New Zealand and India could soon reach a free trade agreement

Photo: Prakash Singh/AFP/Getty Images

A free trade deal between New Zealand and India is more on track than ever before.

Prime Minister John Key and his Indian counter-part, Narendra Modi, had extensive chats in their bilateral meeting on Wednesday and Kiwis can expect a visit from Modi after he accepted an invitation to come see New Zealand for himself.

Key went into the talks realistic about the difficulties of getting a date for a deal to be signed but told media following the meeting that “without a doubt we’re making progress”.

“They were the most forward leaning statements around a free trade agreement (FTA) we’ve heard from the Indian government. (Modi) wants to make progress relatively rapidly and he wants it to be comprehensive,” he said.

“Prior to coming here we weren’t really going anywhere on the FTA – now you’ve got some very clear direction.”

Key credited “face-to-face time” for the progress, saying there’s a reason “leaders meet each other”.

“That’s because the truth of any kind of relationship is that it’s enhanced when you have that personal contact and connection…in this system that’s absolutely paramount.”

The personal contact didn’t extend to a hug for Key – Modi is a serial hugger, having embraced US President Barack Obama and Russian President Vladimir Putin in the past.


Questioned why he didn’t get one, Key brushed it off and said he “wasn’t looking for a hug”.

India is currently New Zealand’s tenth largest trading partner but with a booming population that’s expected to make it the most populous country in the world by 2026, tapping into a better trade deal is crucial to both country’s success, he said.

This is only the second time Key has visited India – the first was five years ago and since then ten rounds of negotiations for an FTA have taken place but all have fallen short.

Dairy is one of the biggest hurdles for Key to overcome as Indians are still very protectionist and fear their small farmers will be put out of business if Kiwi dairy products start flooding the market.

Key told a business summit made up of both New Zealand and Indian industry leaders that many Indians thinking about trading with Kiwis would think it was about “lamb chops, maybe a little bit of wine and some dairy” but multiple FTA’s with other countries had changed that.

“Take for example our FTA with China – since it was signed two-way trade between our countries has more than doubled,” he told business leaders.

Following his meeting with Key, Modi said the two countries had “agreed to continue to work closely towards an early conclusion of a balanced and mutually beneficial Comprehensive Economic Cooperation Agreement.”

“I would like to mention food processing, dairy and agriculture, and related areas in their supply chain as some of the areas of particular potential for bilateral cooperation. New Zealand’s strength and capacity in these sectors can combine with India’s vast technology needs to build partnerships that can benefit both our societies,” he said.

Another outcome from their talks was to “strengthen our security and intelligence cooperation against terrorism and radicalisation, including in the domain of cyber security,” Modi said.

It was a jam-packed day of meetings for Key on Wednesday and a range of issues were discussed but dodgy Indian agents sending students to New Zealand to study, who are subsequently being deported, didn’t come up once.

Key said the Indian government would like to see more New Zealand roadshows visit so parents “understood the quality of education” their children could receive in New Zealand.

On the whole he described his meeting with Modi as “good constructive warm chemistry”.

Key will visit a mosque and Sikh temple on Thursday and then head to a New Zealand-India tourism promotion event featuring former BlackCaps captain Brendon McCullum and Bollywood star Sidharth Malhotra.

That wraps up the Prime Minister and his delegation’s trip – they leave New Delhi on Thursday night to head back to New Zealand.

This article first appeared on Stuff.co.nz. Read the original article here.

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