India Business Luncheon

May I begin by greeting everyone in the languages of the realm of New Zealand, in English, Maori, Cook Island Maori, Niuean, Tokelauan and New Zealand Sign Language.  Greetings, Kia Ora, Kia Orana, Fakalofa Lahi Atu, Taloha Ni and (Sign)

May I specifically greet you: Hon Pansy Wong, Minister of Ethnic Affairs; Dr Rajen Prasad, Member of Parliament; Distinguished Guests otherwise; Ladies and Gentlemen.  In the context of today's luncheon may I add the greetings: Namaste, Namashkar, Sat Sri Akal, Kam Cho, Salaam Walaikum.

Thank you for accepting the invitation from my wife Susan and I to attend this luncheon.  In particular, I would in speaking like to focus on the opportunities for business relationships between New Zealand and India.  This is an opportunity to report back to you as people who have charge of business links between the two countries that are capable of development.

The visit, some eight weeks ago, was a privilege to undertake, being the first State Visit by a New Zealand Governor-General to India.  It was also a personal honour to visit the land of my grandparents as the representative of New Zealand's Head of State.

The mission had three distinct phases.  New Delhi was largely about emphasising government-to-government links with, after an official state welcome, calls on the President, Prime Minister and a number of other senior Ministers of Foreign Affairs and Overseas Indian Affairs, for example, as well as the Leader of the Opposition.  I gave an address on India-New Zealand bilateral relations at JawaharlalNehruUniversity, visited a slum development project which has New Zealand support and hosted a reception for friends of New Zealand.

From Delhi we travelled to Mumbai where, as well as meetings with the Governor and Chief Minister, there was a strong business and tourism focus.  Tourism New Zealand has, for example, recently launched its 100% Pure campaign in Mumbai and I spoke at an event to promote tourism between New Zealand and India.  We also visited CMC Ltd which is a subsidiary of the Tata Group and is selling New Zealand computer software into the Indian market.

After Mumbai, came Hyderabad where there were also meetings with the Governor and Chief Minister and an address to the IndianSchool of Business. 

Despite its geographic and demographic size, India has sometimes been referred to as the "poor man of Asia", and referred to negatively alongside the growth being experienced by China and the so-called East Asian Tigers of South Korea, Singapore, Hong Kong and Taiwan.  Some economists used to refer to India's low growth in a derisive fashion.

But that was in the past.  Since Dr Manmohan Singh, as the then Finance Minister, introduced a package of economic changes in 1991, which have been continued by his successors in office such as Mr Palaniappan Chidambaram, India has enjoyed what can be described as considerable economic advancement. 

Annual growth has averaged more than seven percent for the last two decades, and more than nine percent in the last four years.  In terms of purchasing power parity, it is said that India's economy is now the world's fourth largest - behind the United States, China and Japan. 

The BBC, for example, during last year (2007) reported that based on current trends, India's economy would overtake that of Britain in size within a decade and that it might even surpass the United States and be second only to China by mid-century.  Reflecting this growth, India's corporate sector is also becoming increasingly influential on the world stage.

India's economic performance means it is now recognised within China as one of Asia's two major regional powers.  The two countries are the key drivers in Asia's changing economic, trade and geopolitical terrain. India's recent successful launch of its first unmanned lunar mission is not only an important scientific and engineering feat, but another reflection of its industrial and technological prowess.

While I was born in New Zealand, I have had an opportunity to visit India on a number of occasions - as a tourist, as a conference attendee, and as an accompanying person for a Prime Ministerial visit.   The transformation during the time has been remarkable.

In many Indian cities of today there are visible signs of progress and growth.  There are new office towers in central cities, new cars in the streets, new factories, shopping malls and new middle-class housing.  New airports, such as RajivGandhiInternationalAirport in Hyderabad which we passed through, are busy with international travellers coming and going in addition to the traditional three centres of Mumbai, Delhi and Chennai.  New Delhi, for example, has a modern rapid transit railway system.

The scale of India is often difficult for New Zealanders to comprehend.  For example, it is estimated India's tertiary institutions produce more than 100,000 engineering and two million non-engineering graduates a year.  The IndianSchool of Business, which we visited, is rated by The Financial Times as number 20 in its rating of the world's business schools for its MBA qualification.

But India also faces many challenges.  Whilst health and education standards have improved dramatically since independence 61 years ago, many Indians continue to live in poverty, particularly in rural areas where subsistence agriculture continues to dominate.  Massive investment in infrastructure is needed.

