Key gets welcome with all the trimmings

Prime Minister John Key has received a formal welcome to India with all the trimmings at a presidential palace ceremony.

The formal welcome was initially intended to take place outside Hyderabad House but concerns monsoon rains might bucket down upon the party forced a change of plans, and the event was moved inside.

Mr Key and his wife, Bronagh, were welcomed by Indian Prime Minister Manmohan Singh and his wife Gursharan Kaur, then stood in a grand, high-ceiling hall in silence as the New Zealand national anthem was played by a brass band.

Mr Key is due to meet Mr Singh for formal talks later today.

Trade is expected to be at the centre of the discussions, with officials hoping to progress negotiations for a free trade agreement (FTA) that has a potential deadline of March.

"If you’re going to sign an FTA you have to have political will at the top," Mr Key told reporters this morning.

He said he believed the will did exist on both sides, under the right conditions.

Mr Key accepted there were some concerns about the effect an FTA might have, and was asked specifically about low labour rates in India that could cost New Zealand jobs.

"In terms of low labour rates there’s nothing new in India that we don’t already face in China, so that’s not a unique position," Mr Key said.

"Actually New Zealand already has very open borders in terms of Indian goods coming into New Zealand, so from our view, we would take the perspective that there’s more upside for New Zealand. They're areas we are not likely to be competing in anyway.

"This is a vast market that presents a lot of opportunities on the balance of benefits we think it would be worthwhile."

With regard to the two countries conflicting nuclear policies, Mr Key said the issue would be raised.

"The main point there is to say that New Zealand’s position is extremely well understood," he said.

"We acknowledge the engagement and dialogue that India has been engaging in by attending a nuclear security summit in Washington last year and, presumably, in Korea next year, and I think, over time, progress is being made."