27 Oct 2016

Indian PM to work towards 'early conclusion' of trade deal

9:15 pm on 27 October 2016

India has given its strongest indication yet it wants to finalise a free-trade deal with New Zealand.

India's prime minister Narendra Modi (right) and John Key in New Delhi on Wednesday 26 October.

John Key met Indian Prime Minister Narendra Modi in New Delhi on Wednesday. Photo: AFP

Following a a meeting with Prime Minister John Key in New Delhi, his Indian counterpart, Narendra Modi, said he had agreed to work towards an "early conclusion" of a comprehensive economic cooperation agreement.

Free trade talks between New Zealand and India started in 2011 and after 10 rounds of negotiations the process has stalled.

"I would like to mention food processing, dairy and agriculture and related areas in their supply chain as some of the areas of particular potential for bilateral cooperation," said Mr Modi after the meeting on Wednesday.

"New Zealand's strength and capacity in these sectors can combine with India's vast technology needs to build partnerships that can benefit both our societies.

"We also agreed that actions by both governments should also promote greater business connectivity, including through movement of skilled professionals, between our two economies and societies.

Likening the two countries' economic ties to a cricket match, Mr Modi indicated the relationship was moving into a more active phase.

"In our ties, we have moved from fielding at long off to taking a fresh guard at the batting pitch. Defensive play has given way to aggressive batting."

Mr Key said it was a significant step foward.

"Both Prime Minister Modi and I are committed to creating the business environments in our countries which allow our people to get ahead, to create jobs and opportunities and to create prosperity for our people.

"Streamlining trade rules through high quality trade agreements will encourage that."

New Zealand is keen to get something signed with India, which by 2026 will become the most populous country in the world.

Mr Key said when the head of the Indian government gave instructions to the bureaucracy it really moved things along.

"They use the words economic partnership, which is just the words we use when we did the FTA with Taiwan.

"They were the most forward-leaning statements around a free trade agreement we've heard out of the Indian government."

"He wants to make progress relatively rapidly and he wants it to be comprehensive."

Two-way trade between New Zealand and India is worth $2.5 billion and a free trade agreement is expected to substantially increase that.

Mr Key said negotiators would now have some clear instructions to go into another round of talks.

The two leaders also discussed India's bid to join the nuclear suppliers' group, and Mr Key said New Zealand would continue to work with the group to consider India's membership.

The prime minister extended support for India to become a member of the United Nations Security Council, while Mr Modi made a commitment to visit New Zealand soon.

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