Trade and Security as factors for India-New Zealand bilateral relation
India and New Zealand historically share cordial, close and a growing relationship. The ties between the two countries are rooted in their linkages to a parliamentary democracy, membership of the commonwealth, upholding of the law, the English language and the hugely popular cricket game. Both countries are committed to global peace, North- South Dialouge, combating global terrorism and ecological preservation. The countries also connect as members of a number of international organisations including the UN, the WTO, and the Commonwealth.
Bilateral relations between India and New Zealand were established in 1952. “Opening Doors to India – New Zealand Inc India Strategy”, released in Oct 2011 by former PM John Key was the cornerstone of the developing mutual relations. It outlined the vision for India to become Wellington’s core trade, economic and political partner by 2015.
In recent years there has been a noteworthy rise in the interest of the two countries to deepen their relationship. There has been an exchange of visits including that of the Hon’ble President to New Zealand (30 April – 2 May, 2016) and the then New Zealand Prime Minister John Key (25-27 October, 2016). PM Modi and PM Ardern met on the side-lines of the East Asia Summit in Manila on 13 November 2017 and again on 25 September, 2019 on the sidelines of UNGA, where they discussed the entire gamut of bilateral relations.
India is a land of opportunities and New Zealand can be a participant. According to the McKinsey report,6 by 2030, there will be 590 million people in Indian cities and this means that three quarters of India’s consumer market in 2025 does not exist today and will increase the demand in future. Also there is a lot of residential space that needs to be built as well. New Zealand’s expertise in domains such as agro- technology, clean energy, food processing etc cetera is going to be precious for India.
A healthy trade has its foundation on a solid and invaluable connection between people. Industry-oriented curriculum and efforts to make the campus friendly for international students has led to a significant rise in Indian students going to study in New Zealand. On the other hand, India has many ICT-enabled professionals, willing to venture out abroad which NZ software companies would happily embrace. The pharmaceutical industries in India present an opportunity to New Zealand, considering its ageing population, with a possibility to lower healthcare costs and bolster research potential.
New Zealand imports from India was US$482.99 Million and its exports to India was US$303.13 Million during 2020, according to the United Nations COMTRADE database on international trade. The graph below shows New Zealand’s exports to India over the last decade. Decline in NZ export to India was caused by decrease in our purchase of coal. Major items of imports from India are pharmaceutical products, pearls, vehicles, textiles, machinery items and plastic items etc.
Now the graph below shows New Zealand’s imports from India over the last decade. This graph shows a slightly upward trend.
New Zealand has even mentioned it’s willingness to continue its trade relations with India through a different route when the latter exited RCEP. While addressing the business gathering at the National Capital, the New Zealand’s Minister emphasised the need to adopt latest technologies to encourage innovation which will definitely bridge the gap between the two nations.
The defence relations between India and New Zealand have been limited but there have been joint naval exercises. New Zealand and India have also served together in United Nations Peacekeeping Missions in Sudan and Kosovo.
The New Zealand Government is keen to enhance defence cooperation. Its Defence Adviser to India, undertook his first accreditation visit to India in October 2012. The two nations were also a part of a joint Air Force exercise called Pitch Black.
Considering the recent Foreign Office Consultations held in May this year, both countries carried out a comprehensive review of the bilateral ties and decided to enhance the depth and momentum of engagement in areas of defence and security, space, counter-terrorism, trade and investment, disarmament, cybersecurity, climate change and strengthening people to people ties.
The Indo- Pacific region accounts for 62 per cent of the global GDP with more than 50 percent of global trade traversing through its waters. The economic significance of this region and the assertiveness of China has made the region really dynamic. In the consultation, the countries emphasised closer cooperation for a rules-based international order and free and inclusive Indo-Pacific region.
Somehow, the relationship between the two nations does not seem to move at a rapid pace. The FTA has not crossed the line yet. India tends to see traditional FTAs negatively, but it also sees little benefit in the asymmetry of a market of 1.3 billion people compared to one of 5 million.
A way to strengthen the relationship can also be that rather than focusing on a sweeping FTA, we should look at sector specific agreements such as aviation and technological exchanges. The partners New Zealand often looks towards, like Australia, the United States and Singapore, have made the decision that India is important and needs investing in. Hence, New Zealand and India’s relationship is likely to grow. Furthermore, India’s future is going to be consequential for New Zealand – whether it be on climate change, the WTO, technology, or the way the world changes in coming decades.
