India-NZ trade: All systems go with fresh government attention on both sides, says business council

India-New Zealand trade is expected to blossom under Christopher Luxon's new government. Photo / Hayden Woodward

The India-New Zealand relationship is likely to go “from strength to strength” under a National-led government, with encouraging signs New Zealand is now on the trade radar of the economic powerhouse, says the India-New Zealand Business Council.

Chairman Michael Fox said momentum had been building for 18 months in the relationship, which, according to a council report earlier this year, had in the past been badly neglected by New Zealand.

“We have not previously invested enough in the relationship, we haven’t paid enough attention. We haven’t had a prime minister visit India since John Key in 2016. But then we did start to see pick up at [Labour] government level, and at a business level there’s been a huge focus on advocating for improvement, culminating in the business council report and a big trade delegation to India.”

New Zealand has been unsuccessful in previous attempts to negotiate a free trade agreement (FTA) with India, the world’s fastest growing economy and soon to be its third largest. The August business delegation to India was New Zealand’s biggest.

“Two good things have happened. With the big focus by the business community, what we’ve seen from India is they are really interested in us, they see that New Zealand really does have something to offer India,” Fox said.

It had been encouraging to see Indian Prime Minister Narendra Modi’s tweet welcoming the result of the general election and Christopher Luxon becoming prime minister-elect, he said.

“But what is really encouraging is National said it would have a real focus on India [if elected], that Luxon would go to India in the first term, and that National’s trade spokesman Todd McClay was very positive about the focus on India. We will really get behind that focus.”

Michael Fox is chairman of the India-NZ Business Council and a senior executive with global kiwifruit marketer Zespri.

India’s general election process in April and May next year might slow progress down a little, but Fox didn’t believe the election outcome would set back progress.

“There’s always going to be that focus on growing their economy, on building international relationships....my expectation is the relationship is going to go from strength to strength. I think we are making positive progress.”

The business council now planned to meet New Zealand’s new trade minister - widely tipped to be McClay - to discuss the council’s earlier report “India & New Zealand: a relationship ready for its next phase”, and the Ministry of Foreign Affairs and Trade’s comprehensive response to that report.

Fox said Mfat had put a lot of work into that response but the new government would have its own ideas on how to take the India-New Zealand relationship forward.

“But what we’ve heard from National’s trade spokesman [McClay] is that there is a real focus on working with the business community on this. The incoming government will have a focus on growing the economy and it’s been clear that India is part of that focus.”

Everyone was now agreed on something the council had emphasised in its report - “the relationship with India is different to the way we’ve developed relationships with other countries”, Fox said.

“We are going to invest quite widely in the relationship, through diplomacy and things like education and immigration settings as well as business-to-business and trade links.

“I think investment in the relationship has to be across the spectrum to build a trading relationship to take us forward to a trade agreement, hopefully.”

National MP Todd McClay is widely tipped to be New Zealand's next trade minister. Photo / Andrew Warner

“We are not going to negotiate a trade agreement overnight for a couple of reasons,” Fox said.

“India has sectors it is very protective of and one is dairy. But also because the Indian economy is booming and they are negotiating trade agreements with larger economies than ours at the moment. They need to prioritise - India has a lot on its plate.

“But we are showing we can come in and support India’s objectives and their growth ambitions not just in terms of goods and services, but there are also opportunities for India to export more to New Zealand.”

The council’s report suggested Australia had left New Zealand in the dust in developing and cashing in on trade opportunities with the growing Indian economy.

Fox said Australia was a good example of a country that had prioritised a relationship with India, invested in it and worked hard at it.

“You’ve seen the outcome of that which is a trade agreement that I think covers 80 per cent of Australian exports.”

Fox believed there were more opportunities than challenges ahead in building the New Zealand-India trade relationship.

“We just need to show up. The challenge is always going to be about getting India’s attention - it’s a very large economy. What we’ve seen from the trade delegation there is interest in New Zealand.”

This was underlined in India’s successful moon landing in September. Innovations by two New Zealand companies, Rakon and RocketLab, featured in the mission in a good demonstration of what this country had to offer India, Fox said.

Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.