In short, we are too small for Indian politicians to expend political capital on.
During the election campaign, Prime Minister Christopher Luxon promised a free trade agreement (FTA) with India boosting mutual benefits from the current $1.7 billion in trade. Great idea! Except for the small problem that the main things we want to export – red meat and dairy – are not widely consumed in the Hindu-majority nation.
Besides, Indian politicians do not want to get on the bad side of the country’s heavily protected farmers. Australia’s FTA with India, signed in 2022, doesn’t include agriculture.
We’re just not going to get the kind of comprehensive FTA we have with China from a country that imported just $30 million of dairy products last year. And, besides, what can we offer in return?
Our Government’s removal of tariffs on all manner of things was lauded by economic theorists amid the expectation other countries would reciprocate. But they didn’t. Our trade officials squeaking meaningfully of the benefits of liberalised world trade are usually met by the roars of opposition from other countries’ farmers. We gave away our bargaining chips for free.
Indian officials have been clear – any trade deals must be mutually beneficial, and the thing India most wants from New Zealand is a relaxation of immigration rules. The Government is likely to find that hard to agree to when they are already talking about dampening immigration, which is running ahead of our capacity to build new housing, public services and infrastructure.
Let’s think smarter about how India and Aotearoa can help each other. Tech is surely an area where more co-operation is possible. Opening our tertiary institutions to more Indian tech students is one step - so is exporting our educational IP to India, where they are keen to develop an export education industry of their own. And it’s a benefit that can go both ways. Aotearoa can learn a lot from the skilled and ambitious Indian tech sector.
Rather than swinging for a comprehensive trade deal that’s not going to happen, let’s focus our diplomatic efforts on targeted agreements in certain sectors, like the digital economy.
Let’s also take this as a sign we need to get serious about re-balancing our country. We’re running out of new markets for our meat and dairy – not to mention, we’re running out of land and water to farm the animals too.
The multi-billion dollar question is: do the Ministry of Foreign Affairs and Trade (MFat) and the farming lobby understand times have changed? It’s not about free-market purity, it’s about political pragmatism and, increasingly, sustainability. Fonterra cannot insist every trade deal delivers wins for them. We need to diversify.
And we need to understand that our customers, even in “developing” countries like India, are increasingly concerned with the climate impact of the things they buy.
We’re not going to get rich in the 21st century by trying to squeeze ever more production out of our increasingly exhausted whenua.
It’s easier said than done, of course, and governments have tried to upgrade New Zealand’s potential in the past, from Muldoon’s “Think Big” to Clark’s “Knowledge Wave”. But now, it seems the Government has given up on economic development entirely. Instead, it’s focused on backwards stuff like restarting live animal exports, praying for a big oil discovery and giving landlords tax cuts.
If there’s one thing I’ll take away from India, it’s that the world is changing fast and, in this world, you make your own luck. We can take our chances to be part of that change or we can stick to our old ways and get left behind, and we’ll only have ourselves to blame.
As Gandhi once said: The future depends on what we do in the present.
Fa’anānā Efeso Collins
E te pitau whakarei, o te waka o te motu, te waka tangata to waka wairua ki te kapunipunitanga o te kahui ngaro, kei tua o tawauwau. Kei te tino tangi te ngakau mou o to wehenga atu, kia kore e mimiti te aroha mou e hoa. Hoea ra, hoea ra, haere atu ra.
Revered leader, paddle your waka of nations, waka of people, your spiritual waka to the place of spiritual divide, I am saddened by your abrupt departure you have left me overwhelmed with grief. My love for you dear friend will never wane. Paddle your waka, farewell.
