Foreign Minister’s visit should lift Indo-Kiwi trade from current inertia

India’s External Affairs Minister Dr Subrahmanyam Jaishankar with New Zealand Foreign Minister Nanaia Mahuta on the sidelines of the Commonwealth Ministers Meeting in Rwanda on June 25, 2022 (PTI Photo)

Rahul Bhattarai

New Zealand will welcome India’s External Affairs Minister tomorrow on a six-day visit to the country.

Dr Subrahmanyam Jaishankar, the first Indian Foreign Minister to visit New Zealand in more than 30 years, will hold official talks with his New Zealand counterpart Nanaia Mahuta in Auckland.

Prime Minister Jacinda Ardern told the media during her post-cabinet briefing today (October 3, 2022) that the visit will allow the two countries to strengthen trade, education and people-to-people relationships.

“New Zealand has a very important relationship with India. We will certainly be seeking to make more progress on trade. We have a significant Indian community in New Zealand,” she said.

The growing Indian community

Dr Jaishankar is expected to hold bilateral talks with Ms Mahuta and her officials in Auckland during his first visit to this country.

There are about 240,000 people of Indian origin living in New Zealand as per 2018 data published by Statistics New Zealand. The next Census is expected to be released in March 2023.

According to Education New Zealand, about 10,000 students arrived from India in 2020, adding about $500 million to the economy.

India is the second largest export education market after China.

Auckland Business Chamber Chief Executive Simon Bridges said that New Zealand has very long-standing connections with India and that the visit of Dr Jaishankar will be highly beneficial to the business community.

“It is a high-level ministerial visit that we have had in a long time. The visit really matters to New Zealand, given our people-to-people link,” he told Indian Newslink during an interview.

“It is a real opportunity to demonstrate in our own way our soft power, show him the wonder of our produce, the beauty of our country, the hospitality of our people and in doing so come closer towards some of our goals in politics and trade,” Mr Bridges said.

The first (virtual) meeting between India’s External Affairs Minister Dr Subrahmanyam Jaishankar and New Zealand Foreign Minister Nanaia Mahuta on March 1, 2022 (Twitter).

Stagnant bilateral trade

New Zealand’s Ministry of Foreign Affairs and Trade (MFAT) recognises that India is one of the largest and fastest-growing economies in the world.

“The Regional Comprehensive Economic Partnership (RCEP) presents significant opportunities for New Zealand’s trade with India. India was involved in the RCEP negotiations from 2012 until it withdrew in November 2019. A fast-track accession process is available for India should it wish to re-join RCEP in future,” the Ministry’s website says.

Quoting Statistics New Zealand, the MFAT website said that India is among the 15 top trading partners of New Zealand, with the two-way trade in goods and services placed at $2.2 billion at the end of September 2021, validated in January 2022.

“Exports to India are worth $1.1 billion ($467 million in goods, $633 million in services) with imports worth $1 billion ($878 million in goods, $202 million in services). Our key exports to India include logs and wood products, fruit and nuts, and education services. Before Covid-19, this also included travel and education services (pre-Covid, India was New Zealand’s second-largest source of international students and a significant tourism market),” MFAT said.

Massey University Professor of Economics and Finance Faruk Balli said that while New Zealand recorded a deficit of $400 million in goods, the services sector registered a surplus.

“Our export volume is between $400 to $500 million, mostly made up of commodities like fruits, wool and wood. Our imports are predominantly vehicles, textile, machinery,” he said.

Professor Balli said that lowering tariffs will not adversely affect the domestic industry.

The China Equation

China and India are two manufacturing and trading giants of the world and New Zealand’s trade relations with the two countries are markedly different.

According to MFAT, the two-way trade between New Zealand and China was $37.7 billion as at the end of December 2021, accounting for a rise of 20% over the corresponding period of the previous year. China remained New Zealand’s largest market for goods during the first quarter of this year with the total value placed at $4.8 billion, up 5% over the same period in 2021. The total value of imports from China was $16.3 billion.

Rahul Bhattarai is Indian Newslink Reporter based in Auckland.

 

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