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
5 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?
Anon 9.20 says the FTA allows "uncapped student numbers". Seems to me that, since it seems there is no cap currently imposed on Indian student numbers, the position is unchanged by the FTA. And, for the record, almost 25% of all Indian applicants are currently rejected, which suggests that our officials are pretty much on top of their game when it comes to spotting the corruption and fraud you are obsessed with. So the whole basis for your rant is misguided, Anon 9.20. But I'm sure you have a bright future with Bishop Tamaki and his band of patriots in their search for the quintessential anglo-saxon but haka-dancing kiwi. Join up and then the rest of us can ignore you and get on with making this excellent FTA work for the benefit of all New Zealanders. Well done Prime Minister. And well done to our dedicated negotiators at MFAT who it seems are very good at the business of turning political aspirations into workable structures.
A little suspicious about how quickly the deal was negotiated, considering how long talks have been underway previously. There has to be a downside, yet to be revealed. I do not share Jones Boys' effusive enthusiasm. Remember that we need India a lot more than India needs us. Anon at 9-29 is right to be skeptical
Not sure about Anon 5.50's grasp of time, but given that negotiations with India started in 2010 it's difficult to understand why s/he considers the FTA was concluded "quickly". All negotiation is a game of give and take and the time to reach agreement is when it becomes clear the benefits of agreement outweigh the likely benefits of delay. And it is no co-incidence that the pace of negotiations picked up almost exactly when Donald Trump re-emerged and destroyed the rules-based multi-lateral world trading order which forced India to focus on its bi-lateral relationships. Given that the lack of enthusiasm to complete the FTA had previously always been on the Indian side, Luxon's initiative prompted a significant change of direction by the Indians, for which we can probably thank Trump. Anon 5.50's comment that "we need India a lot more than India needs us" therefore has no relevance to the FTA as negotiated, since larger forces are at play here. And besides, on balance, it was the best deal available after 25 years of talking. So we should be thankful that MFAT is agile enough to spot the opportunities, and move on them, whoever presents them to us.
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