Stalled Indian FTA gets extra push

John Key and Narendra Modi (AAP)
John Key and Narendra Modi (AAP)

India's leader Narendra Modi has not uttered the words "bilateral free trade agreement" in public, but Prime Minister John Key says he's heard enough to believe stalled talks will now get a push start from the top.

Mr Key and Mr Modi met in the capital New Delhi on Wednesday and issued subsequent positive statements but no clues of when six-year-old FTA negotiations might look like come to fruition.

New Zealand is keen on a FTA to get a bigger piece of the burgeoning Indian economy.

Mr Modi's statement included a cricketing analogy when he said "defensive play has become aggressive batting".

He also said New Zealand's supply chain technology in food processing, dairy and agriculture had potential for bilateral co-operation.

"New Zealand's strength and capacity in these sectors can combine with India's vast technology needs to build partnerships that can benefit both our societies."

There were no further clues to FTA progress in a speech Mr Key gave to a business council later on Wednesday, but when he spoke to reporters at the end of the day he was bullish.

They had gone over Mr Modi's statement and married it up with the private conversation and "there's a fair bit of momentum now".

There was clear direction from the top with what he described as the most forward-leaning statements heard from the government yet, Mr Key said.

"When the head of their government gives instructions to the bureaucracy it really moves things forward."

About 90 percent of the areas of discussion had eliminated tariffs, but the remaining 10 percent were important areas for New Zealand.

The two needed to find a trade-off in areas they wanted movement on, Mr Key said.

Running alongside is the Regional Comprehensive Economic Partnership - 16 Asian/Oceania nations including India and New Zealand, trying for a group FTA.

"Both are potential pathways to home from our perspective," Mr Key said.

However, RCEP had more moving parts and vulnerable to one country passing legislation.

"We think on balance it's probably faster to get a bilateral deal done. But both are going to be pursued."

Also announced was that Mr Modi would make a reciprocal visit to New Zealand, but no time frame was given.

The two leaders also announced they had agreed to strengthen their "trade and economic architecture", and to new co-operation in areas such as cyber security, counter-terrorism and food safety.

Mr Key, along with a 35-strong business delegation, will return to New Zealand on Thursday.