When Christopher Luxon promised in a TVNZ debate in 2023 that he would get a trade deal within his first term of government, it seemed fantastical. Trade talks with India had more or less been shelved for a decade. …
And it looks pretty good. It covers a huge amount of goods (plus essentially all services) and delivers steadily lower tariff barriers over the coming decades.
Better than I expected.
In a deal like this there is no downside — just relative upside. For sheep products, tariffs are slashed to zero from day one, as they are for forestry. For dairy, high-end products and ingredients for Indian export are the main winners. That is, frankly, more than most would have expected, given India’s political sensitivity around dairy.
Lowering tariffs is a win-win for both countries.
But stepping back for a moment, at the start of 2025 virtually no one — or probably absolutely no one — would have thought New Zealand could wring this good a deal out of India, let alone in nine months.
This is unambiguously good news for New Zealand. The sheer size of India’s population, and its messy democratic path to growth, is something worth a small trading nation hitching its wagon to.
The China Free Trade Agreement outperformed expectations, and so will the Indian deal.
Yes. We have linked ourselves economically to the most populous country on Earth. We will never get a FTA with the US, but we now have ones with China, Canada, Australia, UK, EU and now India.
This also partly explains the relatively small number of three-year skilled worker visas New Zealand agreed to — just under 1700 per year — as well as the provision allowing Indian postgraduate students to stay and work in New Zealand for two or three years under the deal.
This represents just 0.03% of our population. As a percentage of current inwards migration is is a tiny 1.5% increase.
But at first blush at least, full credit is due to Christopher Luxon and Todd McClay for getting this done. It looks a real achievement. The Luxon promise was treated with scepticism at best and outright derision at worst. Without their single-minded focus, it would probably have continued to languish in the too-hard trade basket.
It’s called delivery. Something the previous government had difficulty spelling.
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders
2 comments:
Great - Now let's have the same level of effort put into getting rid of Maorification and Co-governance because of the division this causes!
The immigration stats mentioned don't take into account the uncapped student numbers the FTA allows; which they are sold as a pathway to residency. Most of these 'students' will end up as vape or liquor store managers only employing their own or uber-eats drivers; where would we be without such skilled workers as these. Certainly worth the extra strain on our creaking infrastructure that they have not paid into, and the increased demand for our real estate Ponzi scheme that is locking our own younger generations out of home ownership. Not to mention the corruption and fraud India is awash in, and that has started to rear it's ugly head on our shores (electoral fraud, fraudulent licenses and qualifications, etc.). What possible down sides could there be?
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