PM Luxon: Indian Trade Talks Re-Commence

Prime Minister Christopher Luxon and Trade and Investment Minister Todd McClay have announced New Zealand and India have formally launched negotiations on a Comprehensive Free Trade Agreement.

Mr McClay met with his Indian counterpart Piyush Goyal in New Delhi, announcing what is being heralded as a "major breakthrough" in the economic relationship between India and New Zealand.

“When we came into Government 16 months ago, we made it clear that closer economic ties with India was a key priority," Mr Luxon told media.

“Currently the fifth-largest economy in the world, with a population of 1.4 billion people, India holds significant potential for New Zealand and will play a pivotal role in doubling New Zealand’s exports by value over the next ten years".

The announcement comes off the back of a major lift in political engagement with India. Todd McClay has visited five times and had eight meetings with his Indian counterpart. Foreign Affairs Minister Winston Peters has also visited, and Luxon met with Prime Minister Narendra Modi last year.

But this is the very first visit for the PM, a four-day affair during which he is set to meet Indian Prime Minister Narendra Modi at the high-profile Raisina Dialogue, India's premier Foreign Affairs conference which attracts speakers from across the globe.

Mr Luxon is accompanied by a high-level delegation of ministers, senior officials, business representatives, journalists, and a cultural group.

A Comprehensive Free Trade Agreement is only one part of the Government’s commitment to stepping up all facets of the New Zealand-India relationship.

Talks between the two countries had started in April 2010, but stalled after 10 rounds of negotiations due to a raft of issues including tariff priorities.

Those issues are still a reality. New Zealand already gives access to a host of Indian products and an average tariff of just over 2%. India meanwhile has an average tariff of 17.8%, used to in part protect its agriculture, textiles and manufacturing sectors from cheap foreign imports.

Tariffs also remain a significant source of revenue for the Indian government, and play an important part in placating the farming sector, which employs around 40% of the workforce, with a huge number also involved in farming supply and services businesses.

But despite the hurdles, the announcement appears to be a perfect springboard for the PM's long-awaited trip, and Trade Minister Todd McClay says alongside trade agreement negotiations, New Zealand will continue to invest in stronger, deeper, more sustainable connections with India across all pillars of the relationship, including politics, defence and security, sports, environment, and people-to-people connections.

“One in four Kiwi jobs rely on trade and last year our export revenue added $100 billion to the economy. Strong agreements and relationships like this ensure every New Zealander has good job opportunities, higher wages and access to world-class public services,” Mr McClay says.

Negotiations are initially expected to be held in New Zealand, and will start next month.

-Asia Media Centre