NZ-INDIA TRADE NEEDS TO HIT RESET BUTTON
Last week’s India New Zealand Business Council (INZBC) summit starkly brought forth how far behind the New Zealand-India trade relationship has fallen compared to NZ’s closest neighbour Australia – or for that matter any other trading western nation.
NZ Foreign Minister Nanaia Mahuta, the sole senior NZ Government representative at the summit, while saying that this was a “momentous time in the NZ-India relationship,” also told us that India is NZ’s eighteenth biggest trading partner. Not long ago it was the eleventh. And just a few years back it was counted among the top 15.
At a time when every significant economy in the world is latching on to India’s spectacular growth story to build their respective bilateral trade volumes with India, NZ has fallen behind. This, like the near total absence of any senior government trade, investment and commerce functionary at the summit, throws up the obvious question whether NZ’s powers that be are serious about boosting trade with the world’s fastest growing economy.
INZBC Chair Earl Rattray, in his opening remarks, said it was up to business to take the lead in growing trade: business is a constant even amidst the ebbs and flows of diplomacy. While that is correct, there is no gainsaying the significant role any government plays as an enabler – as one attendee emphatically pointed out during a Q&A session.
While the pandemic would unquestionably be a factor in the more recent dip in bilateral trade ––particularly in services–– trade volumes have been stagnating for years, despite India’s growing trade with other western economies. It’s tempting to blame it on the pandemic but the downturn also presented an unprecedented opportunity, which some countries lapped up with both hands.
Australia, for instance, was active in India during the pandemic, putting in place mechanisms and arrangements for boosting trade volumes when normalcy returned. With the result, Australia and India have rebooted their ties with tariff-free trade between the two for a overwhelmingly large number of products and commodities. Australia has also rejigged its visa regime to attract both professionals and students from India.
Of course, defence ties and common interests in the Indo Pacific put the India-Australia relationship in a different league all together. Hence, comparison with Australia can only work up to a point. NZ has to carve its own story, as India’s Honorary Consul Bhav Dhillon pointed out to a commenter who compared Australia’s India approach with NZ’s during another Q&A interaction. That is indeed true, but that there is little doubt that NZ can most certainly take several leaves out of Australia’s India book.
If the NZ government’s lack of interest in the summit was glaringly obvious, the structure of the summit itself was underwhelming. Why would such an important summit as one involving India ––where every country in the world is beating a path to for a piece of the action–– be compressed into just half a day, with sessions rather light on substance?
The theme for the summit was ‘The Road Ahead’ but it felt more like peering into the rear-view mirror. We have been hearing the superlative success stories of the likes of Valocity and Quality NZ for some years now. Is that all? Are there no new chapters written or being written in the NZ-India story?
INZBC has an important role to play in lobbying with the NZ government to up its engagement beyond lip-service. It’s tiresome to hear government ministers repeatedly spout platitudes about the contribution of the Indian diaspora, which is now the second largest ethnic group and so on. INZBC must prevail upon the government to show some real intent in engaging with the India growth story.
Some recent developments hold out hope though: an INZBC business delegation has just returned from a visit to India which appears to be promising. Trade and Agriculture Minister Damien O’Connor was part of it and engaged with his Indian counterpart. It was the largest such delegation in three decades. The recent visit of an Indian External Affairs Minister after two long decades to NZ (Dr S. Jaishankar) is another encouraging sign. Hopefully, these developments will lead to a new, more exciting chapter in the NZ-India story.
In any case, the NZ-India trade relations needs to hit the reset button.