Neeta Bhusan, the Indian representative, was at the Beehive this week. Photo \/ Jamie Ensor<\/p>\n
Bhushan\u2019s comments are significant as there is a debate<\/a> over whether the investment is a hard commitment with ramifications if targets are not achieved, or simply something to aim towards. <\/p>\n Prime Minister Christopher Luxon and Trade Minister Todd McClay have both described it as an ambition or aspirational target and talked down concerns about consequences for New Zealand if that private investment isn\u2019t achieved. <\/p>\n McClay has said it is a commitment to \u201cpromote investment\u201d rather than an explicit promise that the Government would ensure private businesses invest a certain amount of money.<\/p>\n \u201cIf we don\u2019t promote investment, then actually India has the ability to come and talk to us about that and raise some concern,\u201d he said. \u201cBut there is no commitment and dispute settlement against it over the amount that is being invested.\u201d <\/p>\n In a document that summarises details of the FTA, the Ministry of Foreign Affairs and Trade said there is a \u201ccommitment for New Zealand to promote investment into India with the aim of increasing private sector investment by $20b over 15 years\u201d. <\/p>\n However, material from the Indian Government states New Zealand has \u201ccommitted to facilitating US$20b in investment into India over 15 years\u201d and speaks of a \u201crebalancing clause\u201d whereby India could \u201ctake remedial measures should delivery on investment be below commitment levels\u201d. <\/p>\n Piyush Goyal, the Indian Minister of Commerce, has described this clause as a \u201cclawback measure if investment targets are not met\u201d. <\/p>\n Those comments have been seized upon by Peters in his criticism of the deal. <\/p>\n Labour leader Chris Hipkins is also asking questions about it<\/a>. In a letter to the Prime Minister, he said the proposed investment is of an \u201cunprecedented scale\u201d and, if not met, could lead \u201cIndia to unilaterally revoke market access\u201d for some sectors. <\/p>\n The Herald spoke to Bhushan as she was exiting the Beehive this week. She had been making a \u201cfarewell call\u201d, including with Peters, ahead of her tenure ending shortly. <\/p>\n She agreed to talk about the FTA, including the Indian Government\u2019s perspective on what was promised regarding the private investment. <\/p>\n Asked whether the US$20b of investment was a hard commitment by New Zealand or an aspirational goal, Bhushan said it is \u201csomething to aspire towards\u201d. <\/p>\n \u201cIt\u2019s not easy to calculate, to be honest, on a monthly or even a yearly basis, what is the investment going into various parts of India,\u201d the High Commissioner said. <\/p>\n \u201cIt is an aspiration definitely, that hopefully the idea is that more New Zealand companies will look at India as a country which is manufacturing in India, best world-class manufacturing, and Make in India is an excellent programme, and [NZ firms will] also use it as a very efficient part of the supply chain.\u201d <\/p>\n The Herald asked about the potential for consequences, including tariffs, if New Zealand private business couldn\u2019t invest the $20b. <\/p>\n As highlighted by Hipkins, there is some concern that India could restore tariffs to trade with New Zealand if the full investment wasn\u2019t achieved, thereby voiding key benefits of the FTA. <\/p>\n Bhushan said: \u201cAny agreement which comes into force has clauses for review. That is, of course, there, but I don\u2019t see any such problem, frankly. <\/p>\n \u201cI don\u2019t see any such issue. It\u2019s an aspiration. It\u2019s a general aspiration.\u201d <\/p>\n To reiterate the query, the Herald again asked if the investment was not a hard commitment for New Zealand to fulfil or face consequences. <\/p>\n \u201cNo, no, it is not. On the tariff reductions, yes, those are hard commitments. India does this, New Zealand does that. But those are general and indicative, to be honest.\u201d <\/p>\n Bhushan said it was overall a \u201cmutually beneficial agreement\u201d for India and New Zealand. <\/p>\n In terms of investment, she said several New Zealand companies are \u201calready establishing manufacturing units in India or collaborating to manufacture there\u201d. <\/p>\n \u201cI only see this increasing,\u201d Bhushan said. <\/p>\n Peters didn\u2019t resile from his position, pointing to the Indians saying \u201cwe have to facilitate\u201d the investment. <\/p>\n \u201cThat means we have to front up with it. Facilitation means in a legal contract completion of it, helping to complete it. It\u2019s not a \u2018good in principle\u2019 … It\u2019s a hard commitment,\u201d he said. <\/p>\n He said if it was an aspiration, \u201cwhy are they, if it\u2019s not fulfilled over 15 years, able to change the whole contract?\u201d <\/p>\n Peters dismissed Bhushan\u2019s view and returned to what the likes of Goyal had said. <\/p>\n \u201cThey agree with what Winston Peters is saying. So why don\u2019t you? If they\u2019ve got all these conditions to pull out if it is not met, then facilitation means meeting it. It\u2019s not in-principle, it\u2019s not aspirational.\u201d <\/p>\n \u2018Nothing to worry about\u2019 <\/p>\nTrade Minister Todd McClay has maintained the commitment is to “promote” investment. Photo \/ Mark Mitchell<\/p>\n
Winston Peters has pointed to comments by the Indian Commerce Minister as problematic. Photo \/ Mark Mitchell<\/p>\n