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NUMBERSPEAK: Trade Update

New Zealand’s bilateral trade with India : How did it fare during the COVID-19 pandemic and global recession? Despite the decline in bilateral trade between India and New Zealand, Dr. Rahul Sen, Senior Lecturer, School of Economics, Faculty of Business, Economics and Law at Auckland University of Technology writes about the significant scope for expansion and diversification for businesses involved in New Zealand-India bilateral trade in goods.

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ew Zealand’s trade relationship with India has been strong and growing, but has declined during the pandemic and the onset of the global recession, accompanied by a sharp decline in import demand in India, as well as border restrictions on travel and related business services. As of the September 2020 quarter, India was the 9th largest export destination and 12th largest import source for New Zealand’s total exports and imports of goods and services respectively. India was the 5th largest destination for New Zealand’s commercial services exports after Australia, US, China and the EU-28, and the 7th largest import source for its commercial services imports. As at year-end September 2020, India was New Zealand’s 11th largest trading partner based on total trade in goods and services, with a two-way total trade valued at $ 2.4 billion, out of which exports were worth $ 1.4 billion.

This was about $ 0.2 billion lower compared to a year ago. Figure 1 showing the trend of bilateral trade flows since 2015 suggests that the decline in bilateral trade between New Zealand and India over 2019-2020 due to the onset of the global pandemic, was largely led by that of goods exports (which declined by $ 181 million), followed by goods imports (a decline of $ 56 million), with services exports also falling by $ 35 million year on year. Bilateral services imports however, increased by about $ 68 million during the same period.

Exports

New Zealand’s exports to India have been heavily concentrated in a few product categories. The top 10 goods exported from New Zealand to India as of Year end September 2020 constituted 86.4% of New Zealand’s total exports to India. The top commodity item of exports

was Wood consisting of Logs and Forestry products ($ 117 million), followed by Wood Pulp ($ 58 million), Edible Fruit and Nuts ($ 56 million), Confidential items ($ 50 million), and Wool ($ 39 million). In terms of change in value of exports to India as of year end September 2019, the largest increases were noted in Optical, medical and measuring equipment (up by $ 22 million from a year ago), mainly due to the spike in demand following the onset of the pandemic, and followed by Fruit and Nuts (up by $ 9 million) and Wool and Dairy (both up by $ 7 million).

Imports

New Zealand’s imports from India have not been highly concentrated in a few product categories compared to its exports in the past, and a similar trend continues to persist. The value of imports in terms of c.i.f. (costs, insurance, freight) has decreased by $ 56 million as at year end September 2020, compared to a year ago. The top 10 goods imported by New Zealand from India during this period constituted about 52% of New Zealand’s total imports from India. The top commodity item of imports was Pharmaceuticals/ Medications ($ 82 million), followed by Precious Metals and Gems ($ 47 million), Textiles ($ 47 million), and Machinery Equipment and Parts ($ 45 million) . In terms of change in value of imports from India, the largest increases were noted in Pharmaceuticals (up by $ 9 million from a year ago); followed by

12 | KiaOra India | Mar 2021INZBC.ORG

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KIA ORA INDIA | VOL 3 ISSUE 01 | MAR 2021  

KiaOra India is a quarterly trade magazine, published by the India New Zealand Business Council. This magazine is published every quarter an...

KIA ORA INDIA | VOL 3 ISSUE 01 | MAR 2021  

KiaOra India is a quarterly trade magazine, published by the India New Zealand Business Council. This magazine is published every quarter an...

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