Big win for sheep farmers

Sheep farmers are likely to be the big winners from a proposed free-trade deal with India, which could open a vast untapped market for meat exports and be worth hundreds of millions of dollars a year.

India's huge middle class 250 million people and growing fast has also been identified as an export goldmine for top-end food and manufactured products after the Government agreed to begin negotiating a free-trade agreement with the world's second biggest country.Trade Minister Tim Groser said negotiations were expected to start in July, but advised they could be even more complex than the lengthy talks that led to the trade deal with China.

"It would be very surprising if this was done in under two years ... I hope that that's a little pessimistic, but I think it's better to start with a realistic view this is going to take a long time to negotiate."

The negotiations were agreed between Mr Groser and India commerce minister Kamal Nath during a meeting in New Delhi at the weekend, and follow a study that found a free-trade agreement would benefit both countries.

The agreement comes despite the global economic downturn leading to many countries closing the door to freeing up trade.

Mr Groser was not prepared to put a figure on how much a deal would be worth, but did not reject comparisons with the agreement signed last year with China, expected to be worth $2.9 billion over 20 years.

India was in a similar position to China's 15 years ago when it began a remarkable transformation and was forging ahead despite most economies struggling with recession.

It was reported at the weekend that India's economy was tipped to grow by 6.5 per cent in the six months to March 31.

New Zealand exports about $360 million worth of goods to India, our 24th biggest trading partner, and imports about $284 million in return. Mr Groser said the trade relationship was highly unusual as New Zealand sent hardly any meat, dairy or horticultural products our major exports to the country of 1.1 billion people.

The biggest exports are coke and coal, logs and wool.

Federated Farmers president Don Nicolson said India was a "green fields" market for sheep meat, which faced high tariffs at present. "Sheep meat is widely consumed and unaffected by religious dietary requirements where meat is consumed."

Council of Trade Unions secretary Peter Conway said an FTA with India represented significant opportunities, but there were concerns about the potential for Indian workers to be allowed to come to New Zealand, as Chinese workers were under that deal.

- © Fairfax NZ News