NZ Inc’s India strategies
My previous column was written from India, where I’d just arrived for meetings with Indian think-tanks, economists and academics.
Given the importance of the country, I’ve decided to spend a second column telling you what we learnt while talking to some of the best minds in New Delhi.
It’s always valuable going and seeing how other people view the world. Maybe you’re already familiar with the phrase ‘‘where you sit is where you stand’’ – the idea that your geographic position determines your outlook.
For us in New Zealand, we look around and see Australia and the Pacific. In India, looking west means looking to Pakistan and looking north means looking to China – countries that India generally sees as threats.
So India looks at the world quite differently to New Zealand. One example of this came up in the discussion about the term Indo-Pacific – our Indian friends were almost horrified to learn it wasn’t part of New Zealand’s official foreign policy vocabulary. For those unfamiliar with the term, it differs from the ‘‘AsiaPacific’’ due to the greater weight given to the Indian Ocean.
It came to international attention again last year when US President Donald Trump started using it.
On the economic front, India’s own agenda is focused on the sheer weight of its domestic market. Its trade negotiators seem to see free-trade agreements (FTAs) as a zero-sum game.
While we were in New Delhi, Prime Minister Narendra Modi travelled to the Chinese city of Wuhan to meet Chinese President Xi Jinping. Both nations are among the 16 countries negotiating the Regional Comprehensive Economic Partnership (RCEP) – which New Zealand is also a party to. We heard from New Delhi commentators that India continued to be interested in RCEP, but had been burnt on previous FTAs, with imports rising but its exports not.
So while New Zealand might be focused on the prospects of an FTA with India, it will be up to us to convince them that it’s not about flooding their market with dairy, but for more sophisticated reasons that help their own interests.
One eye-popping statistic we heard about is India’s need to find an estimated one million jobs a month as young people reach working age. The idea is this will be achieved through manufacturing, a space that China has dominated for the past few decades (while India’s services industries grew). Our New Zealand delegation asked our Indian counterparts about the possible impacts of technology and automation on manufacturing jobs, but got no clear answers.
Modi’s campaign ‘‘Make in India’’, launched in 2014, was trumpeted as one way of tackling the demand for new jobs. The idea was to increase manufacturing’s share of India’s GDP from 16 per cent to 25 per cent by 2022, and create 100 million extra jobs.
But the report card on this has been mixed. Just in the past week Modi has asked ministries to crunch the numbers on the creation of new jobs – set to be a big issue as India approaches its election next year.
According to the International Labour Organisation, more than 80 per cent of people in non-agricultural employment work in informal jobs. That makes getting data (and tax) a challenge, to say the least.
If India is so domestically-focused, what could New Zealand have to offer? Our Indian counterparts spoke of New Zealand’s sustainable policies and saw our approach to environmental issues, tourism and climate change as areas for cooperation.
Another suggestion that came up in the Delhi discussions was that rather than engaging with India as a monolith, New Zealand should be coming up with strategies to engage with a few of India’s 29 states (which have contrasting approaches to trade). Most of these states are the size of a European country. But which ones offer the most synergy for New Zealand?
That’s an area where New Zealand’s Indian diaspora could help.