Election 2023: National says securing Free Trade Agreement with India would be 'major strategic priority' if elected

The National Party says securing a Free Trade Agreement (FTA) with India will be a "major strategic priority" if it is elected to power at this year's election.

Leader Christopher Luxon also expects that if he becomes Prime Minister in October he will visit India within a year.

Speaking at the India-NZ Summit in Auckland on Tuesday, Luxon said India's growing economy and the "weight of global economic gravity shifting from the Atlantic to the Indo-Pacific" presents a "massive opportunity for New Zealand".

However, he doesn't believe New Zealand is doing enough to invest in the relationship, pointing to comments by the Government that an FTA with India is no longer a priority. He said this comes at the same time other economies are striving to reach deals with India.

"This sends a poor signal. It says New Zealand will no longer fight for the benefits that open trade delivers and it says to India we don't think you're important enough to put the effort in," Luxon said. 

Two-way trade with India in the year to December 2022 was worth $2.35 billion compared to about $2.74 billion in the year to December 2017, after Labour came to office.

Luxon said a National government would view reaching a trade agreement with India as a "major strategic priority", something which received applause from the audience. 

"Opportunities abound, not only in opening new markets for our exporters and entrepreneurs, but opening up new connections, investment and partnerships between our two countries," he said.

Speaking to reporters after his speech, Luxon also said Kiwis should expect to see him in India within a year if he becomes Prime Minister. 

Also expect his Foreign Affairs and Trade ministers to be "on the planes 365 days a year, hustling, building business for New Zealand", he said.

"It's important that actually there is so much connectivity between our two countries, there's so much opportunity for us to realise, I'm very confident that we can get a trade agreement with India in place."

"Opportunities abound," Luxon said.
"Opportunities abound," Luxon said. Photo credit: Newshub.

FTA negotiations were launched between New Zealand and India in 2010. However, the last formal round of negotiations was in 2015. Former Prime Minister Sir John Key went to India in 2016 and got a commitment to working towards an FTA, but this has never come to fruition. 

Last year, during a visit to New Zealand by India's External Affairs Minister Dr Subrahmanyam Jaishankar, Kiwi Foreign Affairs Minister Nanaia Mahuta said an FTA wasn't a priority for either country. Dr Jaishankar said the focus should be on encouraging more business collaborations.

Agriculture has been a sticking point for the talks. Kiwi negotiators have been wanting to target high tariffs so New Zealand exports can be more competitive in the market, but domestic agricultural production is important in India. 

Luxon was asked if a National government would be willing to make concessions on agriculture to get an FTA across the line.

"Dairy is always difficult in each and every trade negotiation we have across the world and with our partners," he said. "I know that's incredibly tough, but we shouldn't give up on it. We should keep trying."

He said the Government over the past six years "hasn't put a lot of effort into the Indian relationship at all".

"That's obvious to me when you've seen how well the Australians have been able to progress their relationship with India on a number of fronts," he said.

"I think it's been a function of us actually not doing the hustle and the effort and it's hard."

There have been several ministerial visits to India over the past six years. 

That includes a trip by former Foreign Affairs Minister Winston Peters and former Trade Minister David Parker in early 2020 to "send an important message about our intention to increase our investment in our relationship with India". 

Ahead of that trip, the Government released a paper on the two countries' relationship saying an FTA continued to be an objective for New Zealand.

Trade Minister Damien O'Connor travelled to India last year to "progress opportunities for agricultural cooperation" and to broaden the trading relationship. Mahuta also went in February this year.

Earlier on Tuesday, Prime Minister Chris Hipkins announced several international trips, including to Australia this year, to the United Kingdom for the King's Coronation in May, and then to Lithuania in July for a NATO leaders' summit.

He said trade would be "front and centre" during his trips. 

"I will be taking a business delegation with me to Australia and will be seeking to advance our trade deal with the UK when in London for the King's Coronation and with the EU when I attend NATO."