New Zealand’s Relationship With India Is in Trouble

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New Zealand’s Relationship With India Is in Trouble

Despite New Zealand’s once-ambitious plans, the relationship has stagnated, if not declined outright, over the past five years.

New Zealand’s Relationship With India Is in Trouble

Indian External Affairs Minister S. Jaishankar (left) meets with New Zealand Foreign Minister Nanaia Mahuta in Wellington, New Zealand, Oct. 5, 2022

Credit: Twitter/ Dr. S. Jaishankar

New Zealand’s relationship with India is not in good health. That’s the underlying message from a rare visit to New Zealand by India’s external affairs minister, Dr. Subrahmanyam Jaishankar.

Jaishankar met with his New Zealand counterpart, Nanaia Mahuta, last Thursday – but only for an hour.

At a press conference with Mahuta in Auckland, Jaishankar was publicly critical of New Zealand’s unwillingness to renew visas for Indian students who had left New Zealand during the COVID-19 pandemic and called for ”fairer and more sympathetic treatment.”

Mahuta’s response to the criticism was to pass the buck to Michael Wood, New Zealand’s immigration minister, who was conveniently not present, and to point to hardships suffered by New Zealand students themselves.

Jaishankar reiterated his criticism at other engagements during his trip and on Twitter, and the comments dominated Indian media coverage of his five-day visit to Auckland and Wellington.

Despite the usual pleasantries, there was a sense that India had lost patience with New Zealand – a sentiment that was underlined by Jaishankar’s later observation in Wellington that “there is a larger world out there.”

Even more troubling from New Zealand’s perspective was the extraordinary admission by Mahuta that a free trade agreement was “not a priority for New Zealand or India.” Instead, Mahuta could only point to potential economic cooperation in “niche areas” such as digital services and “green business” – a seemingly underwhelming approach that was endorsed by Jaishankar.

It is a far cry from the bold and ambitious India strategy that was launched by New Zealand to much fanfare in February 2020, when New Zealand’s then-foreign minister, Winston Peters, travelled to India.

The strategy, called “Investing in the Relationship,” listed a free trade agreement as one of the major goals. But the underlying theme of the blueprint was the need for a more long-term, sustained commitment by New Zealand to forging ties with the much larger India. To this end, the plan called for “more frequent high-level government engagements to build the trade, economic, political and security aspects of the relationship.”

Of course, the timing of the launch of the strategy turned out to be unfortunate. Within weeks of Peters” visit to New Delhi, most of the world had entered some form of lockdown to combat the COVID-19 pandemic. But the overarching principle – that New Zealand needs to put far more time and effort into the India relationship, without necessarily expecting an immediate pay-off – still holds true.

Trade figures demonstrate the difficulties New Zealand’s relationship with India is facing.

While New Zealand’s exports to India were approaching 2 billion New Zealand dollars annually in 2017, they have since collapsed to under NZ$800 million.

The impact of COVID-19 explains much of this slide, but by no means all of it. The initial decline began in 2018.

In fact, the deterioration has been so dramatic that India now ranks only 15th in the list of New Zealand’s biggest trading partners. As recently as 2016, India was New Zealand’s 10th biggest trading partner. For comparison, New Zealand now sells less to India than it does to the United Arab Emirates.

Moreover, Jaishankar’s forthright criticisms of New Zealand’s handling of visas suggest that India is in no rush to encourage its citizens to head back to New Zealand now that the COVID-19 pandemic has eased.

Despite the warning signs, New Zealand’s Labor Government has shown only limited interest in nurturing the relationship with India, even allowing for COVID-19 travel disruptions.

To his credit, New Zealand’s trade minister, Damien O’Connor, did at least fly to India last month, albeit only for a brief two-day visit. But other than that, high-level engagement has been sparse.

Last week’s visit by Jaishankar would have been an opportune moment for Prime Minister Jacinda Ardern to signal an intention to visit India herself – as she did with China in August. But neither Ardern nor Mahuta gave any hint that a visit to New Delhi is on the horizon.

Even while India’s external affairs minister was in New Zealand, Ardern only held a sideline meeting with him at an Indian community event in Auckland.

To find a contrast with New Zealand’s experience, one only needs to look to Australia, which hosted Jaishankar this week. The press conference between Jaishankar and Penny Wong, Australia’s foreign minister, seemed particularly warm. Wong was keen to point out that she had already met her Indian counterpart seven times since she became foreign minister in May.

And from the Indian side, there was no parallel in Canberra to the criticisms Jaishankar had expressed about New Zealand’s government while in Wellington and Auckland.

The Australia-India relationship has undoubtedly blossomed since the revival of the Quadrilateral Security Dialogue (or Quad for short, an arrangement that also includes Japan and the United States) in 2017, but there is more to it than just that.

Australia and India entered into a Comprehensive Strategic Partnership in 2020. And this year, they signed a free trade deal with India that will eliminate tariffs on over 85 percent of Australian exports. The deal is not perfect – it includes wine and sheep meat, but it completely excludes dairy. Nevertheless, India is already Australia’s seventh-biggest trading partner – and growing.

The current strength of India’s relationship with Australia – and the relative weakness of ties with New Zealand – seems all the more remarkable when the current geopolitical fault line of Ukraine is brought into the equation.

Australia is one of Ukraine’s biggest supporters – and one of the top 10 donors of military aid. By contrast, India has a very different position on the war. New Delhi has steadfastly avoided joining the Western-led coalition which is backing Kyiv. Indeed, in Canberra, Jaishankar was quizzed by media on India’s ongoing ties with Russia and its abstention in key U.N. votes criticizing Moscow.

But the differences have not seemed to harm relations between Australia and India. Instead, the two countries have effectively agreed to disagree on Ukraine and to work on shared interests in other areas. In a time of extreme geopolitical polarization, this is an achievement in itself.

While New Zealand has backed the West on Ukraine, it has done so in a more measured way than Australia – which in theory should make it easier to find common ground with India. Yet the India-New Zealand relationship has stagnated, while Australia-India ties are riding high.

In Wellington, Jaishankar said New Zealand’s relationship with India was “due for refresh.” He is not wrong. But a reset will take time – and it will need leadership.

This article was originally published by the Democracy Project, which aims to enhance New Zealand democracy and public life by promoting critical thinking, analysis, debate, and engagement on politics and society.