NZ business passage to India won't bring home on FTA

The 50-strong delegation want to deepen ties with the Indian business community rather than seeking trade deals, says NZ International Business Forum executive director Stephen Jacobi.

Jacobi, who is part of the trade delegation, told Rural News that a free trade agreement is not on the agenda at this time.

"We have explored this quite thoroughly, but it has become clear that neither side is willing to make the concessions necessary to get a deal over the line," he says. "Now we are focusing on what can be achieved in the absence of an FTA."

Jacobi says the prospect of NZ getting special access for selected sectors like sheep meat in India is also out of the question.

"I think it could be possible to pursue co-operation on a sectoral basis, but this would be unlikely to lead to a general reduction in tariffs," he notes.

"India is only interested in doing deals with partners with which it already has substantial relations and where it sees a clear advantage to its national interest.

"NZ is a very small market seen from India," Jacobi adds. "What we need to be doing now is deepening our understanding of India and the role NZ can play in India's continuing development story. That will hopefully unlock different co-operation possibilities including in agriculture."

Earlier this year, the Australia-India Economic Cooperation and Trade Agreement was announced. While it's not a comprehensive free trade deal, it provides some Australian producers with a first-mover advantage in one of the world's fastest growing economies.

The agreement reduces tariffs on nearly 90% of Australian sheep meat, wool, horticulture, seafood, fruit, infant formula, and wine.

The Australian deal excludes dairy but Jacobi believes the NZ dairy sector can eye a co-operation deal in India.

"During our five years of FTA negotiations India has made clear it could not contemplate liberalisation of the dairy sector," he says.

"India is, however, the world's largest dairy producer, with a sizeable dairy processing industry. That should give rise to various co-operation possibilities, even without an FTA."

At the recent Meat Industry Association red meat sector conference in Auckland, Agriculture and Trade Minister Damien O’Connor claimed that the meat sector wants a deal with India, even if it comes at the expense of NZ dairy farmers.

But O’Connor says the Labour Government wants a comprehensive trade deal with India. The minister will accompany the trade delegation to India.

Jacobi says the mission is a business-led delegation, the initiative of five business organisations brought together by the India NZ Business Council.