Even since India began liberalising in the 1990s, New Zealand’s export portfolio is hardly attractive.
Hindu beliefs mean imports of dairy products are strongly discouraged and beef imports are forbidden. More orthodox Hindus aren’t keen on any type of meat consumption, including lamb.
Historically, New Zealand could have used Gandhi’s and modern India’s commitment to secularism to argue that’s all very well for Hindus, but what about the Muslim minority?
That argument wouldn’t work with Prime Minister Narendra Modi’s Hindu-nationalist Bharatiya Janata Party (BJP).
New Zealand also has long-standing differences with India over its refusal to sign the Nuclear Non-Proliferation Treaty – with only Pakistan, Israel and South Sudan – and to build its nuclear deterrent.
India has also tripled its greenhouse gas emissions since 1990 and is now the world’s third-biggest emitter, responsible for 7.8% of the global total.
With its ambitions to again be a major world power, India never appreciated a pipsqueak country like New Zealand lecturing it on anti-nuclearism, climate change or free trade, especially as a white-majority former colony of the hated British Empire.
When New Zealand pushed for an FTA, India would say it wanted free trade in labour, code for the open borders we have with Australia, or at least much greater access for Indian immigrants, including for family reunification.
New Zealand would say our relationship with Australia is different, and India would ask why.
Given such challenges, it made sense that successive New Zealand governments decided it was best to negotiate trade access issue-by-issue rather than keep their dreams of a grand FTA alive.
It doesn’t matter whether Luxon knew this background when making his startling election promise. Whether wise or not, the pledge was exactly the sort of bold commitment voters thought they were getting with Luxon and he then doubled down to try to do the seemingly impossible.
The progress since, including this week’s relaunch of formal negotiations, and the chance a meaningful deal may even be concluded on Luxon’s apparently unrealistic timeline, is entirely down to the Prime Minister’s own leadership and commitment.
Moreover, whether through foresight or luck, Luxon’s big India punt now seems particularly prescient, with China acting so aggressively towards Australia and New Zealand just as the US risks becoming an unreliable economic and security partner.
Taking two planes full of supporters was as eccentric as the initial FTA promise, but sent a message of how important New Zealand and Luxon personally regard India, as did spending a week in India in contrast to Luxon’s usual fly-in-fly-out diplomacy.
The membership of the delegation also underlined that Luxon doesn’t see the relationship as limited to commerce. This time, the usual 40-odd business people were joined by 20 Kiwi leaders from the Indian diaspora, including former Governor-General Sir Anand Satyanand, plus three ministers and representatives from the sporting and cultural worlds.
Then, at the Raisina Dialogue in New Delhi, Luxon gave perhaps the best speech on geopolitics of any recent New Zealand Prime Minister and certainly the best ever on India’s emerging role.
It stands in stark contrast to the glib nonsense he serves up domestically on everything from economic policy to school lunches – but at least suggests he might be capable of better back home if he tries.
His choice to visit the Hindu Swaminarayan Akshardham temple in Delhi rather than taking the more conventional trip to Agra to visit the Muslim Taj Mahal was a brilliant piece of diplomacy in terms of influencing a BJP Government.
The cute street-cricket scene was more about Luxon’s interests than Modi’s, but can’t hurt.
As Modi’s and indeed all Indian governments have wanted since it opened to the world in the 1990s, Luxon spoke of India as a great power with an essential geostrategic role rather than just as another former part of the British Empire with a growing middle class to which another former colony might flick a bit more milk powder, meat, fish, fruit, wine and logs.
Luxon emphasised that it is in India and New Zealand’s interests that India plays a more assertive role befitting a great power in checking China’s, Russia’s and now it seems even the US’ dangerous ambitions.
Likewise, both India and New Zealand must redouble their efforts to reduce reliance on the now politically volatile Chinese and American markets, both for two-way trade in goods and services and for investment.
Skilfully making the latter point in the context of the former, Luxon dropped his cheap salesman’s shtick, which had been on display as recently as the investment summit in Auckland and which so many New Zealand voters have also come to loathe, to the detriment of his own and his party’s poll ratings.
If you think this column makes too much of Luxon’s success in India, consider this: when was the last time a New Zealand Prime Minister made a commitment to something difficult that the experts said was implausible, and then followed it through to make it happen?
Jacinda Ardern’s Kiwibuild and light rail projects were certainly implausible, but didn’t happen. Key’s cycleway did get built but fails the difficulty test.
Luxon’s India FTA negotiations may yet fail but show an ambition altogether absent from his quarterly plans, which consist only of things the bureaucrats have assured ministers are certain to happen anyway.
With Nicola Willis warning last week that she expects the Budget’s forecasts to reveal a still worsening fiscal outlook, due to Treasury’s rising borrowing costs and even yesterday’s positive GDP news still delivering a -0.5% recession in the 2024 calendar year compared with 2023, the Prime Minister’s attention must turn to the absolute mess New Zealand finds itself in after 15 years of reckless borrowing under the Key and Ardern governments.
He might usefully drop his usual blather on the economic outlook and his timid response to fix it, and instead treat New Zealand voters with the seriousness and depth he displayed in New Delhi.
Voters are ready for it, he’s proven he can do it, and he and National might even go up in the polls as a result.
