Signing of TPP may bring good news for FTA with India
Signing of TPP may bring good news for FTA with India.
Speaking at a recent finance sector focus event of the India New Zealand Business Council [INZBC], Hon. Tim Groser expressed hope that the signing of TPP, will have positive impact on the trade negotiations with India, and it may also fasten the process.
“The New Zealand Government is committed to a good quality FTA with India, but having said that, the FTA is also not a block to do bi-lateral trade with India even today.’’ Mr. Groser also said that, It’s time that smart Indian companies do businesses with smart kiwi companies”. He emphasised the need to look beyond dairy and horticulture and look at the niche technologies that New Zealand has to offer.
As part of it’s Business Beyond Barrier series, INZBC hosted a finance sector focus talk, along with Westpac. The Minister who had just returned from TPP conclusion rendered a thought provoking speech in terms of Macro perspective and narrowed it down to NZ and India bilateral trade relationship. Mr.Sood presentation was precise and well received especially the reference to the financial markets and current scenario in India. Paul knowledge particularly with reference to the Indirect Taxes of India and New Zealand was informative. Satish provided a good overview of the Economy of India and New Zealand.
With regard to the signing of the TPP, Satish Ranchhod, Senior Economist at Westpac said that the experience of past trade agreements shows that the largest gains come from creating trade opportunities that didn’t previously exist.
Satish explained his view on TPP, “Trans-Pacific Partnership (TPP) agreement provides for the complete elimination of tariffs on New Zealand’s exports to signatory nations, with two exceptions. First, there has been only a partial liberalisation of trade restrictions on dairy products. Second, tariffs on beef exports to Japan will remain, but will be lowered. Once it is fully implemented, MFAT estimates that the TPP will provide for tariff savings of $259m a year, based on today’s export volumes. This is likely to understate the benefits to New Zealand’s exporters.”
However another speaker at the event, Paul Smith, EY Partner, had a different view, “Although the TPP is by no means a perfect agreement, it is still critical for New Zealand to be part of due to the potential for massive tariff savings.”
Paul provided insights regarding the indirect tax pitfalls and opportunities that arise in Global Trade. It covered the importance of having an in-depth understanding of your supply chain to avoid the risks and maximise the opportunities. It highlighted the reasons why preferential tariffs are not delivered to exporters on a silver platter and the dangers of making assumption by contrasting indirect taxes in New Zealand to indirect taxes in India.
Satish Ranchod from Westpac gave an overview of both NZ and Indian economy. He concluded that despite a challenging global backdrop, both India and New Zealand have grown at a firm pace over the past year.
“Looking ahead, both economies will face challenges. Growth in New Zealand is expected to moderate to rates a little below trend. However, conditions in India are expected to remain firm. Overtime, we expect the ties between the two countries – both economic and social – will continue to grow”, said Satish.
Covering the political aspect was Sandeep Sood, Chargé d’Affaires a.i., High Commission of India. He spoke at length about the steadfast growth that India is showing inspite of the global challenges.
“After the fall in Chinese markets, the impact was felt even by the Kiwi Dollar, which has lost upto 20% of its value against the US Dollar. The Indian Rupee has also seen some volatility. However, economists the world over have remained positive about the Indian economy as India offers unique demographic advantages. Higher domestic consumption of about 70% of GDP, as against lower levels for other countries, offers a cushion to India’s economy; we must acknowledge that in the year 2014, the GDP of India was US$ 2.07 Trillion.”
Sandeep also mentioned that the “Make in India” initiative, which was launched by the Hon’ble Prime Minister in September 2014, has made a tremendous impact on the investment climate of the country, as shown by significant growth of overall Foreign Direct Investment, with an increase of 48% in inflows from October 2014 to April 2015. The FDI inflow under the approval route has shown even better growth of 87% during 2014-15.
According to Mr. Wenceslaus Anthony, executive committee member of INZBC, “The presence of the NZ Trade Minister and the Charge Chargé d’Affaires a.i.- Indian High Commission once again demonstrated the confidence reposed by both the Governments in INZBC.”
“The good turnout of the members was a great source of strength to the Council and INZBC will continue to provide value to its members”, said Mr. Anthony.
A value addition at this event was the MOU signed between British New Zealand Business Association (BNZBA) and INZBC during the function. Valerie Taylor, Executive Director- BNZBA- said that BNZBA were very pleased with the MOU and members of the respective organizations could now avail reciprocal benefits.
Mr. Sood was appreciative of the work done by INZBC in promoting bilateral trade between the two countries. He said, “I would like to reaffirm that the High Commission will be happy to assist for forging closer, stronger and a mutually beneficial trade relationship.”
Satish Ranchhod of Westpac commented that, “INZBC’s recent Business Beyond Barriers event provided a valuable opportunity to look at some of the key issues confronting business who trade with both India and New Zealand. Such events are a useful platform for encouraging the growing interaction between the two economies.”
Paul from EY also commended that such events should be done more, to help businesses. He said, “Business Beyond Barriers provided an excellent opportunity to network with business leaders and hear from an excellent line up of speakers”.