India New Zealand Business Council Speech, India as a Strategic Priority
Good morning, tēnā koutou and namaskar. Many thanks, Michael, for your warm welcome.
I would like to acknowledge the work of the India New Zealand Business Council in facilitating today’s event and for the Council’s broader work in supporting a coordinated approach for lifting New Zealand-India relations.
I want to also acknowledge the many leading exporters, sector representatives, business people, diplomats, and other leaders we have joining us in the room today.
India, for many reasons, is a relationship of paramount importance to New Zealand. I am delighted to be with you this morning to discuss and hear your ideas for driving this relationship forward.
New Zealand is, and always has been, a trading nation.
We are at our best when we are outward-looking and backing ourselves to compete on the world stage.
Trade has therefore always been a top priority for New Zealand governments.
Trade supports one in four jobs in our economy, with those in exporting jobs earning 7% more on average than in other sectors.
We also know exporting firms have higher productivity (25% higher) and grow faster than non-exporting firms. The simple fact is the more we sell to each other, the better off we will all be, and the more we can provide a higher quality of life.
The nature of government action has changed over time to reflect the changing nature of the global trading environment.
Facilitating market access has long been a priority, and we have some serious unfinished business there – which we flagged in our campaign.
But government’s role today is much broader than that – it is about shaping the brand and the story behind it. Opening doors. Helping to make connections.
And of course building trade architecture that serves the needs of exporters and investors.
This morning I would like to set out our government’s approach to trade – as well, of course, how it applies to India.
Luckily, we have a lot to offer. Our products and services are world class. We are an open, innovative economy run by creative and globally-minded Kiwis.
New Zealand businesses provide terrific value to India. We truly present leading expertise, experience, technology and a practical edge that can make a tremendous impact when paired with India’s economic capabilities and ambitions. Be it in agriculture, F&B, tech, manufacturing solutions, ICT, services etc.
Part of our government’s message to businesses, and to all New Zealanders, is that our number one focus is growing New Zealand’s economy and easing the cost of living so New Zealanders can get ahead.
Strengthening our connections with the rest of the world is one of the six drivers we’ve identified to do just that.
Cross-border trade and investment is an engine for growth, expanding New Zealand’s economic opportunities, lifting incomes, and strengthening our ability to respond to shocks.
This is why, as part of our government’s trade strategy, we are going to:
Drive the value of New Zealand’s exports upwards.
Expand our access to foreign markets, including through our Free Trade Agreement architecture.
Conduct a record number of trade missions to open doors for New Zealand exporters.
Relentlessly focus on resolving the non-tariff barriers to trade that restrict access to overseas markets.
Historically we’ve judged the success of our trade policy on the number of deals that we’ve negotiated and signed.
We think there should be another metric on how much more we export and sell overseas by value - not by volume.
That is why we are targeting a doubling of the value of exports over 10 years.
We are committed to working to resolve barriers that are preventing New Zealanders from doing business with the world.
Part of growing value is getting more return for what we already export. Non-tariff barriers – subsidies, customs delays, red tape and technical issues - are increasingly a problem, costing Kiwi exporters an eye-watering $12 billion per year.
Over the past year, 14 Non-Tariff Barriers affecting approximately NZ$1.45 billion worth of trade have been resolved by government agencies.
I am going to seek urgent advice from officials as to how and what else we can do to supercharge this support to business – we are determined to break down the barriers that are such a drag on their productivity and growth.
We’ll also work to maximise the value of the agreements we already have.
Successive New Zealand governments have pursued and signed 15 bilateral and regional free trade agreements since the 1980s.
FTAs help consumers by putting more products on the shelves at better prices, and they help exporters by removing the barriers to trade and levelling the playing field. But to unlock their full value, trade agreements need to be effectively leveraged.
That is why our focus will not be on the number of agreements we sign, but the value of the trade we enable. That includes with India where, even in the absence of an FTA, there will be many opportunities to remove unnecessary costs and barriers to trade worth significant commercial value to our exporters.
Finally, we’ll continue to champion the importance of a level playing field and predictable rules for all our exporters.
Rules-based trade provides the certainty needed for businesses to invest and create jobs. It not only reduces the risk for businesses of policy-induced disruptions, it also increases the likelihood that markets and suppliers will stay open when access to alternative sources of supply is needed most.
This Government recognises the strong value in continuing to support regional and global trade architecture like the WTO, APEC, ASEAN, and the OECD in order to sustain, institutionalise and support trade policy cooperation and influence ‘norm building’ in our region and beyond.
But our system of trade rules must, of course, adapt and respond to the issues of the day.
Luckily, New Zealand has earned a reputation for being at the forefront of innovative trade policy internationally.
First we have a strong and clear message for our partners: New Zealand is open for business. We will engage, both with India and with other partners. We will be active offshore to work for New Zealand businesses and to drive investment in both directions.
I have signalled a record number of trade missions in this Government’s first term, including to India. I look forward to this delegation – which I hope will involve many of you in this room –to strengthen vital connections between Kiwi and Indian businesses.
We will get out and hustle. A lot of the action these days, regardless of whether we have an FTA in place, is non-tariff barriers – NTBs. Tackling NTBs is a complex business. It takes persistence. We will be there for you.
We will also seize opportunities to build trade and other architecture with India.
