealand for three years and must return home at the end of that period,” McClay said, adding that the agreement does not restrict the government’s ability to change immigration settings in the future.Speaking later to RNZ, McClay confirmed that NZ First had pulled its backing before the agreement was finalised and announced. While he declined to specify exactly when National became aware of NZ First’s position, he said the issue was handled through Cabinet discussions using the coalition’s “agree-to-disagree” process.The withdrawal of support has political implications for the deal’s future. As the India FTA will require amendments to the Tariff Act, National will need Labour’s backing to pass the legislation in Parliament. Labour has acknowledged ongoing internal discussions around immigration and investment aspects of the agreement.McClay said he remained optimistic that Labour would ultimately support the deal, emphasising its importance for exporters, businesses, and New Zealand’s Indian community. Meanwhile, the Taxpayers’ Union has called on the government to release the full agreement documents to allow public scrutiny and clarity around the coalition’s dispute.