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Dairy imports to India from New Zealand is a big ask- Earl Rattray

A new report from the India-New Zealand Business Council takes a fresh look at the state of the relationship between the two countries. The Asia Media Centre spoke to INZBC Chair Earl Rattray about the report, and where to next in the long-running relationship.

The India New Zealand Business Council (INZBC) plays a critical role in enhancing trade and investment ties between India and New Zealand.

The council has been working hard in the post-pandemic environment to bolster economic relations between the two countries, and further foster a business-friendly environment for companies seeking to establish or expand in both markets.

Earl Rattray has a long-standing dairy industry career, both in farming, and in senior dairy industry leadership roles,  including as a founding Director of the Fonterra Co-operative Group, inaugural Chairman of the NZ Dairy Companies’ Association, and Chaiman of India-based fresh milk company Binsar Farms Ltd.

How would you like to see the New Zealand government change its engagement strategy with India?

Get Prime Ministerial buy-in for prioritising the relationship. Take a whole of government approach to the relationship, every agency working to a coherent plan. Talk less about an FTA, and talk more about what can we do to support India, and become a more welcoming country.  An FTA will be the outcome of a good relationship, not the cause of it. Business in India is heavily linked to relationships, rather than being purely transactional. The concept of brotherhood (Bhaichara) is very prevalent in India. This extends to trade.

When we spoke to India’s Minister of External Affairs S. Jaishankar last year, he told us India and NZ were ready for the “next step”. What is your view on what that should be?

Work together, be a friend not a threat on trade matters.

What more could be done by way of establishing an organisation within government to support the relationship? 

A dedicated and well-resourced organisation looking at India or South Asia, their markets, economy culture and so on. Even getting up to date trade stats with India is a grind – how can that be ?  It shouldn’t be hard to get good up-to-date market intelligence. We know the NZTE team provide a lot, we also know how stretched they are.

What are the most attractive current opportunities for New Zealand business investment in India?

That depends on a number of variables. Have good local knowledge, good on-the-ground partners, know the culture in the region you are targeting , provide a USP which is hard to replicate, have good Governance oversight, and basically anything is possible there. If it’s importing, be aware India has a “Make in India” priority. Be prepared to spend 10 years learning.

Do you agree with Chris Luxon that an Free Trade Agreement with India should be a top priority?

INZBC will agree with anyone who wants to take India seriously, but if we reference Australia’s recent trade agreement, we know it will be the outcome of many year’s work understanding India, working collegially with India and finding where our interests intersect with theirs.

Why in your view does New Zealand not have an FTA with India? 

Put simply, optics matter. India is virtually an economic universe of its own. Politically, it is a hard sell, probably impossible just now, for the Indian government to explain to its domestic audience that it has opened up its market of 1.4 billion people to New Zealand and secured access to our distant market of 5 million in return.

It’s even harder when our largest export is dairy, and India is the world’s largest dairy producing nation, and dairy there is plays such an important role in the rural economy. Everything has its time and place, expecting open access dairy imports for the sensitive categories which balance local milk supply (SMP and Fats) is a big ask.

As the Australians have shown, an FTA with India – if and when it comes – will be the outcome of a stronger relationship, rather than being the initial catalyst of it. Perhaps it’s one of those objectives best approached obliquely.

In terms of trade, what does New Zealand want from India that it can’t currently get without an FTA?

Lower or no tariffs, we can’t be uncompetitive with Australia. Clear rules around customs clearance. Phyto sanitary and Zoo sanitary protocols agreed, alignment of qualification equivalence, people-to-people movements barriers lowered, proactive encouragement of education services, greater visibility of New Zealand in India.

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