Unlocking India and New Zealand’s trade potential
Updated: Jul 17
Cover Feature: INZBC India report 2023
INZBC duly acknowledges the DUCO Consultancy as knowledge partner for this report.
The India New Zealand Business Council (INZBC) released a discussion document suggesting a new approach to strengthening India-New Zealand trade relations. The document, “India & New Zealand, A Relationship Ready for Its Next Phase,” indicates a shared consensus amongst the business community that a stronger partnership with India is crucial for New Zealand’s economic future.
The report has been made after extensive industry consultation and with the support of contribution of Knowledge Partners for this report - Duco Consultancy. Duco consultancy is a professional, proficient and pragmatic consulting and services company that currently operates across three continents, in the following countries: New Zealand, Australia, USA and India.
As India is poised to become the world’s third-largest economy with the world’s largest national population, the report stresses the importance of enhancing trade ties and recognizing India’s growth potential. Despite efforts spanning 15 years, conventional trade agreements, including through the RCEP, have not been fruitful.
The INZBC advocates a fresh perspective, taking cues from Australia’s successful bilateral relationships, where formal trade agreements are an outcome, not a precursor. It also emphasizes the role of New Zealand’s Indian community, which forms 5% of the population, in fortifying these connections.
The council calls for making India a diplomatic priority, maintaining momentum in diplomatic activity, and focusing on dialogue and trust to foster trade and investment. The report aims to mobilize leaders from various sectors, emphasizing the urgency of an integrated approach towards India to avoid being sidelined in the shifting economic and geopolitical landscape.
A key point made by Minister Jaishankar in his recent visit to New Zealand was that a strong relationship with India will require strong business foundations. INZBC believes these strong business foundations must include:
A focus on India’s needs
INZBC stresses the need for understanding India’s economic and social goals to align with New Zealand’s business and diplomatic priorities. Trust-building is critical for New Zealand’s exporters due to India’s relationship-centric business culture. Identifying mutual interests can foster trade relationships. At the INZBC Summit 2022, India’s High Commissioner, Neeta Bhushan, advocated for closer collaboration between India and New Zealand across various sectors. She also outlined plans to enhance bilateral ties in areas including connectivity, tourism, and education. The INZBC advises recognizing India’s diversity across its 28 states and 8 Union Territories. Several New Zealand firms have successfully penetrated the Indian market, contributing to foreign direct investment, employment, and economic growth. However, businesses alone can’t achieve necessary recognition and trade barrier relaxation.
Adopting a public/private approach to the India challenge
Building strong ties with India requires a coordinated and sustained effort from both the public and private sectors, according to the India New Zealand Business Council (INZBC). Government visibility and its tacit endorsement of businesses play significant roles in achieving success in India. As per ExportNZ, there needs to be an “all-hands- on-deck” approach involving the business community and government in forming a broad-scope strategy. The Auckland Chamber of Commerce highlights that the lack of sustained effort by New Zealand businesses and Government could limit the potential benefits from India. INZBC suggests that despite potential constraints on public spending, existing diplomatic funding and resources should prioritize the relationship with India. Effective use of these resources requires a joint effort from senior political, business, and public-service leadership.
A New Approach to trade engagement: Collaborating for mutual benefit
The council advocates for a new approach to trade engagement with India, centered around mutual benefit. This requires a collaborative model spanning government, business, cultural, and academic levels. Direct investment in India can enhance New Zealand’s manufacturing and service sector growth. While a Free Trade Agreement (FTA) remains the gold standard for trade relations, its absence doesn’t preclude progress in trade relations. Developing these relationships necessitates understanding India’s needs, patience, and a long-term view of opportunities. Some New Zealand industries, like kiwifruit, premium lamb, and horticulture, already work alongside Indian counterparts to mutual benefit. With India’s financial technology evolving rapidly, New Zealand should align with India’s Universal Payments Interface (UPI) that’s becoming a global standard. The success of Australia’s tailored FTA with India underscores the importance of careful collaboration across diplomatic, cultural, and commercial fronts.
Establishing the right forums and connections to concentrate and co-ordinate strategic thinking
The council emphasises the need for strategic thinking and connections between India and New Zealand to strengthen trade relations. Existing business groups play a crucial role in building commercial networks. Collaborations with prominent Indian entities will enhance strategic alliances.
INZBC proposes the creation of a dedicated India-New Zealand Leadership Forum, modelled on the Australia New Zealand Leadership Forum. This platform would bring together stakeholders from both countries to optimize bilateral trade efforts. It should have a dedicated secretariat, prioritized for resourcing, to drive strategic relationship building. The forum could be built upon the existing Joint Trade Council model proposed by MFAT. Participating in international platforms like the International Solar Alliance can also foster connections. A significant boost to people-to-people relations would be establishing a direct air service between the two nations, requiring the concerted effort of government and business leaders.
INZBC recommendations to the New Zealand Government –
INZBC India report provides a comprehensive plan to improve trade relations between New Zealand and India. The recommendations in the report are both strategic, like the above, and tactical suggesting immediate and near-term actions.
*Develop a Long-Term Strategy: INZBC emphasizes the importance of proactive engagement and long- term strategic planning. They suggest a detailed understanding of India’s economic, cultural, and geostrategic influence and potential opportunities for New Zealand.
*Combined Effort: A public-private partnership is recommended for fostering common goals. INZBC suggests establishing an India-New Zealand Leadership Forum, involving major trade stakeholders from both countries.
*Strengthen Relationships: Recognizing the significance of strong bilateral ties, INZBC calls for prioritizing diplomatic investment in India, extending ministerial visits, reallocating resources, and improving ‘India- capability’ of institutions and businesses.
*Practical Actions: INZBC recommends a target to double two-way trade within five years and focus on ‘easy wins’.
*Tourism and Immigration: Suggested actions include faster processing of tourist visas, longer visa validity periods, and a review of immigration policies to make it easier for Indian nationals to settle in New Zealand.
*Education: Proactive encouragement of Indian students to study in New Zealand is suggested, with initiatives like a targeted fee structure or rebate, faster student visa processes, internships, scholarships, and specialized professional and trade training.
*Primary Industries: Programs to address skilled seasonal labour shortages in horticultural sectors are recommended, as well as addressing phytosanitary issues impacting the forestry sector.
*Finance Sector: Strengthening financial cooperation with India is proposed, including understanding and facilitating the international accessibility of India’s banking systems.
*Awareness: Facilitation of a dedicated India-New Zealand Centre of Excellence (CoE) is suggested, focusing on research that aids in understanding the diverse needs of the Indian environment and commercial, tax, and employment regulatory settings.
*Cultural and Aid Diplomacy: Recommendations also include cultural and aid diplomacy initiatives like inviting the President of India to visit New Zealand and developing a major cultural exhibition highlighting Māori art.
Overall, the INZBC underscores the need for quick, decisive actions with practical and measurable steps for the improvement of trade relations between New Zealand and India. They emphasize understanding India’s perspective, strengthening relationships, and actin strategically. They propose public-private partnerships and improving India-capability as key factors in fostering this relationship. The recommendations show an understanding of the
multifaceted nature of international trade relations and provide a roadmap for enhanced engagement between the two countries.
To download a free copy of the report please visit www.inzbc.org
See article in Kia Ora India Magazine: https://issuu.com/inzbc/docs/kiaora_india_jun2023_v5_low/8
Knowledge Partners: https://www.ducoconsultancy.com/