Developing closer economic relations with India is a strategic priority for this government.
Growing our trade with India means investing across the relationship in areas of importance for both New Zealand and India.
Bolstering all facets of the broader relationship, spanning political, defence and security, people-to-people and cultural elements - together with our existing economic partnership - is a precondition for lifting our trade with India.
I understand that India has signalled interest in deepening our sectoral cooperation to deliver mutual benefits. Agriculture, education, air connectivity and business-to-business architecture are the initial priority sectors of focus for our government; however, I am also keen to hear from you today as to other opportunities.
You are all well aware that our business-to-business connections are growing and I commend the India New Zealand Business Council for its work to supercharge this growth.
The 50-person business delegation that travelled to India in late August of this year demonstrated commitment and cohesion with regard to business connections between India and New Zealand.
Looking ahead, our government is committed to enabling more of these engagements. A trade mission to India next year is something we are working towards.
We are also acutely aware of the need to lift New Zealand’s presence in market. There has been an increase in enquiries about exporting to India post-Covid, which include questions about how to scale operations and diversify supply chains with Indian partners.
New Zealand Trade and Enterprise (NZTE) is currently working intensively with more exporters in India than ever before.
Key sectors of engagement for New Zealand companies include aviation, food and beverage (F&B), manufacturing and increasingly, information technology and tech services (health, education, agriculture and general).
Across the manufacturing and aviation services sectors, New Zealand has competitive technologies that are sought-after in India, especially as the country invests in infrastructure development, urbanisation, defence modernisation, space exploration and security.
There is also interest from Indian companies to adopt modern farming techniques, such as investing in genetics, livestock and disease management, use of technology in farms, and best practice pertaining to feed, milking, testing, and veterinary issues.
Agricultural collaboration in niche, high-tech areas will expand our existing primary industry links, and cooperation in horticulture has been identified as a focus area.
This includes a project that supports India’s nascent kiwifruit industry and I would like to thank Zespri for all the work it has been doing in this field.
It serves as one of many examples of New Zealand companies positioning themselves as innovative and agile suppliers of smart solutions in India.
Further examples include Rakon, which opened a Centre of Excellence in Bangalore on 14 June, assisting India in its communications, defence and space programmes; Valocity, a company specialising in property valuation and risk management for real estate owners; and STAAH Holdings providing booking engine optimisation software for the hospitality sector.
Direct air services in the near future will help to lift our engagement and ease of doing business with India across the board. This would also have a substantial positive impact on our tourism industry with potential to increase significantly the already large numbers of visiting friends and relatives and tourists.
Education remains a key link between our people. India has consistently been our second largest source of international students and I understand there is opportunity to grow our education cooperation and for our universities to establish a stronger presence in India, in line with India’s National Education Policy.
The New Zealand Centre, at the Indian Institute of Technology in New Delhi, is a key driver of advanced collaboration between top Indian and New Zealand researchers: from cutting-edge cancer research, to use of drones in precision agriculture, and innovative wind turbine technologies.
This supports existing collaboration in Healthcare and Healthtech. State and private groups provide services on a large scale, and there is real interest in remote delivery and reduction of health provider costs through IT and technology solutions.
Fisher & Paykel Healthcare is another strong Kiwi brand which is making headway in market.
Bilaterally we have strong building blocks and the momentum to take this relationship much further. Additionally, the Indo-Pacific Economic Framework for Prosperity (IPEF) looks to be a potential vehicle for lifting our engagement.
One of the things that really caught my eye in the news from San Francisco on the IPEF process was India’s role.
India is already part of the three pillars: the supply chain pillar, the climate-focused “clean economy” pillar, and the “fair economy” pillar focused on rule of law issues such as corruption. My officials tell me India has been both active and constructive in these negotiations.
It seems likely New Zealand and India will become formal partners in these three agreements as they come into force in the months ahead.
Encouragingly there are also promising signals suggesting India’s interest in IPEF’s trade pillar, which is basically a set of conventional FTA rules chapters. I gather India has been looking closely at the pros and cons of joining this pillar as the negotiation moves forward. To be clear, from a New Zealand point of view we would be keen to have India join.
The new IPEF architecture also involves annual ministerial meetings and a Leaders meeting every two years. And there is now a set of initiatives from Leaders in areas such as strategic technologies, critical minerals and energy security.
Clearly India is serious about working alongside trusted partners in this very large regional initiative. For our part, we see the IPEF agenda as an opportunity to work alongside Indian counterparts across a range of big issues – some that are geopolitical, as well as commercial in nature.
As I said earlier, India is a strategic priority for our government, we are committed to developing a broad-based relationship with India – one founded on an ambitious longer-range view of the potential. It looks to me as if the new IPEF framework gives us an opportunity to further enhance our efforts.
Finally, there is no substitute for time in-country. Simply put, our business and political leaders need to be in India, often, to develop our relationships and lift the profile of New Zealand’s offering.
I will be working with Prime Minister Luxon and the Cabinet to ensure that we maintain a regular rhythm of engagement with India’s political leaders as a strategic priority. As a practical demonstration of this, I plan to visit India to meet my counterpart before Christmas.
It is essential that the government works in partnership with the private sector and builds on the work you have all been so committed to so far. With that, I would like to take this opportunity to open up the floor and hear from all of you.