Luxon’s trade trip to India a success but ultimately judged by pen to paper – Editorial

Editorial

THREE KEY FACTS

• New Zealand and India will resume formal FTA negotiations from next week.
• Prime Minister Christopher Luxon signed several agreements while in the subcontinent, including one to strengthen defence ties with India.
• Two-way trade between the countries is currently worth $3.1 billion.

It helped this week that Christopher Luxon is a cricket fanatic.

The Prime Minister can speak the language in a country mad about the sport as his Government is desperate to form a long-standing partnership with it.

In 2023, when Luxon ascended to the Beehive’s ninth floor, he told New Zealanders he’d strike a trade deal with India in his first term. His pledge was met with scepticism.

After a week in India, Luxon now believes his Government has started that better relationship with Narendra Modi’s administration.

“A lot of people said, ‘Oh, it’s never going to happen’, or ‘You’ll never get a visit to India’, or ‘You’ll never actually be able to launch negotiations’. We are doing that,” Luxon told reporters.

It was almost like Luxon, having just swatted away a short-pitched delivery to the boundary, turned to the slip cordon and chirped back.

But we must remember this innings is still in its infancy. Luxon is still new to the crease and there are a few tentative pushes into the corridor of uncertainty.

Dairy remains the sticky wicket to negotiate between the two countries.

India has millions of vulnerable small-scale farmers. It wants to protect their future but its demand for milk is also outstripping supply.

US President Donald Trump’s pendulum-like decisions on global trade and tariffs also create unease.

But there is enormous opportunity in India.

It is now the most populous country in the world and on its way to being the third-biggest economy in the next decade – worth north of $30 trillion by the 2050s.

It is also an emerging superpower and defence was a big component of the delegation’s trip to India.

On his final day in India, Luxon visited the Royal NZ Navy frigate Te Kaha, which was docked in Mumbai as a symbol of the two countries agreeing their defence forces should work more closely together.

It’s not the first time India and New Zealand have tried to strike a deal.

Former PM Sir John Key visited India in 2011 and 2016, however, the subsequent 10 sessions of talks all failed.

India’s Trade Minister this week suggested a deal could be done in 60 days, while Luxon told Mike Hosking on Newstalk ZB he and Modi expected to formalise a deal by the end of the year.

Encouraging talk but also perhaps unrealistic.

If he is successful, Luxon’s commitment to secure a Free Trade Agreement with India by 2026 would drastically increase the run rate for what the chief executive of Indian vehicle manufacturing giant Mahindra described as a “meagre” level of trade.

Currently sitting at $3.1 billion, the value could increase tenfold.

The heads of Air New Zealand and Air India also announced their intentions to explore direct flights between the countries by 2028.

As India’s middle class grows, Luxon has promoted tourism as one of New Zealand’s sectors that could benefit greatly.

About 82,000 Indians travelled to New Zealand last year but it had been estimated this number could rise to 500,000.

Luxon’s tour to the sub-continent should be considered a success: he and his delegation put bat to ball, but ultimately it will be measured by whether he puts pen to paper.

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