Three days of negotiations and meetings between New Zealand officials and exporters and their Indian counterparts have delivered some useful building blocks for greater trade between the two countries, trade consultant Stephen Jacobi says.
A joint statement issued by Trade and Export Growth Minister Damien O’Connor and his counterpart Shri Piyush Goyal outlines the positive progress made in establishing direct air links between NZ and the sub-continent. It also proposes re-stating the lucrative log trade to India, and opens the door for horticultural and agricultural collaboration.
“We are at least starting to see a few building blocks come into place,” Jacobi said.
“However, we would like to see a more comprehensive response on how the government will continue to develop this from here.”
He cautioned that despite the solid business support from the 50-strong delegation, the government is operating under tight fiscal conditions, likely to further stretch already sparse resources across the region.
He pointed out that the Ministry of Foreign Affairs and Trade “has had $35 million cut from its budget, so it is difficult to see how they will achieve all they wish. Money is tight, so what investment will the government be able to make to expand relationships?”
Delegates pointed to Australian investment in its diplomatic presence throughout India, with the states of New South Wales and Queensland having more staff in India than NZ’s entire diplomatic team across the India-Asia region.
The log trade with India, valued at $250m at its peak, collapsed when NZ banned the use of methyl bromide, India’s only approved treatment.
Ministers have confirmed efforts are afoot to find a feasible alternative to enable trade to resume in this area.
There are plans for horticultural collaboration that could include Zespri working with Indian kiwifruit growers.
A regular CEO forum between business leaders of both countries was also mooted, along with the annual joint trade committee meeting.
“It is a good idea, but they [CEO summits] are not simple, cost a lot, and take time to arrange. I would like to see a truly joined up effort with the government,” Jacobi said.
The reality of a direct air link between Auckland and New Delhi holds strong appeal, with estimates of a 40-50% increase in people travelling between the two countries.
O’Connor was positive about his meeting with Air India’s CEO during the visit. The two signed a memorandum of understanding to liberalise the route.
In June Air India confirmed orders for almost 500 new planes valued at US$70 billion ($117bn). However, NZ delegates were also aware that jet allocation is a numbers game, and the NZ-India route is tiny against high-volume continental connections.
The delegation has established valuable momentum in the relationship, something Jacobi is confident will be carried over, regardless of who forms a government after the election.
“And it is good to see five business organisations all working together, something that is quite unusual.”
Jacobi also said he was surprised at India’s level of receptiveness to NZ, and particularly welcomed support from Tapan Mazumder, the director-general of foreign trade.
“He has been extremely positive towards us.
“When everything is added up, they do not amount to a comprehensive FTA of course, but they have impact, and give confidence.”