India –NZ trade : Current Trends and Looking ahead Rahul Sen Senior Lecturer, School of Economics, Faculty of Business Economics and Law, AUT University, Auckland Fellow, NZIRI Wellington

New Zealand's total trade in Goods and Services By top 10 trading partners and India (Year-end December 2017) Rank Trading partner Total Two-way Trade   exports imports trade balance NZ$(million) 1 China, People's Republic of 14817 11265 26081 3552 2 Australia 13624 11956 25580 1668 3 European Union 8614 12981 21595 -4368 4 United States of America 8461 8522 16983 -60 5 Japan 4088 4071 8159 17 6 Singapore 1552 2999 4551 -1447 7 Korea, Republic of 1992 2042 4034 -50 8 Thailand 1100 2773 3872 -1673 9 United Arab Emirates 1015 2131 3145 -1116 10 Malaysia 1303 1837 3140 -533 11 India 1806 858 2664 948 Source : Compiled from Statistics New Zealand Goods and Services Trade by Country, Year end December 2017

Key items – Goods Exports New Zealand’s exports to India have been heavily concentrated in a few product categories. The top 5 goods exported from New Zealand to India in 2017 constituted 76% of New Zealand’s total merchandise exports to India. The top commodity item of exports was Logs and Forestry products ($ 252 million), followed by Confidential items ($ 149 million), Wood Pulp ($ 49 million) Wool (38 million), and Aluminium ($ 36 million) Logs and Forestry Products (HS-44) is currently the largest individually valued commodity exported to India, constituting a share of 5.4% of total Log and Forestry Exports of New Zealand, Confidential items has been the second largest value of exports to India constituting a share of 8.5% of total Confidential Items Exports of New Zealand

Key trends – Goods exports Edible Fruits and Nuts -, New Zealand’s exports of Kiwifruit to India increased by $ 5 million over the 2015-2016, making it one of the drivers of New Zealand’s increased Fruit exports to India in recent years.. The share of India in New Zealand’s total Kiwifruit exports have dropped in 2017 to 0.7% compared to 1.1% a year ago. Dairy produce, that constituted 28% of New Zealand’s total goods exports over this period, had an almost insignificant share of 0.01% in New Zealand’s exports to India, worth only $ 2 million

Key trends . The top 5 goods imported by New Zealand from India as of year-end December 2017 constituted about 37% of New Zealand’s total imports from India. The top commodity item of imports was Pharmaceuticals/Medications ($ 64 million), followed by Precious Metals and Gems ($ 63 million), Textiles ($ 38 million), Machinery Equipment and Parts ($ 30 million) and Motor Vehicles ($ 27 million Pharmaceuticals/Medicines is currently the largest individually valued commodity imported from India, constituted a share of 4.9% of total Pharmaceuticals/Medicines imports of New Zealand Precious Metals and Gems has been the second largest value of imports from India constituting a share of 17.5% of total Imports of this product category into New Zealand, compared to 13.2% a year ago. The value of Imports in this product category have grown continuously since 2015. Textiles has been the third largest valued imported commodity constituting a share of 11.3% of total Textile imports of New Zealand.

Key trends – Services trade bilateral trade in commercial services between New Zealand and India have also been growing rapidly over the years, with exports of commercial services increasing at a much faster pace than its imports. Notably, in a period of 3 years from year-end December 2014 to 2017, Exports of Commercial Services more than doubled from $ 493 million to $ 1.13 billion. Imports of Commercial Services grew much slower during the same period from $ 185 million to $ 260 million.

New Zealand-India Exports of Commercial Services by Industry as at December 2017 compared to 2016 Value of Exports to India (NZ $ million) Share in total Services Exports to India (%) Industry 2016 2017   Transportation services 7 15 0.6 1.3 Charges for the use of intellectual property 1 0.1 Telecommunications, computer, and information services 3 0.3 Other business services 6 4 0.5 0.4 Personal, cultural, and recreational services C NA Government services 16 13 1.4 1.2 Business travel services 11 12 1.0 1.1 Education travel services 859 882 81.4 78.3 Other personal travel services 148 191 13.4 16.9 Source : Statistics New Zealand Note: Data is confidential for some service sectors and therefore recorded as a C for that period. Shares are calculated on the basis of final data available.

Value of Imports from India (NZ $ million) New Zealand-India Imports of Commercial Services by Industry as at December 2017 compared to 2016   Value of Imports from India (NZ $ million) Share in total Services Imports from India (%) Industry 2016 2017 Insurance and pension services 2 1 0.8 0.4 Charges for the use of intellectual property 3 1.2 Telecommunications, computer, and information services 54 43 22.0 16.5 Other business services 32 31 13.0 11.9 Government services 6 2.4 2.3 Business travel services 8 3.3 Education travel services Other personal travel services 136 161 55.3 61.9 Source : Statistics New Zealand Note: Shares are calculated on the basis of final data available.

Looking Ahead Huge untapped potential for expansion in bilateral trade and investment flows between NZ and India Building business relationships to strengthen the economic linkages and diversify the export-import basket is crucial US-China Trade War impact ? Yet uncertain !