"I think the Prime Minister just tut-tutting and then saying, 'But look he's in another party' doesn't cut it ... He is also her minister."
The head of the Waitakere Indian Association, Sunil Kaushal, has also labelled Jones' comments racist.
When pressed on Kaushal's comments this morning, Peters said: "That was one person, what about the other 200,000," he said, in reference to New Zealand's total Indian population.
Meanwhile, Ardern defended the way she had dealt with Jones over not only his recent comments, but also past ones.
"The last time minister Jones made comments, particularly about the Indian community, I made very clear my view. I do not take lightly these matters."
She said Jones does face consequences – "but here you're asking me to take an action on an area where a member of another political party stands in direct opposition to a view that I hold. This is MMP."
Ardern said different opinions among different parties would become more prominent in an election year.
"People have a decision to make at election time over who they vote for, and those different perspectives – how they are represented in Parliament."