When New Zealand’s Foreign Minister Winston Peters met his Indian counterpart Dr Subrahmanyam Jaishankar in Australia this week, some New Zealand journalists were puzzled. Why would bilateral talks happen in a third country?
Such questions reveal more about the questioners than about modern diplomacy. In an interconnected world, it matters less where meetings occur than that they take place at all. The meeting’s context was the Raisina Down Under conference in Melbourne, hosted by the Australian Strategic Policy Institute – a conference with a big involvement of Australian politicians, both government and opposition.
As a matter of fact, the venue speaks volumes about the maturing relationships between all three countries. That Australia happily hosts such talks on its soil demonstrates the depth of trans-Tasman co-operation. It also highlights Canberra’s growing role as a facilitator of Indo-Pacific dialogue.
More importantly, the Melbourne meeting underlines the new energy in New Zealand’s engagement with India. Under Prime Minister Christopher Luxon, Wellington has embarked on its most serious attempt to strengthen ties with the world’s most populous nation.
The numbers explain why. India’s economy is now the world’s fifth-largest, growing at more than 7 per cent annually. Its middle class already exceeds 400 million people – more than the entire population of the United States. India’s rapid urbanisation and digital transformation create enormous opportunities for New Zealand exporters.
Yet for too long, New Zealand had neglected this potential. Though free trade agreement talks began in 2010, they stalled after their tenth round in 2015. For nearly a decade since, there was little progress in expanding the relationship beyond routine diplomatic exchanges.
The results are sobering. Annual two-way trade stands at just NZ$2.83 billion. To put this in perspective, New Zealand trades more with much smaller economies such as Thailand or Malaysia. Current exports to India consist mainly of wood products, wool, and fruit. Dairy products – New Zealand’s biggest export earner – barely feature due to India’s protective tariffs.
This is where Luxon’s government is determined to make a difference. Since taking office, the Prime Minister has spoken twice with his Indian counterpart Narendra Modi. Trade Minister Todd McClay has visited India six times. The intensity of engagement is unprecedented.
Luxon’s approach differs markedly from his predecessors’. Instead of treating India as just another trade partner, his government sees it as a strategic priority. Every ministerial visit to India now comes with clear objectives and timelines. Every meeting builds towards deeper engagement.
The New Zealand government’s commitment goes beyond mere rhetoric. As Luxon explained, a quarter of New Zealand’s jobs depend on trade. Companies engaged in exports pay wages 7 to 10 per cent higher than their domestic counterparts. In India, he sees an opportunity to create more such high-paying jobs.
Australia’s recent success shows what is possible – and creates urgency for New Zealand. The Australia-India Economic Cooperation and Trade Agreement, signed in 2022, delivered significant market access while respecting Indian sensitivities. Australian exporters now enjoy tariff-free access for products like sheep meat and many horticultural goods, putting New Zealand producers at a competitive disadvantage. Australian negotiators achieved this by adopting a staged approach, particularly in sensitive sectors.
Like all trade deals, the India-Australian FTA was made possible through some carefully calibrated compromises. While securing improved access for resources and agricultural products, Australia accepted graduated tariff reductions and focused initially on less sensitive sectors. They also offered India what it valued most: better visa access for skilled professionals and students.
Meanwhile, agricultural access, particularly for dairy products, remains the biggest challenge. India’s dairy sector employs millions of small farmers and carries enormous political significance. The livelihoods of more than 150 million people depend on India’s dairy industry. Any changes will always be highly political.
This sensitivity was evident in Australia’s agreement, which secured no dairy access at all. However, New Zealand could offer something unique: technical co-operation in dairy farming and processing, helping India modernise its sector while gradually building trust for market access discussions.
Such technical co-operation could be part of a broader exchange. New Zealand holds other valuable cards in these negotiations. India’s burgeoning technology sector seeks greater access to global markets. Its highly skilled IT professionals and engineers are in demand worldwide. New Zealand’s tech sector faces persistent skills shortages that Indian talent could help address.
This creates room for a pragmatic deal. While New Zealand’s dairy products might face a graduated pathway to market access, Wellington could offer Delhi something equally valuable: easier mobility for skilled Indian professionals.
The education sector offers another promising avenue. Already, more than 15,000 Indian students study in New Zealand annually, contributing over NZ$500 million to the economy. These students create lasting connections between the two countries, often becoming bridges for business and cultural exchange. New Zealand’s universities have begun forming research partnerships with leading Indian institutions, fostering innovation in areas of mutual interest.
The strategic context adds another dimension. In an Indo-Pacific region facing growing tensions, India’s role as a stabilising force becomes more crucial. As supply chains reorganise globally, India offers an alternative hub for manufacturing and services. Its democratic institutions and commitment to international law align better with New Zealand’s values than those of many other countries.
This alignment creates opportunities beyond traditional trade and investment. Climate change, maritime security and regional stability all offer scope for deeper co-operation. New Zealand’s expertise in renewable energy and sustainable agriculture could support India’s ambitious climate goals.
For New Zealand, success will require sustained commitment. One-off meetings, even at the highest levels, are not enough. What matters is the patient building of relationships and trust across government, business and civil society.
This is precisely what Peters’ Melbourne meeting represents. That it happened on Australian soil is positive on the one hand but should not matter much on the other. What counts is that it happened at all, demonstrating New Zealand’s serious intent to deepen ties with one of the world’s most important nations. The intensity of ministerial engagement under the new government – from the Prime Minister’s direct contact with Modi to Trade Minister McClay’s repeated visits to India – shows exactly this kind of commitment.
The results may not be immediately visible. Diplomatic breakthroughs rarely are. But in the quiet progress of meetings like this week’s talks in Melbourne, we can see the foundations being laid for a more substantial partnership between Wellington and New Delhi.
Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative (www.nzinitiative.org.nz)
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