Trade Minister Todd McClay has pushed back against NZ First leader Winston Peters' claims that immigration changes linked to the India free trade agreement would discriminate against Indian nationals, saying New Zealand First is "wrong about this" and "should stop promoting misinformation for the sake of gaining votes," according to RNZ.

The dispute broke into the open on 5 July 2026, pitting two coalition partners against each other over the implementation of an agreement McClay himself signed in New Delhi on 27 April 2026. At the heart of it is whether the visa settings Immigration Minister Erica Stanford has approved are consistent with the FTA's non-discrimination obligations — and that question cannot be fully resolved publicly because neither National nor NZ First will release the document at the centre of the row.

Peters, who also holds the Foreign Affairs portfolio, read aloud in public from a briefing he said showed officials raising concerns about Stanford's approved changes. He made four specific claims: that Indian nationals would face a labour market test not applied to citizens of other FTA partners; that they would be barred from applying for a temporary employment entry visa from inside New Zealand, an option available to citizens of comparable FTA partners; that their partners and children would be treated worse than those of nationals from other relevant FTA countries; and that time spent on a temporary employment entry visa would not count toward residency — a pathway open to citizens of other relevant FTA partners.

McClay's direct rebuttal was that New Zealand would meet its obligations under the agreement "in all senses." He confirmed some changes are being made to create a new visa specifically for India — one no other country will have access to under the existing FTA framework — but said he could not discuss the detail because ministers were still working through decisions. He pointed to the FTA's uncapped intra-corporate 'Specialist' visa channel, which carries no labour market test, as an example of what the deal actually provides Indian nationals, a point he had also made publicly in May 2026 via his Facebook page.

Stanford framed the episode differently, suggesting Peters had departed from standard Cabinet process by airing the dispute before final decisions were reached.

The procedural complaint is notable. Coalition governments regularly manage internal disagreement through the Cabinet committee system; taking a contested official briefing into the public domain before a decision is finalised is an unusual step, and Stanford's comments signal that National regards it as a breach of collective responsibility norms rather than a legitimate policy objection.

Peters' position is politically legible in its own terms. NZ First draws a significant share of its support from voters attentive to immigration levels, and the India FTA — covering a country that is already one of New Zealand's largest source nations for migrants — is an area where the party has an obvious incentive to demonstrate scrutiny. Whether that framing holds up against the actual text of the agreement is a separate matter.

The difficulty for outside observers is that the key document remains confidential. Peters says it shows officials flagging non-compliance risk. McClay says there is no reason for concern. Both claims are attributed to a briefing neither side will put on the table. McClay's public position is further complicated by his own admission that final decisions have not been made — which means the specific settings Peters described may or may not reflect what Stanford ultimately signs off on.

What is clear is the structural tension. The NZ-India FTA — signed after years of negotiation and formalised in the Joint Statement issued in New Delhi on 17 March 2025 — contains explicit commitments on the treatment of Indian nationals seeking to work in New Zealand. Any visa settings that impose conditions on Indian nationals not applied to nationals of comparable FTA partners could, in principle, attract a compliance challenge. McClay's assurance that obligations will be met "in all senses" is unequivocal, but until the final settings are published and the agreement's non-discrimination clauses can be read alongside them, the substance of Peters' concerns cannot be independently tested.

McClay also used the occasion to announce a National Party policy to prioritise seven markets for trade deals, keeping his focus firmly on the government's trade agenda rather than the coalition row.