Given the growing size of India's economy, there is clearly much scope for trade between our two countries.  While bilateral trade has been growing steadily in recent years, to a current level of NZD$630 million, it still falls well below the potential.  Trade between New Zealand and China, for example, is now NZD$7.5 billion and this figure is expected to grow rapidly now that a Free Trade Agreement has been signed.

Most of this trade is in primary produce, wool, logs, hides, and particularly coal.  But the trade base is diversifying, with strong growth in specialised manufactured products, for example, in beyond-the-farm agricultural machinery.  In return, India exports diamonds, electrical machinery and textiles. 

The New Zealand and Indian governments are addressing this issue.  Since April 2008, officials from both countries have worked together to investigate the feasibility of a Free Trade Agreement.  This process is expected to be completed later this year. 

New Zealand and India's interests are increasingly intersecting in East and South-East Asia. Dr Sanjaya Baru, until recently Media Advisor to India's Prime Minister, described India and New Zealand in 2003 in a striking fashion by saying they were the "book ends of Asia". 

For its part, India clearly recognises the importance of East Asia, as reflected in its "Look East" policy.  In 2005 New Zealand and India joined Australia, the ASEAN states, Japan, China and South Korea as the founding members of the East Asia Summit. 

Tourism, education and film making have been the mainstay of the services trade with India. 

The number of Indians visiting New Zealand has increased 35 percent in the last five years to be now some 25,000 a year, while the number of New Zealanders visiting India has almost trebled over the same period.  India is being recognised as being one of New Zealand's fastest growing English speaking markets and growing Indian Diaspora in New Zealand is another potential area of tourism growth with special family reunion fares being offered by airlines.

Some credit for the boom in visitor numbers from India has been given to the cooperation between our two countries' film industries.   In recent years, more than 120 film crews have visited New Zealand from India, with the most famous picture being Kaho Na Pyar Hai (Say You Love Me) which was shot in Queenstown. 

On the education front, the New Zealand Government's policy of offering domestic fees for international doctorate students has been particularly attractive to Indian students. The numbers of Indian students studying in New Zealand has increased dramatically.  Understandings are that upwards of 6,000 Indian students will have studied in New Zealand this year.  A decade ago there were less than 200. 

The education relationship between our two countries is developing at both government and institutional levels.  In 2005, the two Governments signed a co-operation agreement which recognises the commitment on both sides to develop the education relationship further. 

There are now some 30 partnerships between tertiary education institutions.   These represent a number of educational linkages from academic research to certificate and diploma twinning programmes. 

New Zealand's Universities and Centres of Research Excellence are intensifying their international education activities. They recognise the importance of expanding their international research and academic partnerships to contribute to New Zealand social and economic prosperity.

The New Zealand government has supported these endeavours with more scholarships and programmes for our academics and researchers to use when they engage with their colleagues overseas.

A deeper relationship can be beneficial to both countries in a number of ways.  As India continues to grow, it will require greater resources to sustain its development.  In the current global situation it is becoming increasingly important to secure supplies of necessities like food, energy and infrastructural inputs. 

New Zealand is a secure and reliable producer of these products, and we are also an efficient agriculture producer but we lack the capacity to greatly expand the size of our production. 

What this means for us is that we need to shift into more processed, higher value products.   What this means for India is that New Zealand has developed efficient technologies and systems that can assist in the development of India's agriculture sector.  This assistance could be in a variety of areas including beyond-the-farm machinery, or supply chain management - refrigeration and distribution systems - to take two examples. 

As I foreshadowed earlier, education links between the two countries are deepening, and there are agreements between both governments and between individual institutions which exemplify this. 

As well as in education, the development of links in research and science and technology could provide substantial benefits to both countries. 

India is establishing itself as a significant global player in science and technology.  New Zealand has established expertise in several areas of interest to India including agriculture, horticulture, and environmental science.  Learning from each other's skills will yield high gains for both sides.

I hope I have established a case which says that there is much on which to grow this relationship.  The two countries also have a shared history as founding members of the modern Commonwealth and shared Westminster parliamentary and legal traditions—in addition to the shared love of sports like hockey and cricket.  In addition, more than 100,000 people of the Indian diaspora call New Zealand home. 

New Zealand and India have in the past been described as having a warm but somewhat distant relationship.  I hope that I have set a scene which, in the future, will mean that relationships will be much, much closer. 

And on that note, I will close in New Zealand's first language Maori, offering everyone greetings and wishing you all good health and fortitude in your endeavours.  No reira, tena koutou, tena koutou, kia ora, kia kaha, tena koutou katoa.