Prime Minister Christopher Luxon is sticking by his commitment to secure a free trade deal with India.
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Prime Minister Christopher Luxon is sticking by his commitment to secure a free-trade deal with India as he prepares to make an official visit to the subcontinent.
Luxon maintains the lofty promise he made in the 2023 election campaign to finalise a deal within his first term in Government remainshis position, however, he characterises the “real commitment” as deepening trade relationships with a country expected to possess the world’s third-largest economy in the next decade.
Speaking at his post-Cabinet press conference today, Luxon confirmed he would leave New Zealand on Sunday and travel to India, honouring the invitation extended by Prime Minister Narendra Modi while the pair attended the East Asia Summit (EAS) in Laos.
He would be accompanied by ministers Todd McClay (trade), Louise Upston (tourism) and Mark Mitchell (ethnic communities), as well as a delegation of business and community figures who would combine to form one of the largest-ever PM delegations.
Luxon will spend several days in Delhi and Mumbai where he will have an official bilateral meeting with Modi alongside meetings with Indian business leaders.
He was also set to give the inaugural address at the Raisina Dialogue, India’s premier geopolitics forum. It was understood Modi’s offer for Luxon to give the address was the first for any leader outside Europe.
Prime Minister Christopher Luxon announced his trip to India at his post-Cabinet press conference on Monday. Photo / Mark Mitchell
Trade would play a central role in Luxon’s discussions with Modi and other senior officials, having promised ahead of the 2023 election he would secure a free-trade deal with India in his first term.
Formal negotiations were last held nearly a decade ago. Dairy was a key point of contention, described as a “sensitive area” by Luxon, given it was New Zealand’s major export and India’s strong agricultural sector.
Asked whether he stood by his promise, Luxon said the “real commitment” had been to deepen trade relationships.
“We’re going to do everything we can to push trade really, really hard,” Luxon said in a joint media interview on Sunday.
“What I’m looking for is just a much more comprehensive economic partnership and how we’d move that forward, so yeah, you’ll have to wait and see.”
Luxon dismissed any suggestion his comments indicated a retreat from the original promise.
“I don’t want you reading anything into that to say that it’s not going to happen but I am determined that we are going to change the trading relationships with India big time.”
He cited the higher tariffs New Zealand wine and apple exporters faced in comparison to their Australian counterparts, while arguing concerns about dairy shouldn’t discourage trade-deal efforts.
“There’s no doubt about it, [dairy] will be a very difficult part of the conversation and it’ll be hard ... but that’s not a reason to shy off and just say that’s a market we turn off when it’s going to be the third-biggest economy in the world, very, very shortly.
“It’s just insane to me that you just wouldn’t try.”
Luxon’s comments about Indian trade were laced with criticism of the previous Labour-led governments, which he claimed had “given up” on securing a deal.
Trade Minister Todd McClay has met with his Indian counterpart several times. Photo / Mark Mitchell
He referenced the roughly $2 billion of two-way trade and how it was dwarfed by $40b worth of trade with China, despite the two countries having similar populations. He also lamented how only 1.5% of New Zealand exports went to India.
Having visited India several times in his former role with Unilever, Luxon said he saw trade opportunities improving as Indian communities became more wealthy amid a widespread transition from low-income to middle-income wages.
“Those citizens now don’t have worries about where their house is or what they’re going to be eating tonight, they’re actually saving for their retirement, they’re sending their kids off on education, they want to travel more and that’s a huge opportunity for us.”
Luxon’s position on defence and geopolitics would take centre stage at the Raisina Dialogue, held in New Delhi next week.
Regional security within the Pacific had been a prominent issue in recent weeks amid China’s warships travelling in the Tasman Sea and the recently inked deal between China and the Cook Islands, which shocked New Zealand.
The Government was also set to unveil its Defence Capability Plan in the coming weeks, which would outline New Zealand’s defence spending for the next 15 years.
Luxon described India as “one of the big guys” with the fourth-largest military spend globally. He believed India was “very aligned” with New Zealand concerning Indo-Pacific security and suggested the two countries could conduct more joint defence exercises together.
Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.
