Engagement with India gathers momentum
Private talks on a national New Zealand strategy for India are shifting into the public arena. The news mirrors discussions in past months around the need for New Zealand to develop a national strategy for China.
At the recent Business Leaders’ India Forum in Auckland, Secretary of Foreign Affairs and Trade John Allen told delegates of New Zealand’s plans for engaging with the huge Indian market.
“The good news is we are developing a plan involving government agencies, the private sector and the Indian diaspora,” he said. “The bad news is that not everyone has heard about it yet.” Allen added that, as a small country, New Zealand must be ‘joined up and working together’ in order to ensure leverage in India.
Don Rae, NZTE’s International Market Manager – India & South/South-East Asia, said that, as far as he is aware, this is the first time the national strategy has been announced in public.
“Government agencies all have their own business plans and we all engage with the Indian market in different ways and with different language,” he said. “So a national strategy that has clearly articulated shared goals, and shared messaging and understanding will be a very powerful mechanism.”
Rae says he understands the Indian initiative is the first of a series of national strategies to be developed with New Zealand’s key trading partners. He says he believes a co-ordinated national strategy will make a material difference.
“This platform will provide a mechanism for us to communicate across all government departments and to encourage people [to understand] the importance of people-to-people relationships at senior official, as well as at ministerial, levels. In India those relationships lead to business.”
Forum delegate Shayne Blake welcomed the idea of a national strategy for India saying it would bring continuity of approach from the government ‘rather than individual departments changing their ideas along the way’.
Blake, a senior associate at trade, business and investment facilitation company India Horizonz, said a national strategy would be especially useful if created as a bi-partisan arrangement rather than representing one particular government’s policy. “We’ve got to think in terms of 10-, 20- or 30-year horizons in relation to countries like India. We can’t think in two- or three-year cycles.”
The Business Leaders’ India Forum was the fourth in a series of conferences organised this year by the Ministry of Foreign Affairs, NZTE and the Office of Ethnic Affairs.
Minister of Ethnic Affairs Pansy Wong described the forums as platforms on which members of ethnic and mainstream business communities can interact with each other and with relevant government agencies.
The Indian forum takes place as New Zealand and India work towards the second round of negotiations on a proposed Free Trade Agreement (FTA) between the two countries.
New Zealand Trade Minister Tim Groser and Indian Commerce Minister Sri Anand Sharma announced the start of FTA negotiations at the end of January this year. Officials held the first round of talks in April 2010 in Wellington.
Minister Wong said that in the year to August 2009, New Zealand’s exports to India totalled $709 million: an increase of almost 200 percent on New Zealand’s exports to India from 2007. Total imports and exports to India reached $1 billion in 2009.
High Commissioner of India to New Zealand Admiral [retd] Sureesh Mehta told forum delegates that India is now the world’s third largest economy, having recently overtaken Japan.
India’s share of global GDP is now 6.4 percent, he said, while Japan has 6.1 percent. The US and China rank first and second with 19 percent and 16 percent respectively.
He emphasised that India, which has enjoyed 28 years of high growth, has been largely insulated against the global economic crisis. “The drivers of growth in India are different from drivers in other parts of Asia,” he said.
“In recent years, India’s economic growth has been domestically driven. We have relied very heavily on the services industry and internal consumption. And there has been great development of high-technology capital-intensive industry.
“This compares with East and Southeast Asian countries that have mostly relied on exports or manufacturing, investment from abroad, and a lot of low-technology labour-intensive industry.”
He noted the Indian Government is creating a large number of new schools and universities and suggested New Zealand organisations may want to help set up such institutions in India in partnership with local Indian interests.
“This model will be for more sustainable than getting Indian students to come to New Zealand to study.”
Subhas DeGamia, CEO of ANZ India, described India as a ‘keen, chaotic and incredibly entrepreneurial economy’. He said recent McKinsey research on the urbanisation of India shows there will be 590 million people living in its cities by the year 2030 (see additional information after article).
“That’s nearly twice the population of the United States today.And there will be a 270 million net increase in the number of working age people in India by 2030.” He cautioned Kiwi companies not to be daunted by the scale of India. “There are many segments and sub-segments, and access is getting easier.
“New Zealand expertise is needed in India. There are opportunities in areas such as clean energy, aviation training, food technology, agribusiness, recreation and sports technology.” ANZ will open its first branch in India, in Mumbai, in the first half of next year.
Asia New Zealand Foundation board member and international businessman Tony Nowell said forum members raised a long and varied list of issues for discussion. These included overcoming cultural barriers and networking difficulties, and how government could work better with industry to improve market access.
Delegates were also keen to find out how New Zealand could engage better in India at the industry and sector level rather than simply as individual companies.
Nowell said forum members raised issues around New Zealand attitudes towards doing business with India: especially ideas around risk and the commercial realities of markets that may operate in very different ways.
“They also raised the idea of having Indian Kiwis or Indian business people from India sitting on the boards of New Zealand companies that are targetting India,” he said. “And that could be said of many other companies and countries as well.”
Other delegates discussed the need for direct flights to India, the importance of services opportunities and the need for New Zealand companies to be market-led.
“The conference was a very good example of NZ Inc starting to work,” said Nowell. “The public and private sectors were sharing ideas and listening to each other. “I’ve been to many such events over the past decade. Some of them are a waste of time, some are of questionable quality. This forum was high-quality: undoubtedly.”
- by Ruth LePla
Additional information
• As part of its unofficial diplomacy programme, in September 2010 Asia:NZ will host a Track II return visit by India’s Institute for Defence Studies and Analyses. The Indian academics will meet local organisations and conduct research to be published in a forthcoming Outlook report on India’s perspective of New Zealand’s place in Asia.
• For more information on the urbanisation of India see latest research by McKinsey Global Institute. ‘India’s Global Awakening: Building inclusive cities, sustaining economic growth’. Published April 2010.
• For comparative information on the urbanisation of China see ‘Preparing for China’s urban billion’. Published February 2009 also by McKinsey Global Institute.
• MFAT’s bi-monthly publication ‘Business Link’ provides regular updates on New Zealand’s trade agenda. Note that the June/July 2010 issue is the last to be published in hard copy. You can view it online here. To be added to MFAT’s mailing list tfor future electronic issues, email your name, business and email address to tplu@mfat.govt.nz
Related pages
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A strategy for Asia? - opinion piece by Asia:NZ Executive Director Dr Richard Grant
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China: how do we get what is best for New Zealand? - opinion piece by Asia:NZ Chairman Hon Philip Burdon
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Asia:NZ research reports on India:
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Next Stop India: A Guide for New Zealand Business published together with India Case Studies.
Photos:
1) Subhas Degamia CEO ANZ India, Vijaya Vaidyanath CEO Waitakere City, John Allen Secretary of MFAT
2) Asia:NZ Board member Tony Nowell and Minister Pansy Wong
3) Admiral (Retd) Sureesh Mehta, PVSM, AVSM
