Business relations with India more important than FTA

Advance Reading of our forthcoming Leader

India’s External Affairs Minister Dr Subrahmanyam Jaishankar with New Zealand Foreign Minister Nanaia Mahuta
in Auckland on October 6, 2022 (INL Photo)

New Zealand and India formally announced an end to their talks on a Free Trade Agreement, during the recent visit of External Affairs Minister Dr Subrahmanyam Jaishankar.

“Free Trade Agreement with India is not among the priorities of the government,” Foreign Minister Nanaia Mahuta told a Press Conference at the Hilton Hotel in Auckland after talks with her visiting Indian counterpart.

Dr Jaishankar said that there were other ways of strengthening relations, citing business relationships and ‘mobility of people’ as examples.

The shift of emphasis

Ms Mahuta said that her government’s emphasis has shifted from a formal FTA to business-to-business relationships, where there is enormous potential.

“We want to engage in specific industries that will benefit both countries. We will continue to work with India and use the existing and emerging opportunities,” she said.

The reopening of borders has provided a timely opportunity to re-engage with India and as Ms Mahuta said, people form a significant part of our diplomatic relations and the two countries have built relationships on common grounds of democratic, Commonwealth and other values.

“In recent years, we have come together to jointly address global issues and challenges such as Climate Change and the Covid pandemic. We see greater cooperation with India in areas such as the digital economy and green business. We recognise that there are niche areas in which we can derive mutual benefit,” she said.

Unrelenting position

The Indian government led by Narendra Modi is business-friendly but it is not in the interest of India to relent from its position relating to the removal of tariffs on agricultural imports. This has been the main thorn in the flesh of several non-starter FTAs.

From that standpoint, the FTA signed by India and Australia is not a ‘complete pact,’ for it neither includes dairy products nor visa-free travel of people. On that score, the FTA signed by New Zealand and the United Kingdom during the visit of Prime Minister Jacinda Ardern also excludes Agriculture, but gains have been made in other areas including a longer Overseas Experience for New Zealanders in the United Kingdom and vice-versa.

New Zealand has never demonstrated its enthusiasm strong enough to convince India that it is serious about a more constructive engagement with the world’s largest democracy (except for saying forever that we share democratic traditions) and soon-to-be the world’s most powerful economy. It was the Labour government that had initiated a discussion with the Indian government in 2007, which, after 15 years, remained just that: discussion.

Politics has not been helpful in strengthening the relationships between the two countries. Dr Jaishankar continuously criticised New Zealand’s immigration policy, which has been seen by Wellington as ‘an unnecessary interference in the internal affairs of the country,’ which, according to a Ministry of Foreign Affairs and Trade official is antithetical – “New Delhi is allergic to anyone speaking against India’s policies. Ms Mahuta was visibly irritated.”

India-New Zealand Relations

India and New Zealand have enjoyed cordial diplomatic relations for a long, despite a short break (1982-1985) when the two countries shut down their respective diplomatic missions in Wellington and New Delhi. Successive High Commissioners have helped to promote political, economic, cultural and educational ties with New Zealand. Notable among them have been Bal Anand, Kadakath Pathrose Earnest, Retd Admiral Sureesh Mehta, Sanjeev Kohli and Muktesh Pardeshi. We hope that the new incumbent Neeta Bhushan will bring to her tour of duty the fine art of diplomacy which has distinguished India for the past 75 years.

We wish her well.

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