The prime minister and his Indian counterpart have emerged from talks in New Delhi, pledging a firm commitment to complete free trade discussions.
John Key and Manmohan Singh say they are convinced a trade deal has the potential to deliver significant benefits to both countries.
The goal is to complete negotiations by the end of March next year and the leaders say they are committed to their early completion.
However, Mr Key has said he will not be held hostage to the date and it may take longer to secure a deal that is in New Zealand's best interests.
Dr Singh told reporters that India would like to significantly expand trade and investment.
The leaders noted the complementary nature of each country's exports and that their shared expertise could help ensure food security in the future.
NZ jobs 'not at risk'
Mr Key says trade deals with Australia and China show there is no need for concern that a similar agreement with India will mean fewer jobs for New Zealanders.
The Council of Trade Unions has said it is concerned about the potential impact on the job market in New Zealand, and the labour rates and standards for workers in India.
However, Mr Key says similar fears have proved to be unfounded in the past.
"They're exactly the same concerns when we signed CER (Closer Economic Relations) nearly 30 years ago with Australia; they're the same concerns that were voiced when in 2008 we signed the free trade agreement with China.
"You look at it and you say, 'Has that actually been the result' and the answer is no. In fact, the trade imbalance with China has dramatically been eliminated."
The India New Zealand Business Council believes a free trade deal will benefit both nations. Deputy chair Prashanta Mukherjee told Morning Report any challenges can be overcome.
"We have to take a holistic view here and not just consider this as a race to the bottom, because there is a high-value goods market in India.
"In fact, we need to think about working with India to even access other markets - which some of our companies are already doing."
But the Council of Trade Unions says major concerns need to be dealt with before New Zealand agrees to a trade agreement.
Policy director Bill Rosenberg told Morning Report a deal with India would reinforce New Zealand's dependence on commodity exports.
"We will be exporting things like coal, wood in the rough, wool, butter and scrap aluminium, which have been our main exports.
"We will be importing the high valued products that India exports, such as machinery. So instead of moving towards those high value exports, it reinforces our low value exports."
