Chris Hipkins announces Labour will back India free trade deal

The Labour Party has confirmed it will support the India free trade deal, giving National and ACT the required numbers to enact it.

The agreement - announced in December - was due to be formally signed in New Delhi on Monday but still required Labour's support to pass through Parliament, given NZ First's firm opposition.

In response, NZ First leader Winston Peters denounced the move as "madness" and a "disgraceful sellout" of the country's future.

Labour leader Chris Hipkins said the party, having now studied the text and legal advice, had agreed to come on board.

But he said he remained concerned about a commitment in the agreement to promote up to $20 billion (USD) of New Zealand private sector investment over 15 years.

In a media conference at Parliament on Thursday, Hipkins said that target was "very unrealistic" and "almost impossible" to achieve. He said Labour would not have agreed to that in negotiations.

"India have reserved the right to claw back the concessions they've granted... in the event that New Zealand businesses don't invest $20 billion US in India," he said.

"We're not going to stop the agreement proceeding because of it, but businesses need to be aware that that is a risk to them."

Labour trade spokesperson Damien O'Connor at today's briefing. Photo: RNZ / Samuel Rillstone

Labour trade spokesperson Damien O'Connor acknowledged the FTA commitment was only to "promote" that level of investment but described it as a "grey area" and "high risk".

"The difference between this agreement and previous ones is that, over time, usually trade agreements reduce the risk for New Zealand exporters and increase the benefits. This one has the potential to do the opposite, but it is... a judgement that I guess the Indians will make."

Asked about any immigration concessions, Hipkins said the deal was unlikely to increase the overall level of migration from India to New Zealand.

He said NZ First had been "downright racist" in stirring up concerns about Indians coming to New Zealand.

Hipkins reiterated his condemnation of NZ First minister Shane Jones' "butter chicken tsunami" remarks:

"That language is totally unacceptable, and there would be no place for that in any government that I lead," he said.

"Any minister engaging in that type of racism and race baiting would not be a minister in the government that I lead."

Asked whether that meant he was ruling out working with NZ First, Hipkins said NZ First leader Winston Peters had been very clear that a vote for him was a vote for Prime Minister Christopher Luxon.

"We will set out who we can and can't work with closer to the election... At the last election, I ruled out working with New Zealand First in this term... and that's unlikely to change."

Winston Peters. Photo: RNZ / Mark Papalii

In a post on social media, Peters described the free trade deal as "an utter unmitigated disaster".

"It is clear now that NZ First is the only party that cares about our own country and the only party that puts New Zealand and New Zealanders first," Peters said.

"We will continue to oppose this deal and fight against this disaster of an agreement."

Speaking later to reporters, ACT leader David Seymour congratulated Labour for coming to the party.

"Credit where it's due, the Labour Party really have put New Zealand first," Seymour said. "This free trade agreement is not going to change immigration."

Hipkins blamed National for the months-long impasse and said it had treated the process "cavalierly" and not in good faith: "We've had to... drag the information out of them that we're seeking."

Trade Minister Todd McClay told reporters he disagreed with that but did not want to get into a tit-for-tat on what was "a day for all New Zealanders to celebrate".

"They've made the right decision and I'm grateful to them for that," he said. "I'm glad that bipartisanship in trade continues."

Labour secured several concessions from the government during their discussions, including a commitment to fund an extra 14 labour inspectors focused on migrant worker exploitation, Hipkins said.

The coalition had also agreed to speed up visa processing time and to prioritise a joint National-Labour Modern Slavery Bill through Parliament, he said.

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