Trade Minister Todd McClay to visit India before Christmas

Trade Minister Todd McClay is off to India. Photo / Laura Smith

Trade Minister Todd McClay has said he will get on a plane to India before Christmas to visit his counterpart.

The pledge was made at the India New Zealand Business Council, in which the Government declared India as a strategic priority. On the campaign, National had said it would ink a Free Trade Agreement with India, and this is despite India openly indicating it is not keen on a deal. New Zealand officials note that India would not compromise on dairy access, while New Zealand could not conceivably agree to a trade deal without dairy.

Two-way trade with India amounts to about $2.2 billion. By comparison, two-way trade with China amounts to $40b.

“I will be working with Prime Minister Luxon and the Cabinet to ensure that we maintain a regular rhythm of engagement with India’s political leaders as a strategic priority,” McClay told the meeting.

“As a practical demonstration of this, I plan to visit India to meet my counterpart before Christmas,” he said.

McClay said he was excited by the interest India had shown in signing up to US President Joe Biden’s Indo-Pacific Economic Framework trade pillar. The IPEF is Biden’s signature economic policy for the region. India has signed up to three of the four IPEF pillars but has excluded itself from the trade pillar. Ironically, the Biden administration is now stalling on the trade pillar thanks to domestic political turbulence.

‘It seems likely New Zealand and India will become formal partners in these three agreements as they come into force in the months ahead,” McClay said.

“Encouragingly there are also promising signals suggesting India’s interest in IPEF’s trade pillar, which is basically a set of conventional FTA rules chapters.

“I gather India has been looking closely at the pros and cons of joining this pillar as the negotiation moves forward. To be clear, from a New Zealand point of view we would be keen to have India join,” McClay said.

“Encouragingly there are also promising signals suggesting India’s interest in IPEF’s trade pillar, which is basically a set of conventional FTA rules chapters.

“I gather India has been looking closely at the pros and cons of joining this pillar as the negotiation moves forward. To be clear, from a New Zealand point of view we would be keen to have India join,” McClay said.

Former Prime Minister Sir John Key launched an India strategy in 2011, of which a trade agreement with India was a key part.

During former Key’s visit to India in October 2016, he and Indian Prime Minister Narendra Modi issued a joint statement that included a commitment to work towards a Free Trade Agreement.

These talks have stalled.

Last October, New Zealand hosted India’s External Affairs Minister Dr Subrahmanyam Jaishankar on the first visit of an Indian foreign minister to New Zealand in 21 years.

Former Foreign Minister Nanaia Mahuta said following her meeting with Jaishankar that the relationship had shifted from focusing on the trade agreement, to attempting to strengthen business ties.

Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.