Negotiations have been launched to get a Comprehensive Free Trade Agreement across the line between New Zealand and India.
The announcement was made by both governments on the eve of a bilateral meeting between prime ministers Christopher Luxon and Narendra Modi.
“As you would have heard, we’ve had an economic breakthrough in the relationship,” he said.
The Indian government press statement acknowledged the deal would be “comprehensive and mutually beneficial”.
“It’s a really good win, it’s a great win for New Zealand,” Luxon said.
Trade Minister Todd McClay confirmed the launch of negotiations in a meeting with his counterpart Shri Piyush Goyal, India’s Minister for Trade and Investment.
“My counterpart Minister Goal and I have now met eight times, it’s my fifth visit to India to talk about our trading relationship,” McClay said.
He added that one in four Kiwi jobs rely on trade but stressed that alongside any trade agreement with India would also be “all pillars of the relationship” including political, defence, security, sporting, environmental, and people-to-people connections.
“Although we’ve had a lot to achieve over the last 15 months, the hard work starts now,” he said.
Dairy has long been the biggest challenge. 1News asked the Prime Minister if he would “guarantee” dairy would be included in a free trade agreement.
“We know there will be challenges on a number of topics for both sides as you would expect in a trade negotiations, we will work those through,” he said.
NZ-India direct flight on the horizon
As part of a building a broader relationship, a direct flight between New Zealand and India could soon be a reality with the aim of building stronger ties between our two countries as the Government continues to pursue a free trade deal.
Luxon touched down in New Delhi overnight and will today meet with Modi. It would mark the first time a New Zealand Prime Minister has visited India in almost a decade.
He’s taken with him one of the largest business and community delegations to date, which includes Air New Zealand’s top brass and the chief executives of both Auckland and Christchurch airports.
Air New Zealand chairperson Dame Therese Walsh confirmed to 1News that India was “high on our list” of future destinations.
“Air New Zealand is very much looking forward to being able to connect India and New Zealand directly in the future,” she said.
New Zealand currently welcomed around 90,000 Indians onto its shores every year.
“A lot of that is visiting friends and family, but also leisure, and so there’s big opportunity to grow that significantly from here.”
India represented a large market, with a burgeoning population of about 1.4 billion people and was fast becoming the third largest economy in the world.
It’s understood any future flights will likely be from Auckland and that a partnership agreement working together with an Indian airline is likely.
“From an Air NZ perspective, we have India really high on our list of future destinations and so there’s going to be some exciting discussions about that throughout the week,” Walsh said.
New Zealand visa system ‘broken’
Bhav Dhillon, patron of the India New Zealand Business Council, said making travel easier between the two countries would pay dividends.
“India has arrived on the global tourism stage, Indians are going to Vietnam, Philippines – everywhere – Europe, US, Canada, Australia,” Dhillon said.
However, he warned visiting New Zealand wasn’t always easy, with feedback from Indian travellers suggesting a “broken” visa system.
1News political editor Maiki Sherman reports from India. (Source: 1News)
“The thing I hear on the ground is whenever they have to apply for a New Zealand visa they’re put through so much grind that some of the millionaires, or I’m afraid to say the billionaires of India, just give up on that,” he said.
“If you ask me? Yes, the visa system, something is broken there, and New Zealand needs to fix that asap.”
A focus on dairy
Dhillon was also the managing director of New Zealand’s largest manufacturer of bagged concretes, mortars, and cements. He was the recipient of the Pravasi Bhartiya Samman, India’s highest civilian honour for non-resident Indians, for his work in trade.
Previous attempts by New Zealand to secure a free trade deal with India proved unsuccessful, with dairy viewed as a major sensitivity.
“New Zealand does not need to abandon dairy, but New Zealand needs to abandon the approach of putting dairy first,” he said.
Dhillon has been part of previous negotiations between New Zealand and India.
He said 70% of exports from Fonterra are around milk powder, which then impacts the market and therefore the value for local dairy farmers.
“You want to sell milk powder to India? Yes, we need to abandon that. But there are many other opportunities of value-added dairy products and some strategic alignment.”
Māori-India values key to relationship
India has made it clear to New Zealand that it’s not interested in a transactional trade deal, but rather a “broader” relationship.
“It has to be a holistic relationship and across all strategic areas,” Dhillon said.
The similarities between the Māori and Indian people are viewed as a unique vantage point that could lead to more opportunities.
“The Māori way and the Indian way, there’s a lot of confluence there, because they’re both more ancient civilisations.
“Indians, like the Māori, want to be friends first and do any other thing later. We need to trust each other. And so, with India, we need to develop that relationship and then trade will happen.”
Dhillon suggested the absence of a visit by a New Zealand Prime Minister since 2016, when Sir John Key led the last prime ministerial delegation, was a sign the relationship had been undervalued.
“Absolutely, I think the proof [is] in the pudding, if you’ve not been there for nine years,” he said.
“Yes, there were a couple of years of Covid-19 in between, but the world did not stop.”
