India and New Zealand Relation, Areas of Cooperation and Challenges

Context: Prime Minister of New Zealand, Rt Hon Christopher Luxon, is on an official visit to India.

India and New Zealand Relation: Areas of Cooperation

Check here all aspects of India and New Zealand Relation in different areas:

Historical Relation

• Early Indian Migration: Indians began arriving in New Zealand in the late 18th century on British East India Company ships.
  • Early migrants were primarily from Gujarat and later from Punjab.
  • Formation of the Auckland Indian Association in 1920 (centenary celebrated in 2020).
• Diplomatic Relations: Both countries became independent in 1947.
  • India established diplomatic representation in 1950 with a Trade Commission, later upgraded to a High Commission.
• Shared Similarities:
  • Commonwealth membership.
  • Common law practices.
  • Democratic governance focused on diverse communities.

Political, Defence, and Security Cooperation

• Parliamentary Engagement: Regular parliamentary delegation visits.
• Defence Collaboration: Increased participation in military exercises and staff college exchanges.
  • Regular port calls by naval ships (e.g., Tarini at Lyttelton and HMNZS Te Kaha at Mumbai).
  • The signing of the India-New Zealand MoU for Defence Cooperation to establish regular bilateral defence engagement.
• Maritime Security: India’s participation in Combined Maritime Forces and cooperation under Command Task Force 150.
  • New Zealand’s interest in joining the Indo-Pacific Oceans Initiative (IPOI).
  • Discussions on maritime cooperation at the National Maritime Heritage Complex (NMHC) at Lothal.
• Capacity Building: Regular officer training exchanges at Defence Colleges.

Trade, Investment, and Financial Cooperation

• Trade: Current bilateral trade at US$2.83 billion indicates significant untapped potential.
• FTA Negotiations: Agreement to launch negotiations for a balanced, comprehensive trade agreement.
• Digital Payments: Discussions on early cooperation in the digital payments sector.
• Customs Cooperation: Signing of the Authorized Economic Operators Mutual Recognition Arrangement (AEO-MRA) under the Customs Cooperation Arrangement (CCA) (2024).
  • AEO-MRA facilitates smoother trade by easing the movement of goods between trusted traders.
• Sectoral Cooperation in Horticulture and Forestry: Memorandum of Cooperation on Horticulture to promote knowledge sharing and research exchanges.
  • Development of post-harvest and marketing infrastructure.
  • Letter of Intent on Forestry Cooperation for policy dialogues and technical exchanges.
• Tourism and Air Connectivity: Recognition of tourism’s role in enhancing economic ties and mutual understanding.
  • Update to the India-New Zealand Air Services Agreement to support direct flights.
  • Encouragement for airlines to commence non-stop flights between India and New Zealand.

Science, Technology, and Disaster Management

• Technology Partnerships: Strengthening collaboration in research, innovation, and commercialization of technologies.
• Climate Change Cooperation: New Zealand’s membership in the International Solar Alliance (ISA) (since 2024).
  • New Zealand’s membership in the Coalition for Disaster Resilient Infrastructure (CDRI).
• Earthquake Mitigation: Work towards a MoU on Earthquake Mitigation to enhance preparedness and response capacity.

Education, Mobility, and People-to-People Ties

• Education: Signing of a refreshed Education Cooperation Arrangement.
  • Expansion of Indian student access to New Zealand education institutions.
• Skilled Migration: Agreement to negotiate skilled worker mobility under a trade agreement.
  • Addressing irregular migration issues.
• Sports: MoU on Sports Cooperation in cricket, hockey, and Olympic sports.
  • Sporting Unity events in 2026 to celebrate 100 years of sporting ties.
• Traditional Medicine: Expert discussions on knowledge exchange and collaboration.
• Cultural Ties: Growing New Zealand interest in yoga, Indian music, dance, and festivals.
  • Promotion of bilateral cultural exchange.

What are the Challenges between India and New Zealand Relation?

• Trade Negotiation Barriers: FTA negotiations, initiated in 2009, face delays due to India’s protectionist policies.
  • High tariffs on agriculture and dairy products remain a sticking point.
  • India’s focus on domestic food security complicates trade liberalization.
  • Eg., New Zealand, a major exporter of dairy products, has been keen to access the Indian market for selling milk powder and dairy products.
    • However, India has opposed this due to concerns within its domestic dairy industry.
• China’s Growing Influence: China’s strategic agreements in the Pacific (e.g., with the Cook Islands) create pressure on New Zealand.
  • New Zealand’s economic reliance on China complicates its foreign policy balancing act.
• Geopolitical Differences: Historical differences over India’s nuclear policies have strained ties in the past (e.g., New Zealand’s opposition to India’s nuclear tests (1998)).
  • New Zealand’s traditionally cautious approach to security alliances creates hesitation in deeper strategic engagement.
• Political Sensitivities: Concerns over India’s domestic political and human rights issues could limit diplomatic engagement.
  • Differences in political systems and governance styles create friction in policy alignment.
• Regulatory and Logistical Barriers: Differences in regulatory standards and customs procedures hinder smooth trade.
  • Complex visa processes and work permits limit mobility for professionals and students.
• Economic Asymmetry: India’s large and diverse economy contrasts with New Zealand’s smaller, export-dependent market.
  • Finding mutually beneficial trade terms is challenging due to this economic imbalance.

Way Forward

• Revive and Conclude FTA Negotiations: Address India’s protectionist concerns through phased tariff reduction on sensitive products.
  • Explore sector-specific trade agreements in non-sensitive areas like technology and services.
• Enhance Strategic Cooperation in the Indo-Pacific: Develop joint maritime security initiatives to counter China’s assertiveness.
  • Align with regional frameworks like the Quad and the Pacific Island Forum for greater security cooperation.
• Expand Economic and Trade Ties: Diversify trade beyond agriculture and dairy, focusing on technology, pharmaceuticals, and renewable energy.
  • Encourage business-to-business partnerships and investment forums.
• Boost Educational and Cultural Exchange: Establish joint research programs in climate change, clean energy, and the blue economy.
  • Simplify visa procedures to enhance student and professional mobility.
• Strengthen Collaboration on Climate Change and Sustainability: Partner on clean energy initiatives and sustainable development projects in the Pacific.
  • Support climate resilience and disaster management efforts in small island nations.
• Leverage Diaspora and Soft Power: Engage the Indian diaspora in New Zealand as a bridge for stronger economic and cultural ties.
  • Promote Indian cultural festivals and New Zealand’s indigenous Maori heritage for mutual understanding.

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