New Zealand has understandably been talking a lot lately about a very big country in Asia: China. But we need to talk about another one: India.
In recent days, skyrocketing Covid infection numbers in the country have focused attention
on India’s struggling health system, as the government in Delhi moves to address issues like oxygen shortages in hospitals. India’s current Covid crisis has thrust it into media headlines, but we should be reading and hearing about it on a more regular basis; and giving it greater thought. The country has been on my mind quite a lot in the past 18 months: from my last overseas trip to the country in February 2020 as part of a business delegation accompanying a ministerial mission, to the announcement earlier this month that flights from India would be suspended.
India has been on a lot of other minds as well. Many of New Zealand’s international partners have been investing heavily in a broad relationship with the country, recognising its strategic importance. Whenever you look at India’s economic and demographic statistics, they’re startling. India has a million young people entering its working age population every month; an economy the same size as China’s was in 2004; and it is on track to be the most populated country in a matter of years. Incredibly, earlier this month, India confirmed six new unicorn tech companies – each valued at US$1 billion or more – in a period of just four days. Yet by most measures New Zealand’s relationship with India appears under the radar in our thinking around our foreign affairs and trade. The relationship itself seems to move at a snail’s pace. I recently obtained a copy of Prime Minister Norman Kirk’s 1973 programme of his visit to India and compared it with Prime Minister John Key’s visit in 2016. Except for the names and details, they were pretty much carbon copies of each other. Similar goals and similar meetings. It was depressingly familiar.
Over the last 30 years or so, New Zealand’s Asian relationships have had a common thread: build trade first and deepen ties later. This has been true for countries such as Japan, Korea, China, and Singapore, and for economies such as Taiwan, Hong Kong and ASEAN. Trade
with Asia has focused the minds of public servants and ministers alike, with FTAs positioned as the ultimate achievement in bilateral relations. New Zealand has been taking this same approach with India, but with little success. With each trade mission, and each round of
trade talks that eventually leads nowhere, the mood of business and government on both sides takes a hit and the New Zealand’s India relationship remains static, at best. Rather than change tack, we have continued to use limited political capital and bandwidth both in Wellington and Delhi, pursuing an FTA that never gets across the line and arguably won’t for the foreseeable future. I do not believe India is going to be a China 2.0. For a whole lot of reasons, India sees trade and trade liberalisation differently. The unique window of opportunity that had China practise its fledging FTA negotiating skills with New Zealand is not going to repeat with India.
Not only does India tend 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. New Zealand has faced these issues before, but India is a more difficult order of magnitude. Even with the
Regional Comprehensive Economic Partnership (RCEP), a combined market of 2.3 billion consumers across 15 countries, including New Zealand, India decided to remain outside this FTA. The challenge is that if an FTA is not going to be the goal around which New Zealand
coalesces its engagement with India, what is? What is our plan B? 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. In 2018 alone, India and Singapore exchanged over 40 ministerial visits. Australia has invested heavily in building strong political, defence and economic relations in Delhi, as has nearly every other major economy.
India’s future is going to be very consequential for New Zealand – whether it be on climate change, the rules-based order, the WTO, technology, or the way the world changes in coming decades. India, and its diaspora, will count even more than now. New Zealand’s Indian diaspora has already made considerable contributions to the economic relationship, not to
mention other facets of society. India has been moving fast and playing an increasingly important role in global and international affairs. New Zealand needs to catch up, or risk getting relegated to the past.
Written by:
Simon Draper
Executive Director, Asia New Zealand Foundation
Te Whītau Tūhono
This is an edited version of an article first published on Stuff.co.nz on 26 April 2021.
To view the published version of the article, click here.
Comentarios