Trade Minister Damien O'Connor and Indian High Commissioner Neeta Bhusan arrive at the High Commission's seminar on relaitons with New Zealand.

The facts are bald and simple; India is now the most populous country in the world and the fifth largest economy and is on track to becoming the fourth.

Despite that, New Zealand’s relationship with India could best be described as in its infancy, even though New Zealand has had a High Commission in New Delhi since 1958.

There have been the odd sputters into the life of the relationship, Sir Robert Muldoon clashing with then-Prime Minister Indira Gandhi over South Africa and subsequently closing the High Commission.

Then in 1984, David Lange, who loved India, re-opened it and appointed Sir Edmund Hillary as High Commissioner.

But since then, it has hardly seemed like a priority for either the Ministry of Foreign Affairs and Trade or successive Foreign Ministers.

New Zealand’s eyes instead have been turned towards Beijing.

And therein lies the challenge that now confronts the country as it wakes up to the huge economic potential of India.

India views New Zealand not as an economy but as a pawn in the great geo-strategic chess game being played out in the Indo-Pacific region.

That much was clear in a half-day seminar on the relationship hosted by the Indian High Commission in Wellington this week.

The overriding theme was that a lot needed to happen before New Zealand could get a free trade agreement with India, similar to Australia.

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The former Governor General, Sir Anand Satyanand, put things in perspective when he said for India, a trade deal with New Zealand would be like New Zealand putting a priority on a trade deal with Waiheke Island.

POLITIK The Commandant of India’s National Defence College, Lt Gen Sukriti Singh Dahiya with former Governor General Sir Anand Satyanand at the Indian High Commision this week.

The Indian strategic view of New Zealand was spelt out by the Commandant of the Indian Defence Force, Lt General Sukriti Singh Dahiya.

“From our perspective, New Zealand is a very important country in military terms,” he told POLITIK.

“I see it as a flank of the Indo-Pacific.

“Irrespective of its size. I think the location is very, very strategic when we finally talk of the common defence of the Indo-Pacific.”

Dahiya’s comments have come in the same week that the Wall Street Journal is reporting that China and India have expelled nearly all of each other’s journalists as rivalries between the two countries escalate.

“The reciprocal moves are likely to add to acrimony between the two neighbours, whose relationship has deteriorated since a deadly brawl on the contested Sino-Indian border in June 2020,” the Journal said.

“Since then, a once-warming relationship between the two members of the so-called BRICS grouping of emerging powers has grown testy, spilling over into a wide-ranging bilateral dispute.”

That rivalry has seen India support the apparent transformation of the “Quad” agreement between the US, Japan, Australia and India into a security pact.

That raises the question as to whether India would want to see New Zealand become part of the group.

“If you ask me, it’s not a question of if; it’s a question of when,” Dahiya said.

“New Zealand is inseparable from the issues of Indo-Pacific.

“The national security of New Zealand also lies in a commonplace.

“All your lines of communication run through the same area.

“So, I think it’s just a natural course of convergence. In military terms.”

The very fact that the class from the National Defence College was here speaks to the breadth that is starting to come into the India-New Zealand relationship.

Speaker after speaker at the seminar borrowed the Australian phrase that the relationship could no longer be about “Commonwealth, cricket and curry.”

But at the same time, several warned not to expect that we could go straight to a Free Trade Agreement.

POLITIK The chair of the NZ India Business Council, Earl Rattray

Earl Rattray, a former Fonterra director, chairs a joint New Zealand – Indian milk company, Binsar Farms, which is using apps to manage the delivery of fresh milk to customers in the New Delhi region.

Rattray supplies the dairy farming expertise, and a group of former Indian IT executives run the company.

Essentially New Zealand is exporting expertise rather than milk.

But Rattray, the chair of the New Zealand India Business Council, believes this is only the beginning.

“One of the things I think that often gets lost in the conversation about what is happening in India, and I’m very, very conscious of it, is that there sits the biggest pool of English-fluent, highly educated youth who are internationally mobile;  they are motivated, and they are going to change the world,” he said.

“And if New Zealand is not engaging with that if we aren’t relevant to that generation of Indians who are growing up and are going to change the world, then we will be the poorer for it.

