For some time India has been seen as a big opportunity for New Zealand businesses, but an opportunity with challenges
Often acknowledged as a huge opportunity at scale for New Zealand businesses, but also a challenging partner given the lack of a free trade agreement, India is coming into focus for a growing number of kiwi companies as the regional situation in Asia evolves.
Our experienced panellists, New Zealand High Commissioner to India David Pine, India New Zealand Business Council (INZBC) President Sameer Handa ONZM and Esther Guy-Meakin of the NZ Meat Industries Association, shared their thoughts on the future of the NZ-India trade and business relationship with moderator Sandeep Sharma, a UC Business School alumnus and INZBC South Island head.
David Pine acknowledged that there hasn’t always been a natural trade and economic ‘fit’ between India and New Zealand. New Zealand has traditionally focused on exporting and attracting inward foreign investment. Whereas India has been focused on investment attraction itself, from foreign partners with the necessary acumen and deep pockets. We need to rethink how we can meet India’s current needs.
But Pine said India’s political and geo-strategic focus is evolving, and it increasingly recognises that it will prosper by doing business with companies based in transparent democracies that play by the rules. Trade relationships will form part of wider bilateral partnerships with such countries, as evidenced by India’s renewed exploration of free trade agreements with the EU and Australia. This offers fresh opportunities for New Zealand to think carefully about how it can develop its own partnership.
As one example, New Zealand companies achieving excellence in sectors relevant to India could look to partner with experienced investors in Australia, Singapore or the Middle East to enter the Indian market at the right scale, Pine suggested.
According to Sameer Handa, sectors ripe for further development outside New Zealand’s traditional primary produce export sector include pharmaceuticals (with 60 per cent of NZ pharmaceuticals already imported directly or indirectly from India), IT and virtual payroll support services, education and tourism (post COVID) and textiles. Considering India in the light of diversifying global supply chains makes sense.
Brand recognition in India can be a struggle for New Zealand companies
Above all, doing business with India requires significant investment in personal and business relationships. Esther Guy-Meakin noted that one visit to market will not open the door. Nor will three, four or even 10.
David Pine identified a further, related ingredient in the mix for New Zealand companies that have thrived there: “They love the place”. He suggested kiwis ask themselves if they really do, after the first visit – for those that could say yes, it could prove to be a fascinating and rewarding opportunity.
Sameer Handa endorsed the necessity of repeat market visits, but pointed out that the COVID situation is actually working in New Zealanders’ favour right now for those who wish to explore – Indian partners have accepted online relationship-building as a current necessity.
Handa and Guy-Meakin emphasised that India should not be viewed as a single homogenous market. There are wide variations across states – New Zealand could even consider concluding bilateral economic agreements with specific states, Guy-Meakin suggested, provided they were WTO-consistent. It was also important for companies to position themselves in the correct niche segments of these very large markets.
David Pine admitted that COVID has impacted the bilateral trade relationship in numerous ways, especially in the education and tourism sectors, as well as increased logistics costs. But some areas were still developing naturally: the rise of e-commerce, which is growing at an estimated 20 percent per year in India, required little government assistance for example. David identified the resumption of negotiations of direct bilateral air links, and the establishment of an annual trade and economic “New Zealand and India Inc.” dialogue involving both business and government (agreed as far back as 1986 but never implemented), as high on his wish list for the future.
Lastly, Sameer Handa encouraged New Zealand companies which have been successful in India to show the way for others to follow. He said we needed to celebrate and share success more, as a country.
The Foundation has valued the opportunity to work with the University of Canterbury to deliver a diverse series of Asia business webinars in the Hihiko | Inspire series. Recordings of all four webinars in the series can be accessed on the UC website here.