Trade deal with India likely to be tough ask

Trade Minister Tim Groser. Photo / APN

Trade Minister Tim Groser says it's crucial that New Zealand develops a strong commercial relationship with India, which he describes as the world's second emerging superpower.

Groser - who will today join the business mission accompanying the Prime Minister on his official visit to India - says New Zealand will have to work hard to complete negotiations on a free trade agreement with India.

"The big picture is that NZ Inc has got to replicate with India what has been achieved over the last 25 years with China," says Groser. "But unlike with China, we don't enjoy first-mover advantage with India."

New Zealand was the first Western nation to cement a free trade deal with China after a carefully crafted diplomatic strategy. This involved backing China's admission to the World Trade Organisation and recognising it as a "market economy".

Anzco Foods chairman Sir Graeme Harrison agrees that achieving an FTA with India will be even more difficult.

"It's not about tariff access - we can do that. But it's all the effort that goes into relationship building that eventually smoothes the way."

He points to significant "behind the border" issues hindering the bilateral commercial relationships.

In Anzco's case, Harrison says the meat exporter is having to go through "grey channels" out of the Arabian Gulf.

"There are real issues dealing with phyto-sanitary matters that in the rest of the world would not be an issue."

Harrison, who is also chairman of the influential NZ Business Investment Forum, wants to set up an annual bilateral business forum between the two countries to cement relations.

The BIF has played an integral role in driving such forums with Japan and South Korea.

"We like the work on free trade agreements but the reality is we are stumbling,' said Harrison, who also chairs the New Zealand International Business Forum.

Sir Ken Stevens, chairman of baggage-handling technology firm Glidepath, says it helps having the Prime Minister on board. "It opens doors - we experienced that in China with the free trade agreement."