India trade deal raises questions over transparency, migration and investment clause

Summarised by Centrist

BusinessDesk senior correspondent Dileepa Fonseka says the New Zealand-India free trade agreement is hard to judge fully because the text has not yet been released.

Speaking to RNZ, Fonseka said “part of the issue is that the text hasn’t been released”, but the bigger concern is that “there were two different stories almost immediately from the get go” from the Indian and New Zealand governments about what the deal contains.

The agreement is due to be signed in New Delhi on April 27, with the full text expected after signing.

Fonseka said there are clear trade gains for some exporters, including tariff reductions on apples, honey, kiwifruit and wine. Wine could be especially valuable because India is one of the few major markets where younger consumers are drinking more, while consumption falls in many Western countries.

The truth about the India-NZ Free Trade Agreement

This could force voters to abandon Labour and National at the next election.

1News didn't provide any valid counter-argument of why the India-NZ Free Trade Agreement isn't good for New Zealand. Both National and Labour are… pic.twitter.com/pUcDE3jQvG

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But the contentious parts are migration, student settings and the US$20b investment target, worth roughly $33b to $34b in New Zealand dollars depending on exchange rates.

On migration, Fonseka said the deal creates “a new class of visa” for Indians to come to New Zealand, alongside provisions that lock in aspects of the status quo for Indian students, including work rights.

“Perhaps a future government” might have wanted to change those settings, but the agreement could take “that option off the table,” he said.

Fonseka said the migration concessions appear limited, with “under 1700 per year” under the new visa and a maximum of 5000 visa holders at any one time.

Fonseka said the US$20b figure is “definitely in the agreement”, but there is disagreement over whether it requires promotion of investment, serious efforts to encourage investment, or something stronger.

He said India’s commerce minister has referred to possible “clawback” if the investment does not occur, giving the clause “a bit of teeth”.

Editor’s note: Fonseka said the migration concession appears modest, with “under 1700 per year” under the new visa and a maximum of 5000 visa holders at any one time. But the deal also appears to lock in existing student and work-right settings, landing after record levels of Indian migration to New Zealand in recent years. That may make even limited new settings sensitive for voters already uneasy about immigration levels.

Indian citizen migration to NZ, Stats NZ annual data

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Read more over at RNZand The Beehive****

Image: MEAphotogallery

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