On behalf of ExportNZ and BusinessNZ I was recently privileged to attend and support a large NZ business trade mission to India, which was 50 delegates strong and involved 5 peak industry groups, including the EMA, Auckland Chamber of Commerce and the India NZ Business Council and the NZ International Business Forum.
The aim of the business mission was to build on the two-way relationship between India and New Zealand and show them that we are here for the long haul, offering two-way benefits, rather than just turning up and expecting a traditional comprehensive Free Trade Agreement (FTA), which has been an unsuccessful strategy in recent years. The New Zealand business community has also been inspired by Australia’s recent successful trade deal with India, which followed a significant investment in the relationship in the years prior to the deal.
To follow is a short report with links attached to documents on opportunities in the different states for those that want a deeper dive.
India is a country with big numbers attached to it. Currently the 5th largest economy in the world in terms of nominal GDP, they are on track to be the third in the not-too-distant future, with projected consumer spending of $6 trillion by 2030.
In the business meetings we attended the Indian spokespeople were deservedly proud of their economic progress which is lifting millions of people out of poverty. They had also just landed a rocket on the ‘dark side of the Moon’, on a relatively modest budget when compared to what some countries spend going to the Moon and were about to host the G20 meetings.
India’s growth in the next decade will be the engine that propels the Indo-Pacific region to new heights, with 7.2 percent GDP growth now (and in some States they are growing at 20 percent) – see slides on the States.
Areas that our counterpart Indian business representatives talked about as areas for collaboration and cooperation included Medtech, Agritech, Tourism and Education, Fintech and Green-tech. They have a young population demographic whose incomes and spending are increasing every year. They are a tech savvy country, jumping over the infrastructure investment required for landlines, straight to mobile phones, for even the poorest people in the most remote parts of India.
They have simplified their internal tax system to improve the ease of doing business between the states, replacing multiple indirect taxes with a GST tax in 2017. All the states are now being ranked every year on the ease of doing business and they are competing for foreign direct investment with incentives in various ways. Check out the State slides.
Another Fintech initiative that they are keen to export to other countries is their Unified Payments Interface (UPI). It is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments under one hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience. The Indian Government used the UPI to open bank accounts for the poorest people through the Covid epidemic, so that Government assistance could be targeted to those most in need and the support payments went straight into their accounts and not via third parties.
While our more traditional food exports will still face tariff challenges and cool supply chain challenges, the growing middle class will be prepared to pay for luxury goods and services. We visited some high-end retailers and saw all the multinational global brands in India, including some iconic Kiwi ones, such as Whittakers chocolate, Zespri kiwifruit, NZ apple varieties and some beautiful Pure South lamb racks, that were retailing for NZ $90.00 each. Now that would be an expensive Barb-B-Q.
To conclude, India is well worth a visit for any business with international aspirations, but you need to do your homework. Like China, relationships and trust matter and take time to build. There are opportunities everywhere if you can find the right niche for the size and capacity of your business, whether that is on the export side or on the import side or both.
Some Kiwi produce on the shelves in India