Report highlights trade potential with South Asia

Potential for trade between New Zealand and South Asia is "enormous", says a new report from the Asia New Zealand Foundation.

The New Zealand and South Asia Diasporas report points out that as yet, no South Asian country features in the top 25 trading partners of New Zealand. South Asia encompasses India, Nepal, Bhutan, Bangladesh, Sri Lanka, Pakistan and Afghanistan.

Regional key country India was projected to become one of the world's three largest economies by 2050, and a proposed free trade agreement (FTA) with India would stimulate an increasing flow of people, services and commodities between the two, the report says.

FTA negotiations are scheduled to start between the two countries this year, but Trade Minister Tim Groser told TVNZ last month he would "be astonished if it took less than two or three years" to complete a deal.

New Zealand's exports to India were valued at $630 million last year, a 280 percent increase on 2001 exports to India and overall bilateral trade between India and New Zealand grew 180 percent between 2001 and 2009, from $353m to $985m.

The Asia New Zealand Foundation report says while the NZ-India trade was fairly modest, a main characteristic of the relationship was in the long term migration flows to New Zealand.

"This is not to say that the trade component is insignificant, but it does tend to suggest that if this region is one of the fastest-growing economic forces, the potential for future development is enormous," the report said.

"A fundamental aspect of free trade agreements is reciprocity and exchange of both commodities and people."

New Zealand companies have had some success in niche markets such as ice cream and other dairy products as consumer culture took hold in India.

Meanwhile, the filming of Bollywood films in New Zealand and the growing number of Indian students coming to study represent an inbound gain for NZ.

India was the second-ranked source of permanent and long-term arrivals to New Zealand behind the United Kingdom and ahead of China and the Philippines. India was also in the top 10 source countries for visitors to New Zealand and an important destination for New Zealanders travelling overseas.

In 2008, there were 22,000 short term visitors from India and 6000 Indian students enrolled in New Zealand education institutions.

Of the over 120,000 people of South Asian ethnicity living in New Zealand, according to the 2006 Census, over half describe themselves as Indian in ethnicity.

"Increasing flows in both directions greatly increase awareness and contact. It is expected that this trend will develop as trade, multinational business activities and connections between new migrants to New Zealand and their families in the subcontinent develop," the report says.