Prime Minister John Key says he has talked to the Indian Prime Minister Narendra Modi about a free-trade agreement at the East Asia Summit this weekend in Kuala Lumpur.
Mr Key says Mr Modi is encouraging of some form of free-trade agreement.
"One of the bigger issues for us is trying to get a better relationship and that's really essential on the trade front. They are now one the major countries. They're the second most populated country in the world and we don't have a free-trade agreement with them."
With rising threats of the Islamic State (IS) after the Paris attacks, world leaders have discussed ways to prevent radicalisation.
"The Muslim countries, as indeed around the world, need to continue to make the point the Islamic State does not represent the Islamic faith, because I think that's a point that a number of Islamic leaders have made to us.
"We can continue to share information and work actively and collaboratively together and if we do that, we've got a much better chance against those potential threats."
Mr Key says there is a "huge exchange happening behind the scenes of law enforcement and the intelligent agencies", and New Zealand is responding to terror threats with the right intensity.
"I think we've got it about right. We've committed credible diplomatic resource. We're actually doing something that's making a difference. We're tackling an area where it makes sense."
He says no world leaders are talking about committing ground troops.
"Everyone, even the Russians themselves, have said it's an airstrike campaign."
The Government has send around 100 troops to Iraq to help train local soldiers to fight against IS.
Seventeen other leaders from the East Asia region, including US President Barack Obama and Australian Prime Minister Malcolm Turnbull, have attended the summit in Malaysia's capital.
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