Govt pins hopes on free trade agreement with India within first term

India is a nation of extremes — it's the most populous having just surpassed China and is also among the hottest.

The nation's population is now more than 1.4 billion, while temperatures have nudged, if not surpassed, 50C in some parts this summer.

Inequality is high too, with the third most billionaires in the world calling India home, alongside some of the poorest people in the world.

But its economy is making huge strides. Currently the 5th largest economy in the world, it's on track to becoming the 4th largest, with a growing middle class estimated to hit 583 million next year.

It's a burgeoning consumer market many across the world are keen to tap into.

New Zealand first identified it as a nation of priority back in 2011. But despite this it's still far from coming close to our largest trading partner — China.

The latest figures from Statistics NZ show in the last calendar year, India has risen in the ranks of our largest trading partners, from 17th in the year to December 2022, to 13th in 2023.

The value of two-way trade between the two hit $2.756b last year. The top three exports across to India were travel ($724.7m), wool ($60.55m), and iron and steel ($57.8m).

The top three imports coming in from the Asian nation were travel ($272.9m), pharmaceuticals ($120.59m) and machinery ($103.86m).

The current government has pinned its hopes on a Free-Trade Agreement (FTA) with India, with its most optimistic time frame within its first term.

It's an ambitious goal in a market where many others are fighting for India's attention.

New Zealand's newest diplomat to India is High Commissioner Patrick Rata who arrived there earlier this year.

"We're in a very competitive market, and I think that's probably the number one challenge that we are going to face."

Having served as New Zealand's ambassador to Korea while New Zealand was pursuing a FTA there, he's no newcomer to the delicate diplomacy this requires.

"I wasn't directly part of the negotiations," he said. "But I was the Ambassador, tasked with trying to broaden and strengthen and highlight New Zealand as a good strong partner for Korea as part of the overall effort to convince them to complete an FTA."

He said "every little thing matters" in the efforts to work with every sector of a society to convince them that a closer economic relationship with New Zealand is not contrary to their own interests.

On the outskirts of Delhi is Suri Argo Fresh, one of the largest cold store facilities in this part of Delhi.

A large part of its business each summer is fruit, largely apples and kiwfruit, shipped all the way from New Zealand

Its owner Sudhir Suri said there's room for more. He encouraged all those still thinking about it to act.

"My perspective is India is the next China," he said. "India is the next place to be in, as the place which is going to be very fruitful."

Zespri's head of global public affairs Michael Fox said while India isn't one of the company's biggest markets, it knows there are some real opportunities.

"We sell about $20m worth of New Zealand kiwifruit there a year," he said. "We also sell to a large number of other markets around the world. Mainly the likes of China, Europe, Japan.

"But it's a market which we have a lot of optimism about."

A local kiwifruit grower in Bay of Plenty Lynda Hawes said greater access would see all involved in getting fruit offshore benefit.

"That brings benefits to us as growers and everyone downstream in the kiwifruit industry, all the workers, all the post-harvest, all the transport, all the logistics, all the shipping, and all the offshore infrastructure."

At the moment kiwifruit from New Zealand remains somewhat of a luxury item over in Delhi — selling at a relatively high price of $11 for a pack of six at New Delhi's Le Marche Supermarket.

But if a free-trade deal could see these prices drop, one of the store managers Purvi Gupta said it could see the fruits made available to a wider market.

"If I have to buy something at a higher price, I would always go for the same quality for a lower price … if something like [an FTA] happens, it could be accessible in the local markets."

While New Zealand fruit might have a place on many shelves in India, giving the dairy sector free market access is likely to be a tougher sell.

The National-led government won't say whether it's prepared to sign a deal that excludes dairy.

But Nalin Kohli, a spokesperson for India's ruling party the BJP told 1 News any deal would need to put the Indian people's interests first.

"I think the larger question is not about what any country desires or doesn't desire. The larger question is what works for the wider population," he said. "In India a large sector is reliant on agriculture, on dairy.

"These are major areas of employment and major areas of economic activity. These are questions that have to be looked at through their interests.

"We can't challenge their livelihood in the desire to achieve free trade."

Corazon Miller travelled to New Delhi last month with the assistance of the Asia New Zealand Foundation.

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