Top India trade expert advocates direct flights between India and NZ

A top India trade expert says it's time to consider direct flights between NZ and India.

Fast-growing tourism and international student arrivals from India make it time to consider direct flights between New Zealand and major Indian cities, says the visiting head of a top Indian policy think-tank, Amitabh Kant.

In New Zealand for meetings with government ministers, foreign affairs officials and business contacts, the chief executive of the National Institution for Transforming India also claims India is more than ready for a free-trade agreement with New Zealand and is just waiting for Wellington to present an offer on liberalising the services sector to allow Indian companies to compete here.

"Indians are one of the biggest outbound markets," Kant told BusinessDesk. "By 2020, we will have 50 million Indians travelling globally. They are big spenders. They like to splurge abroad."

But the absence of direct flights to New Zealand was a barrier to more Indian tourists discovering the country.

"I feel there's a need for direct connectivity," he said.

The Auckland-based India Trade Alliance backed his call, suggesting Air India should divert one of its 10 direct flights per week to Sydney and Melbourne to Auckland, New Zealand's largest city.

"By 2021, it is forecast that inbound Indian visitors for business, education and tourism will increase by 120 percent to over 114,000 visitors contributing to over 190,000 inbound and outbound passengers between the nations," said ITA spokesman Sunil Kaushal. "This necessitates the expansion of transportation services between the countries, which is not serviced by any direct carrier."

An upgraded air services agreement was signed last May during a visit to New Zealand by the Indian president, Pranab Mukherjee, giving New Zealand airlines the ability to code-share on routes to seven Indian cities, including New Delhi, Mumbai and IT hub Bangalore, but no such services yet exist.

An ITA update on the economic relationship between New Zealand and India says some 24 per cent of Indian travellers to New Zealand last year transited through Australia, another 30 per cent arrived via Singapore, 24 per cent came via Malaysia and the numbers arriving via the southern Chinese city of Guangzhou was growing very rapidly.

"The India Trade Alliance advocates and strongly urges Air India to consider re-routing one of their flights to Auckland to begin with," the update says. "With a daily passenger flow of 522 both ways, it will not be hard to fill this demand in a very short period of time. Initially these flights can be twice a week and increase based on capacity."

Kant also told BusinessDesk that fears about India's desire to continue highly protectionist policies for its agricultural and manufacturing sectors were overblown, in part because of the major economic reforms being instituted under the current Prime Minister, Narendra Modi, who was elected in 2014.

"We have opened up our economy in a very big way," he said, describing India as "the last giant economy to start its long spurt of growth".

"We believe in globalisation, despite Brexit and Trump. We don't believe in protectionism. In India's economic debate, protectionism never comes up," he said.

The New Zealand government has downgraded its efforts to achieve an FTA with India because of its unwillingness to negotiate a 'high quality' deal of the kind that would include significant opportunities for New Zealand agricultural, including dairy exports.

However, Kant - a close confidant of the Modi administration but not a government official - said the FTA was not stalled.

"We are awaiting New Zealand's offer on the services sector," he said.

In response, the Ministry of Foreign Affairs and Trade said: "New Zealand continues to actively seek progress with India, but at this time, progress will depend on what India is prepared to bring to the table, particularly with respect to goods. New Zealand is interested in agreeing a high-quality FTA."

One area of sensitivity has been the large number of Indian students coming to New Zealand, where they are permitted to work and can seek residence. Changes to English language requirements and scrutiny of Indian education brokers contributed to a 29.2 per cent fall in long-term migration from India in the year to March 31, to 13,486.