Prime Minister Christopher Luxon has rejected Winston Peters' claim that the government designed discriminatory immigration settings into New Zealand's free trade agreement with India.

The accusation

Foreign Minister Peters accused National of quietly introducing discriminatory immigration changes in the India FTA. He said he had obtained a document showing Immigration Minister Erica Stanford had signed off on changes that officials had warned would be more restrictive in a manner specifically targeting India.

Peters argued the changes could damage the bilateral relationship with India and harm New Zealand's international standing.

Luxon's response

The Prime Minister dismissed the allegation, saying the India FTA will have distinct immigration provisions compared to other trade agreements, but that this reflects standard practice.

"Every deal is different," Luxon said. "Different access is negotiated, and in this case, as there is with all of them, there's a new visa negotiated under a new FTA."

He said the government followed normal Cabinet processes for the immigration settings and that "it's very normal that the Minister of Immigration imposes bespoke conditions on any FTA visas that are negotiated, quite normal".

Luxon said both governments were satisfied with the deal and accused Peters of playing politics over an agreement the Foreign Minister opposes.

"I think it's very easy to indulge in some anti-immigration politics, and the reality is, this is a country that has legal immigration," Luxon said. "I get it's easy politics, it's just wrong."

Contradictory positions

The Prime Minister highlighted what he called contradictions in Peters' stance, noting the Foreign Minister had recently complained about high levels of Indian immigration but now appeared to be arguing for fewer restrictions.

"On the one hand, he said few weeks back, oh we've got way too many Indians coming into the country, and now we're saying we haven't got enough," Luxon said.

ACT raises UNDRIP concerns

Separately, ACT leader David Seymour criticised Trade Minister Todd McClay over a clause in the India FTA that references the UN Declaration on the Rights of Indigenous Peoples.

The agreement includes a provision affirming both countries' respective positions on UNDRIP. Seymour called this one of several "fish hooks" unrelated to trade.

He claimed the clause had been inserted by officials without the approval of either government. "We relied on Todd McClay to say that we're not doing any extraneous stuff around the Treaty in this free trade agreement, he assured us we weren't, and it turns out we were," Seymour said.

He called for future trade ministers to ensure agreements remain "just a free trade agreement, not someone else's political project or a vehicle for it".

Labour backs deal despite coalition tensions

Labour's trade spokesperson Damien O'Connor accused both New Zealand First and ACT of disloyalty.

"David Seymour, like Winston Peters, is just making politics of an agreement that has huge potential," O'Connor said. "On balance, Labour believes it's worth signing. It's not perfect, but for them to play politics is simply disloyal to our country."

On the UNDRIP clause, O'Connor said New Zealand respects the declaration but is not bound by it, and that the government's position has remained unchanged.

Labour and ACT both support the India FTA, while New Zealand First has refused to back it.