The Front Page: Why New Zealand will struggle to get a free trade agreement with India

India is already the sixth largest economy in the world and it's still growing fast. Photo / Getty Images

Politicians across the political divide are promising to strengthen New Zealand’s relationship with India.

Both Labour and National are vowing to make business delegations and trade deals with the world’s most populous country.

While these ambitions are bold, Dev Nadkarni, editor-at-large for Indian Weekender and a consultant to business councils in both Australia and Aotearoa, tells The Front Page podcast that New Zealand may struggle to strike a comprehensive trade deal with India.

“When the External Affairs Minister of India was here last September, he suggested we don’t go after an all-encompassing trade treaty, like an FTA,” recalls Nadkarni.

“He said: ‘Why don’t we look at bilateral sectoral agreements… which would be of mutual interest to both countries instead of an overarching agreement where there would be so many points of contention.”

Nadkarni says that no one has been able to make a comprehensive agreement work in 30 years and that India isn’t necessarily going to be interested in New Zealand dairy.

“India is not quite interested in New Zealand’s primary industries, because India is the largest dairy producer and it’s also a net agriculture exporter,” Nadkarni says.

Nadkarni says that a more viable alternative would be looking at all the ways that New Zealand agricultural and dairy tech could be employed in India.

“India produces so much milk that it’s not really interested in importing powder from any other country. But India might be interested in learning how to transport milk, for example, or how to store it, or how to make cool products with milk – all of which New Zealand is good at.”

Nadkarni says that Aotearoa would be better suited looking at the example of Australia, which has made huge strides in its relationship with India in recent years.

“Australia also do not have an FTA. Although lots of people call it an FTA, it’s a misnomer. They also have a [Comprehensive Economic Cooperation Agreement] – where duty is waived on something like 90 per cent of goods. This makes Australian exports to India cheaper than New Zealand. For example, meat from here is 30 per cent dearer in India than Australian meat simply because they’ve got the CER.”

For Nadkarni’s full take on these topics and more, listen to the full episode of The Front Page.

The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. It is presented by Damien Venuto, an Auckland-based journalist with a background in business reporting who joined the Herald in 2017.

You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.