New Delhi: India and New Zealand on Monday (December 22) announced the conclusion of negotiations on a free trade agreement (FTA), but the deal immediately exposed a coalition rift in Wellington, with the New Zealand First party refusing to back it and leaving the government dependent on opposition votes to pass enabling legislation.Prime Minister Narendra Modi and his New Zealand counterpart, Christopher Luxon, announced this during a telephone conversation, with both governments portraying the pact as historic and mutually beneficial.However, almost immediately, New Zealand First leader and foreign minister Winston Peters declared the deal was “neither free nor fair” and confirmed his party would vote against it in the parliament.“This is a bad deal for New Zealand,” Peters said in a statement. “It gives too much away, especially on immigration, and does not get enough in return for New Zealanders, including on dairy.”The opposition Labour Party has indicated it would step in to salvage the legislation. Labour’s trade spokesman Damien O’Connor said his party was inclined to support the agreement despite some reservations. “From what I’ve seen this is an agreement worth supporting, while it may not be anything we wanted,” O’Connor said, adding that a deal with the world’s most populous nation was significant even without comprehensive dairy access.Prime Minister Luxon said he was confident the government would secure passage of the legislation. “We’ve seen a lot of good bipartisan support for trade across the Parliament, and we’ll continue to build the case for that,” he said, acknowledging he had tried to address New Zealand First’s objections but ultimately failed to win their support.In its readout of the call, India’s Ministry of External Affairs said the two leaders “welcomed the successful conclusion of a mutually beneficial, comprehensive and forward-looking India-New Zealand Free Trade Agreement,” adding that the pact would “open new opportunities for trade, investment and people-to-people exchanges.”Details of the agreement were outlined separately by the Press Information Bureau, which said the pact provides zero-duty access for 100% of Indian exports to New Zealand. India, in turn, has committed to tariff liberalisation on around 70% of its tariff lines, covering about 95% of New Zealand’s exports by value.The government said the agreement retains exclusions for politically sensitive sectors. “India has excluded dairy, milk, cream, butter, cheese, yoghurt, whey, casein, onions, sugar, spices, edible oils and rubber from tariff concessions,” the PIB statement said, noting that the exclusions were aimed at protecting farmers and domestic producers.New Zealand trade minister Todd McClay said that the trade agreement had a clause that would trigger automatic consultation for renegotiating dairy access if India negotiated better terms with other comparable countries. The provision could have implications for India’s ongoing negotiations with the United States and the European Union.Beyond trade in goods, the agreement includes extensive commitments in services. According to the PIB, India has secured commitments across 118 services subsectors, spanning professional services, information technology, tourism, construction and education-related services. The statement said the services chapter would “provide new market access opportunities for Indian service suppliers.”The agreement, which will be signed next year after domestic approval procedures are completed, also includes detailed provisions on mobility. The PIB said the pact facilitates the “movement of professionals, students and youth,” and provides for post-study work opportunities for Indian students in New Zealand. STEM bachelor’s and master’s graduates will be eligible for post-study work of up to three years, while doctoral scholars can stay for up to four years, with no numerical caps.The pact establishes a dedicated quota of 5,000 temporary employment visas at any given time, allowing stays of up to three years, along with 1,000 working holiday visas. The PIB said these provisions cover Indian professions such as AYUSH practitioners, yoga instructors, Indian chefs, and music teachers, as well as high-demand sectors including IT, engineering, healthcare, education and construction.On investment, the Indian government said New Zealand has committed to USD 20 billion over 15 years, covering areas such as manufacturing, infrastructure and services. The statement added that the agreement establishes frameworks for cooperation in agricultural productivity and related technical areas.In Wellington, Luxon said the agreement was concluded after nine months of negotiations and described India as a priority economic partner for New Zealand. “India is one of the world’s fastest-growing major economies, and this agreement will help Kiwi exporters compete and grow in that market,” he said in his statement.Delineating his opposition, New Zealand First’s Peters said the FTA would be New Zealand’s first trade deal to exclude major dairy products including milk, cheese and butter, which account for roughly 30 percent of the country’s total goods exports. “This is not a good deal for New Zealand farmers and is impossible to defend to our rural communities,” he said.The party also criticised what it called excessive concessions on labour mobility, arguing that New Zealand has offered far greater per capita access to its labour market than Australia or the United Kingdom did in their respective FTAs with India. Peters warned that creating a new employment visa for Indian citizens could increase migration pressures during a period of domestic labour market strain.The Dairy Companies Association of New Zealand also expressed disappointment at the limited gains for the sector. Chairman Guy Roper said the agreement joins the EU-New Zealand FTA and CPTPP as deals “with significant unfinished business to remove tariffs for the dairy sector.”“We are disappointed that India has been unwilling to deliver more than small changes,” Roper said, though he acknowledged that no country has managed to secure comprehensive dairy access from India given its protections for domestic producers.He welcomed the inclusion of a clause allowing renegotiation if India offers better terms to other countries, calling it important for maintaining parity.Despite the dairy sector’s disappointment and New Zealand First’s opposition, the agreement received strong backing from a range of other industry groups in New Zealand. ExportNZ executive director Joshua Tan said many exporters had long eyed India but were blocked by tariffs of 30 percent to 60 percent, and up to 150 percent on wine.New Zealand’s Meat Industry Association called the deal strategically significant for red meat exporters, citing the removal of a 30% tariff on sheep meat.