There is considerable scope to both widen and deepen India’s economic relations with Australia, underpinned by trade and, more importantly, investment linkages. India and Australia have a strong and mutually beneficial partnership in the energy and minerals sector. Australia is an important source of six crucial inputs, namely, iron ore, coking coal, copper, gold, uranium, and LNG. It is noteworthy that all of Australia’s primary exports are received in India at a zero tariff or very low tariff. There is significant potential for Australia to scale up investment in India, in areas including cold chains, mega food parks, bio-tech projects, the marine sector, infrastructure, clean and renewable energy, engineering and manufacturing sectors, and pharmaceuticals, apart from mining and energy related projects.
India and Australia are negotiating a Comprehensive Economic Cooperation Agreement (CECA) covering trade in goods, services, investment, and related issues. A traditional approach aimed primarily at enhanced market access would neither be acceptable; domestically nor would it do justice to the multi-faceted nature of the economic relationship between the two countries. The possibility of a fresh approach guided by trade, investment and sectoral cooperation objectives is being explored. New Zealand is a participating country in the RCEP negotiations. India and New Zealand are also pursuing bilateral negotiations for a CEPA. New Zealand is a globally recognized source of dairy and dairy products. It is also an important source of some fruits, lamb meat and wool. Some of these product areas are highly sensitive in India as regards imports. An approach similar to the one proposed for Australia should be considered for New Zealand also.
In 2018-19, India was Australia's eighth-largest trading partner and fifth-largest export market because of coal and international education. Both goods and services trade with India in 2018-19 was USD30.3 billion, and the level of investment was USD30.7 billion.
With the changing global scenario, Australia has come to look at India as an important partner in promoting regional security and stability. This led to upgradation of bilateral relationship to a ‘Strategic Partnership’, including a Joint Declaration on Security Cooperation in 2009. Over the years an array of institutional mechanism has been put in place to promote bilateral co-operation. Bilateral mechanisms include high level visits, Annual Meetings of Prime Ministers, Foreign Ministers’ Framework Dialogue, Joint Trade & Commerce Ministerial Commission, India-Australia '2+2' Foreign Secretaries and Defence Secretaries Dialogue, Defence Policy Talks, Australia-India Education Council, Defence Services Staff Talks, Energy Security Dialogue, JWGs on different issues etc.
In 2011 NZ Inc India Strategy was launched, which was a plan for India to become a core trade, economic and political partner for New Zealand. The NZ-India FTA is a crucial step toward achieving that goal.
Both countries already enjoy a strong relationship. India was New Zealand’s one of the largest trading partner with total trade in goods and services worth more than NZD 2.5 billion. Exports to India were worth NZD 1.7 billion (NZD 656 million in goods, NZD1 billion in services) with imports worth NZD 821 million (NZD 591 million in goods, NZD 230 million in services).
In 2018, two-way trade between India and New Zealand stood at US $ 2.12 bn, making India the 11th largest trading partner of New Zealand. NZ merchandise exports to India mostly consist of logs and forestry products, mineral fuels and oil, wood pulp, wood, edible fruit and nuts whereas Indian exports to New Zealand comprise of pharmaceuticals, precious metals and gems, textiles and motor vehicles. Education and tourism have emerged as main growth sectors in services. The number of tourists from India have more than doubled in the last 5 years and now exceeds 70,000 per annum.