Prime Minister Christopher Luxon speaks to travelling media during his visit to New Delhi, India. Photo / Supplied
Prime Minister Christopher Luxon speaks to travelling media during his visit to New Delhi, India. Photo / Supplied
Herald political reporter Adam Pearse is in India covering the Prime Minister’s visit.
Prime Minister Christopher Luxon is criticising those who doubted his ability to secure a free trade agreement with India as subcontinent leaders celebrate a potential deal and the acceleration of negotiations.
However, he is imploring observers not to take literally comments from India’s trade minister suggesting a deal could be done in 60 days, nor claims the two trade ministers committed to the quickest signing of an FTA in India’s history.
It adds to the somewhat conflicting messages from Luxon on when he wants a deal to be finalised having told Newstalk ZB he and Modi expected to formalise a deal by the end of the year, earlier than his original promise to get an FTA in his first term.
Trade has dominated Luxon’s time in New Delhi and it will likely continue to feature in his engagements in Mumbai, where he will be flying tomorrow before returning to New Zealand on Saturday.
Prime Minister Christopher Luxon tours a temple in New Delhi, India with head priest Gyanmuni Swamidas. Photo / RNZ
Luxon’s commitment in the 2023 election campaign to secure an Indian FTA by 2026 had drawn plenty of doubt from trade experts who suspected India’s resistance to giving access to New Zealand’s dairy exporters would act as a major roadblock to a comprehensive trade deal as it was New Zealand’s largest industry.
While standing by his promise, Luxon’s comments ahead of his official visit to the subcontinent suggested the “real commitment” had been to broaden the relationship between the two countries.
That contributed to surprise from some quarters when it was announced formal negotiations would resume next month for the first time in almost a decade, confirmed by the Indian Government mere hours after Luxon touched down on Sunday.
Talk of the negotiations featured in speeches at a business-themed event yesterday where Dr Anish Shah, chief executive of Indian vehicle manufacturing giant Mahindra, pointed to the “meagre” level of trade between the two countries, advocating for a tenfold increase in the value of two-way trade that was currently $3.1 billion.
He then claimed the two trade ministers, India’s Piyush Goyal and New Zealand’s Todd McClay, had set a goal to facilitate the “fastest trade negotiations that they have ever done”.
Dame Therese Walsh, co-lead of the NZ business delegation to India, built on Shah’s comments by citing suggestions from event participants that “90 days would be a good timeframe”.
“If 90 days was achieved, I promise to come back here in 90 days,” Walsh said to laughs.
While she might have been speaking in jest, Goyal took the joke and ran with it.
“You mentioned that if we completed in 90 days, you promised to come back,” he said to Walsh.
“But you have not told us what if we were to complete it in 60 days!”
Prime Minister Christopher Luxon speaks at a business event in New Delhi during his visit to India. Photo / Supplied
Luxon, speaking last, addressed the trade ministers and echoed what many in the room may have been thinking about the viability of that timeframe.
“I think if you get it done in 60 days, you’ll go from two good looking men with full heads of hair to something a bit more like me, but we wish you all the very, very best.”
However, by the end of his speech, Luxon jumped on board.
“Let’s drive this relationship forward and I look forward to Prime Minister Modi signing that agreement in 60 days’ time.”
The tone from all was clearly playful but Walsh’s 90-day suggestion did align with Shah’s claim the ministers were seeking India’s quickest FTA signing, which was the 88 days it took to sign a deal with the United Arab Emirates in 2022.
Speaking to reporters, Luxon cautioned against taking the comments seriously.
“I’ll just say I wouldn’t take the 60 to 90 days literally,” he said.
“Two Prime Ministers and two trade ministers are sending messages very strongly to our respective systems that we expect them to continue to move at pace.”
“Well, we’re going to get the best deal that we can, but I’d be surprised if we could do it in 88 days.”
Luxon’s bilateral meeting with Prime Minister Narendra Modi appeared to have been the catalyst for the start of negotiations to be brought forward from next month to next week. It was expected the first in-person negotiations would take place in May but could be April depending on their progress.
It’s not the first time India has signalled interest in a deal with New Zealand. Former PM Sir John Key visited India in 2011 and 2016 when, on both occasions, Indian leaders engaged positively but the subsequent 10 rounds of talks all failed to produce a deal.
Trade Minister Todd McClay meets with his Indian counterpart Piyush Goyal in India. Photo / Supplied
Luxon yesterday said his Government had formed a better relationship with India and had proven the doubters wrong.
“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.”
He specifically criticised media reporting of his election promise.
“I told you that we will deliver a free trade agreement in the first term, you were very sceptical about that as a media, and I’m just telling you how we’re processing it so you’ve got some insight into how we are chunking it down.”
Speaking to Newstalk ZB yesterday, Luxon appeared to move up his timeline. He referenced private expectations, held by himself and Modi, that a deal with India could be finished by the end of the year, similar to the aspirations of the European Union.
However, Luxon was more cautious when speaking to travelling media in New Delhi later in the day.
“It’ll take as long as it takes.”
India sets target for 10x trade increase
Goyal, it seemed, was in the mood yesterday to set targets and believed Shah’s desire to multiply the value of two-way trade by 10 could be achieved over 10 years.
“You wouldn’t be able to work with Mr Modi and Mr Luxon if you didn’t put a responsibility and a timeframe both to that,” he said to a chuckling crowd.
“Together, there’s every possibility of achieving that 10x growth in the next 10 years if we put our heads and hearts to it, if we work in the spirit of complementary economies that we are.”
Unsurprisingly, Goyal said the focus should be placed on education and research. India had traditionally coveted enhanced access for Indian students to New Zealand’s schools and universities.
Easing barriers for skilled workers to ply their trade in New Zealand was also historically high on India’s priority list. Goyal spoke of a market of 1.4 billion people who could complement innovative New Zealand sectors.
Luxon responded in kind, describing New Zealand as a “great petri dish” for Indian businesses.
Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the Herald in Auckland, covering Covid-19 and crime.
