The Government has decided to go it alone on a free trade agreement with India rather than wait for the complex China-led Regional Comprehensive Economic Partnership Agreement trade agreement which includes India to be completed.

The Prime Minister told his weekly post Cabinet China press conference that that maybe a quicker and easier way to “get home” with a free trade agreement with India might be a bilateral deal.

So he is leading a business delegation to India next week a high-level business and education delegation to India next week, visiting Mumbai, New Delhi and Kochi.

“India has sent a number of their trade people and commerce people over in recent times and they have been making some quite positive noises but there is a process, and that takes time in India,” he said.

He said that at present discussions with India were a little less about whether there could be an FTA and little more about what the quality would look like.

“If you look at the demographics between India and China, they are broadly about the same, but we do broadly about eight times more trade with China than we do with India.

“I don’t think it is any  great secret that what has facilitated that is the FTA.”

But New Zealand has heard optimism about free trade agreements with India before.

Two years ago Primary Industries Minister Guy told a business lunch in Mumbai that after “too long” since the ninth round of talks on a bi-lateral free trade agreement, work was now under way to schedule the 10th round.

“It’s real. Officials are scrambling,” Guy said.


In the meantime, our exports to India have actually fallen.

Five years ago, trade officials, in their “NZ Inc India Strategy”, hoped New Zealand would ship $2 billion of goods to India by 2015. Instead, the value of goods exported to India annually has fallen since 2011, from $900 million to $637 million last year.

But Key says his visit will be about more than trade.

“Along with further strengthening New Zealand’s political, security, and economic connections with India, my meeting with Prime Minister Modi will be an opportunity to discuss his efforts to reform India’s economy and how New Zealand can be part of India’s growth.”

He will also attend a range of events focused on showcasing the innovation of leading New Zealand companies doing business in India, as well as New Zealand’s reputation as a high-quality education and tourism provider.

And for watchers of domestic politics it is notable that he is taking the chair of Parliament’s Foreign Affairs, Defence and Trade Committee, Mark Mitchell, with him — a clear indication of Mitchell’s standing within the caucus and also a possible pointer to his promotion to a Ministerial post when the expected Cabinet reshuffle takes place early next year.