“This is not going to be a 3.5 trillion economy long.

“It will be a 10 billion economy within the next generation, and I think it’s the biggest opportunity in the world if we can master it. “

But Rattray warned that engagement with India needed to be diplomacy led. Trade would follow that.

“Typically, in New Zealand, diplomacy tends to flow where the trade opportunities are,” he said.

“Tip it upside down. 

“The one thing I’ve learned more than anything else about India is this concept of brotherhood. 

“Indians do business with their friends, and we can see that it’s an unspoken quid pro quo because there is a concept of mutual care for each other.

“So our task as a nation is to figure out in practice how we are going to be always seen as a friend, never as a threat And I think we’ll make great progress.”

That philosophy is being put into practice in India by Zespri, who are now partnering with a fledgling Indian Kiwifruit industry to have them supply the off-season market while New Zealand exports fill the other seasons.

Zespri’s Head of Global Public Affairs, Michael Fox said New Zealand Kiwifruit exports could not expand much beyond their current relatively small $20 million total because of tariffs there.

“India doesn’t owe us zeros tariffs. Doesn’t owe us zero tariffs,” he said.

“We have to find something that we can offer to India in return.

“So we’re having really constructive discussions supported by our government with India around what can we offer.

“We have a track record of working with growers in other parts of the world, and we’re looking to do the same in India.”

POLITIK Sir Anand Satyanand

Asia NZ Foundation’s Director of Research, former diplomat Suzannah Jessep, said what was needed was a “leader-led approach to the relationship which would give it stability, ballast and direction.

“Leaders can help us do that by really focusing our public sector and saying this is a priority, and this is what we need to do,” she said.

That view was echoed by Indian High Commissioner Neeta Bhushan, who said her top priority for the relationship would be more exchanges at the summit level and then more high-level visits along with increasing cooperation between the various sectors of the two countries economies.

Trade Minister Damien O’Connor,said a free trade agreement was always referred to as the only way forward.

“We don’t have a free trade agreement with the US,” he said.

“But we have a really strong, enduring and valuable commercial relationship with that market.

“The same thing could happen here.

“It’s not that I will give up or shift focus from maybe that long-term goal, but let’s not let that get  in the way of other opportunities.”

New Zealand’s trade negotiators might be wary of dealing with India over a free trade agreement in part because of the likelihood that there would be no deal on dairy exports which could be seen by other potential free trade partners as a concession that New Zealand would make elsewhere.

And O’Connor would have recent memories of dealing with India over the Regional Comprehensive Economic Partnership (RCEP), where India spent years in the negotiations and then pulled out at the last minute.

There are other challenges in the relationship.

Perhaps the most difficult — and the subject of a question from an Indian audience member at the seminar is New Zealand’s objection to India becoming a member of the Nuclear Suppliers’ Group. (NSG)

The NSG seeks to govern the transfer of nuclear materials among members. Exclusion makes it difficult to obtain material that might be used for a nuclear bomb.

India tested its first nuclear bomb in 1974 but has consistently refused to sign the Nuclear Non-Proliferation Treaty.

China, Austria, Ireland, Turkey, South Africa, and Austria, along with New Zealand, oppose membership of the NSG by states that have not signed the Non-Proliferation Treaty.

POLITIK The audience at the Indian High Commission seminar

The former University of Otago Political Scientist and UN Assistant Secretary General, Ramesh Thakur, is now a senior research fellow at Tokyo’s Toda Peace Institute and last year convened a conference on nuclear relations between China, Pakistan, and India.

He said New Zealand’s position on the NSG was relevant to its desire to improve bilateral relations with India.

“New Zealand is in a long queue, as many countries court New Delhi,” he said.

“India matters more to New Zealand than the other way round.”

He compared New Zealand’s position with that of Australia, which lifted its ban on selling uranium to India.  

“The lifting of the ban in 2011 did indeed set the two countries on a new course that has since gone from strength to strength in economic, diplomatic and security relations<, ” he said.

Those economic relations now include a free trade agreement.

But the Australian experience is a reminder that free trade agreements require supportive bilateral political environments in which to take root.

That is the immediate challenge for New Zealand.