NZ’s Support For India During Global Security Crisis Key To Securing FTA - Expert

New Zealand’s support for India during its current global security crisis could be key to securing a Free Trade Agreement with the nation, according to the head of one of the country’s largest independent accounting firms.

In addition to a new trade deal signed with the Gulf Cooperation Council (GCC) - which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE), New Zealand currently has free trade agreements (FTAs) covering over 70 countries.

These agreements support trade and economic partnerships across various regions, offering market access and reduced tariffs for New Zealand’s goods and services however, a FTA with India, the world’s fifth-largest economy, has eluded New Zealand since it was first mooted in 2007.

Jay Changlani, a chartered accountant and CEO of Orb360, says in his view our support in addressing areas such as India’s international security concerns and providing work opportunities for their population can be leveraged to help gain access for many of our other products.

He says the focus on including agricultural exports such as dairy has been counterproductive in our efforts to secure an FTA with India.

“India is the world’s largest milk producer - they do not need or want New Zealand’s dairy products any more than we need theirs.

“We need to accept this reality and move beyond a transactional trade agreement by taking dairy off the negotiating table to focus on how we can provide solutions to systemic problems faced by this nation.

“Right now, India is currently grappling with the Khalistan movement, a separatist group seeking to create a separate homeland for Sikhs by establishing an ethno-religious sovereign state called Khalistan.

“We know that India prefers partnerships that reflect broader bilateral cooperation rather than purely economic deals. Their trade agreement with Australia was an outcome of their geo-political support and investment in supporting India’s transition to clean energy technologies.

“The first thing NZ can do is to follow the lead of Australia and publicly back India in all security alliance matters between Canada, the U.S., the U.K., Japan and Australia,” he says.

Changlani says we also need to look at ways to utilise India’s workforce to improve the productivity of both nations.

He says his accounting practice has developed a model for services firms that allows New Zealand based professionals to segment their roles and delegate administrative and process-driven tasks to counterparts in India.

Changlani says they have acquired six accounting practices over the past six years with each firm adopting the trans-national service model to improve efficiency and support their expansion programme.

“There are around 20 million unemployed people in India's labour force of 580 million. Their unemployment rate has averaged 8% over the past six years.

“With labour utilisation a key issue for India, there is a significant opportunity to look at how we can create mutually beneficial growth opportunities for both nations.

“There is a significant pool of skilled labour in India operating in a complementary timezone to ours and many Kiwi organisations have looked at outsourcing work to India but encountered barriers to implementation.

“Ensuring output consistency has been an ongoing challenge for many businesses looking to outsource their work to this nation. Often quality drops if the work is not well defined or the staff member assigned changes frequently.

“We have created a model for professional services firms where each of our New Zealand based accountants is paired with a counterpart in India that takes over from them at night to complete the work.

“This system allows our businesses to spread fixed costs across a larger client base and enable faster turnaround times which has increased our efficiency by up to 20%. We believe this approach could be adopted by other NZ professional services providers - particularly within a market where many accounting firms are at capacity and turning away new clients.

“This model has seen our firm grow to 20 staff in New Zealand and 10-15 staff in India, serving approximately 2,000 clients. It has put us on track to be one of the top 10 accounting firms in New Zealand within five years and creates the capacity necessary to expand into markets like Australia,” he says.

Changlani, who is also an international tax specialist, says NZ’s non-resident withholding taxes under the double tax agreements between India and New Zealand are high by global standards and a review is needed to help us recruit talent and to bring fairness into our tax system.

He says New Zealand needs more IT specialists in fields such as blockchain and QR code payments and needs to do more to attract expertise from these sectors or risk falling further behind its international competitors.

“To attract skilled talent for New Zealand's critical shortages, we must address our high non-resident withholding tax rate on royalties and dividends which are around 15%, especially when competing with countries like Singapore, where the rate is just 5%.

“This tax structure can deter high-value talent from choosing New Zealand over more tax-friendly destinations. Reducing these barriers should be a priority in any broader strategy to strengthen our economic ties with India as a key talent market,” he says.

Changlani says once we have established a foundation for a viable relationship with India, we can then look at trade opportunities.

He says the development of clear agreements regarding intellectual property rights and profit-sharing will be necessary however New Zealand could contribute to the growth of a more sustainable and resilient global food system in India.

“While there is little demand for dairy products as such, New Zealand excels in agrotechnology and with India facing increasing pressure on its natural resources due to population growth and climate change, there is scope to offer high-value agrotechnology scientific expertise in areas such as organic farming and low-emission agriculture.

“There is also significant scope for leveraging India’s scale to develop joint ventures in emerging technologies such as the space sector,” he says.

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