India and New Zealand’s relationship dates back to the 1800s when many Indians moved and settled in Christchurch. Today, there are more than 220,000 New Zealanders who trace back their history to Indian origin. The two states established bilateral relations in 1952; and in the same year, the New Zealand government endowed £1 million to the government of India for the establishment of India’s premier medical institute, AIIMS – on 4 April 1952, New Zealand Minister of Industries and Commerce, Hon J.T. Watts laid the foundation stone.

Sir Edmund Hillary, a New Zealand adventurer who served as New Zealand High Commissioner to India from 1985 to 1988, had already been an eminent luminary since he and Tenzing Norgay conquered Mt Everest in 1953.

In context of the economic and trade relations – India and New Zealand, in the past too, have explored measures desiring to promote and expand mutually beneficial trade and commerce between the two countries, but more recently, the two governments have taken renewed interest in expanding their ties and New Zealand has made its India relationship, a priority. 

Allied by shared interests and opportunities, the two countries are looking forward to cementing their ties with a trade deal. Both countries have in the past maintained a keen interest in trading with each other. In 2019, New Zealand was India’s 75th largest trading partner with trade in goods totalling more than $ 900 Mn. Exports to India were more than $ 521 Mn and imports to New Zealand were worth $ 378.55 Mn. 

India has grown to become New Zealand’s largest market in South and Southeast Asia for goods and services; whilst also becoming its 7th largest market globally (2019) . Several New Zealand companies such as Rakon, Glidepath and RML Engineering have taken the Indian government’s invitation to “Make in India” and have invested towards establishing operations in India. It is evident that the relationship between India and New Zealand has been growing steadily. This growth and development in bilateral ties can be further fuelled by focusing on big potential areas like tourism and air industry.

Opportunities in Tourism

Over the past decade, tourist numbers in each direction have more than doubled. In 2018, approximately 30,000 Indian tourists visited New Zealand and a similar number of New Zealanders visited India . However, there is opportunity for these numbers to grow further. 

Currently, New Zealand’s popularity as a tourist destination for Indians is quite low. So far, the country had proven to be a popular destination for those seeking self-drive itineraries and for honeymooners. But given New Zealand’s beautiful natural resources and a thriving tourism industry, Indians tourists are a potential emerging market for New Zealand. 

Unfortunately, with the global outbreak of Covid-19, New Zealand’s borders have remained closed to most international visitors since March 2020. Nonetheless, New Zealand has taken a long term approach to the challenge. With an eye on the post COVID-19 environment, Tourism New Zealand has launched a virtual campaign “Messages from New Zealand” to promote the country as a tourist destination within India. The virtual campaign is focused on highly targeted digital ads using platforms such as Facebook and Google and features everyday New Zealanders sharing video messages of hope and care with their international family, presenting a unique Kiwi perspective about what is important to them. The campaign aims to build brand appeal, consideration and preference for New Zealand for the time when borders re-open post Covid-19. 

Opportunities for the Air Industry

Another challenge to tourism is the low air coverage by direct flights. Currently, none of the airlines offer a direct flight from Auckland to Delhi, India’s largest traffic hub and the city where most New Zealanders want to start their journey in India. Air New Zealand can offer its direct service to Mumbai but so far have not started their service as they have been cautious regarding the yield it can expect in the Indian market. However, a look at growth forecasts shows that in 2018, the Ministry of Business, Innovation and Employment, New Zealand, revised its growth forecast for number of Indians visiting New Zealand upwards, to 125,000 by 2025; assuming a commensurate growth in air services. This is where the air industry can play a significant role. 

Indian airlines too can take the lead in this by adopting a long term strategic view. Having its own direct service to New Zealand can help Air India position itself as a stopover destination for New Zealanders travelling to Europe.

Laying the Foundation - Free Trade Agreement (FTA)

The two governments have been working hard to create an environment conducive to growing ties. On the trade front, India and New Zealand are in the process of negotiating a Free Trade Agreement Deal (FTA), which, when successful, would see significant benefits for the relationship between India and New Zealand. The FTA would enable New Zealand businesses to better access India’s market for consumer products and services whilst also offering more opportunities to Indian manufacturers to import raw materials from New Zealand. Furthermore, the deal would open up expansion opportunities for New Zealand’s service sectors including tourism, consultancy and education. The FTA is bound to boost investor sentiment leading to enhanced investment between the two countries.

On the whole, there are significant opportunities available to businesses to explore investments in India. Tourism and air industry are just two of the many domains that have potential for growth and a rich trade exchange. The Free Trade Agreement Deal is bound to lay the foundation on which the two countries can forge ahead towards a new era of growth and mutual enrichment. Stay tuned to know more about our take on these topics, in this 5-part blog series!
 

This blog has been authored by Advek Basoya and Agrim Aggarwal.

Read Part 2: New Zealand reaches out to India here