Next week, New Zealand will dispatch one of its most extensive prime ministerial delegations to India as part of a concerted charm offensive aimed at strengthening trade and security relations with the rapidly expanding economic powerhouse.
Prime Minister Christopher Luxon made the announcement during his post-Cabinet media briefing on Monday afternoon that he would be departing on Saturday for a four-day excursion to Mumbai and Delhi.
While in India, Luxon will deliver the inaugural address at the Raisina Dialogue, the country’s foremost defense and security dialogue, and will also meet with Prime Minister Narendra Modi.
Luxon stated to the media that he was resolute in his commitment to forge a more comprehensive relationship with India, the world’s most populous nation, which is on course to become the third largest economy by 2030.
“They are, indeed, one of those multipolar leaders in the world now… it’s the fourth largest military spending country,” according to Luxon.
“It’s got a rapidly rising middle class, which creates huge trade opportunities… sadly, only 1.5 percent of our exports are actually going into India, as it currently stands today.”
Luxon stated that the relationship had been largely “non-existent” before the coalition assumed power, and that “we have had to start from scratch.”
Damien O’Connor, the former trade minister and current Labour trade spokesperson, denied that his party had neglected the India-relationship. He informed RNZ that the pandemic had limited travel opportunities.
Deal or no deal?
Luxon’s obligations are substantial following his pledge to negotiate a free trade agreement with India during his inaugural tenure during a 2023 election debate.
The deadline has been deemed “completely unrealistic” by the opposition, and formal negotiations have not yet resumed.
When questioned about the vow, Luxon maintained his adherence to it; however, he characterized his “true commitment” as one to fortify the trade relationship.
“What I’m looking for is just a much more comprehensive economic partnership and how we can move that forward,” Luxon pointed out.
“It’s about momentum… you don’t just go straight from zero, or even behind, with no relationship with India, to just walking through the front door and saying, you know, I want to have a deeper trade relationship.”
As it was during the most recent sessions of trade negotiations between 2011 and 2015, the dairy sector will be one of the most significant impediments to progress.
The dairy industry in India is primarily dominated by small-scale rural farmers who are apprehensive about the potential disruption caused by the industrialized producers of New Zealand.
It is conceivable that New Zealand could emulate Australia’s approach and negotiate a “early harvest” agreement that excludes dairy products, instead concentrating on other sectors.
Luxon expressed his disagreement with the previous administration’s assessment that pursuing a dairy-free agreement was not worthwhile.
[Dairy will] be a very challenging aspect of a discourse, and it will be exceptionally challenging. However, this is not a valid justification for disregarding the market and declaring it to be uninteresting, as it is poised to become the third largest economy in the world in the near future. It is simply absurd to me that you would not make an effort.
The security stakes
Luxon’s visit to India is also occurring in the context of New Zealand’s concerns regarding China’s increasing assertiveness in the Indo-Pacific region.
Last month, China sparked concern by dispatching three navy vessels to the Tasman Sea to engage in live-fire exercises.
Luxon informed the media that he believed India to be “very much in alignment” with New Zealand’s perspective on security and stability in the region.
He stated that New Zealand must engage in a greater degree of cooperation with India as a security and defense partner.
“There’s a lot more that we can do in a defence joint exercises, visits, a whole bunch of different things that we can do in that space.”
Although India was likely to sympathize with New Zealand’s concerns regarding China, there would be less agreement regarding the conflict in Ukraine. India has maintained a largely neutral stance and has never expressed any criticism of Russia’s comprehensive invasion of Ukraine.
Luxon was confident that the conflict would be addressed during his conversation with Modi, during which he would explicitly state New Zealand’s stance: “We will not be changing.” Ukraine is our ally.
