Indian exporters can help New Zealand cut China dependence, boost shipments: GTRI

The Global Trade Research Initiative (GTRI) has recently highlighted a significant, yet largely untapped, potential for Indian exporters to increase their shipments to New Zealand. This analysis comes at a crucial time when global supply chains are undergoing significant re-evaluation, driven by geopolitical shifts and the desire of many nations to diversify their economic dependencies away from single dominant partners, particularly China.

**Background Context and What Happened:**

For decades, China has emerged as the 'factory of the world,' integrating deeply into global supply chains and becoming a primary source of imports for many countries, including New Zealand. This reliance, however, has exposed vulnerabilities, particularly during events like the COVID-19 pandemic, which disrupted global logistics, and amidst escalating geopolitical tensions. Countries are now actively pursuing a "China Plus One" strategy, seeking alternative sourcing destinations to build more resilient and diversified supply chains. It is in this context that the GTRI report identifies India as a viable and attractive alternative for New Zealand. The report specifically points out that despite a generally positive bilateral relationship and ongoing discussions regarding a comprehensive free trade agreement (FTA), India's current share in New Zealand's total imports remains minimal across key sectors such as agriculture, petroleum products, and apparel. This suggests a vast, unexploited market opportunity for Indian businesses.

**Key Stakeholders Involved:**

Several key players are central to this potential trade expansion. On the Indian side, the **Government of India**, particularly the Ministry of Commerce & Industry and the Ministry of External Affairs, plays a pivotal role in formulating trade policies, negotiating agreements, and providing export promotion support. **Indian exporters** across the identified sectors (agriculture, textiles, petroleum) are the direct beneficiaries and drivers of this potential growth. Industry bodies like the Federation of Indian Export Organisations (FIEO) and various Export Promotion Councils are crucial in facilitating trade and addressing exporter concerns. For New Zealand, its **Government** (Ministry of Foreign Affairs and Trade) would be instrumental in fostering a conducive environment for Indian imports and possibly fast-tracking trade agreements. **New Zealand importers and businesses** are the demand side, actively seeking diverse and reliable suppliers. Indirectly, **China** remains a significant stakeholder, as its current dominance in New Zealand's import market is what New Zealand seeks to reduce, thereby creating this opportunity for India. Finally, the **Global Trade Research Initiative (GTRI)** itself is a key stakeholder, providing data-driven analysis that informs policy and business decisions.

**Why This Matters for India:**

This opportunity holds immense significance for India. Economically, increased exports to New Zealand would contribute to India's overall export growth, help in achieving the ambitious target of a $1 trillion merchandise export economy, and potentially reduce trade deficits. It would generate employment across various manufacturing and agricultural sectors, boost foreign exchange earnings, and support the 'Make in India' and 'Atmanirbhar Bharat' initiatives by providing new markets for domestically produced goods. Geopolitically, strengthening trade ties with New Zealand, a prominent member of the Commonwealth and a key player in the Indo-Pacific region, aligns with India's 'Act East Policy' and its broader strategy to enhance its presence and influence in the region. It positions India as a reliable and strategic partner, contributing to global supply chain resilience and offering a credible alternative to China, thereby enhancing India's soft power and strategic autonomy.

**Historical Context and Future Implications:**

India and New Zealand share historical ties through the Commonwealth, but their bilateral trade has historically been modest compared to their potential. Discussions for a comprehensive Free Trade Agreement have been ongoing for several years, facing challenges primarily related to market access for agricultural products and dairy. This GTRI report could inject new momentum into these negotiations, highlighting the strategic imperative beyond just economic gains. In the future, if India successfully capitalizes on this opportunity, it could lead to a more robust bilateral trade and investment relationship. This would necessitate addressing challenges such as quality standards, logistics, competitive pricing, and non-tariff barriers. A successful diversification by New Zealand towards India could also serve as a blueprint for other nations seeking similar supply chain adjustments, further cementing India's role as a global manufacturing and export hub. This move aligns with broader global trends of de-risking supply chains and building partnerships based on trust and shared values.

**Related Constitutional Articles, Acts, or Policies:**

India's engagement in international trade is guided by several constitutional provisions and policy frameworks. **Article 246** of the Indian Constitution, read with the Seventh Schedule, places 'Trade and Commerce with foreign countries; import and export across customs frontiers' under the Union List (Entry 41), granting the central government exclusive power to legislate on these matters. **Article 51**, a Directive Principle of State Policy, encourages the State to 'foster respect for international law and treaty obligations' and 'promote international peace and security,' providing a constitutional basis for engaging in international trade agreements and promoting global economic stability. Key policy instruments include India's **Foreign Trade Policy (FTP)**, periodically updated by the Ministry of Commerce & Industry, which outlines the government's strategy for boosting exports and managing imports. Schemes like the Remission of Duties and Taxes on Exported Products (RoDTEP) aim to make Indian exports more competitive. Legislation such as the **Customs Act, 1962**, and the **Foreign Exchange Management Act (FEMA), 1999**, govern the operational aspects of international trade and foreign exchange transactions in India. The 'Make in India' and 'Atmanirbhar Bharat' initiatives are overarching policy thrusts aimed at enhancing domestic manufacturing capabilities and reducing import dependence, while simultaneously promoting exports, making India a stronger global trade partner.