We are increasingly looking to grow our international relationship with India, as demonstrated by Prime Minister Christopher Luxon’s recent visit. International relations come in many different forms, so in this article we look at how New Zealand’s relationship with India has evolved in terms of merchandise trade, migration, and tourism. We also contrast our relationship with India with that of China, given the similar population and economic rise in importance that both countries have seen on the global stage.

New Zealand’s migration relationship with India has grown dramatically over the past 35 years, with Chart 1 showing that India accounted for 13% of New Zealand’s migrant arrivals in 2024, up massively from just 0.5% in 1989. Migration from India has followed broader trends in New Zealand’s net migration, with India’s share of arrivals surging over 2002-2003, 2015-2016, and 2023-2024 as total migration volumes to New Zealand also surged.

However, New Zealand’s relationship with India in terms of trade and tourism is still in its infancy. Visitors from India have risen from 0.3% of tourist arrivals in 1988 to only 2.5% in 2024. Merchandise trade is practically unchanged, with India taking 0.5% of New Zealand’s goods exports in 1989 and 1.0% in 2024, although there was a peak of 2.1% along the way (in the early 2010s).

Growth in migration from India and China has followed a similar path. Chart 2 shows that Chinese and Indian citizens each accounted for less than 1% of New Zealand’s migrant arrivals in 1989, before rising to account for more than 10% in 2024. In fact, in 2024 India accounted for a larger proportion of migrant arrivals than China.

However, the similarities end there, as New Zealand’s trade and tourism relationship with China has developed much further and been far more successful. China and India accounted for a similar share of New Zealand goods exports in 1989, but China’s share of Kiwi exports rocketed after the 2008 signing of a free trade agreement, just as China’s middle class expanded. China accounted for 26% of our exports in 2024, down from a peak of 29% in 2019, with the Chinese domestic economy struggling to maintain as strong economic growth as previously post-pandemic.

China and India accounted for a similar share of our visitor arrivals in 1989 too, but China’s share rose to a high point of 12% in 2016 and currently sits at 7.5%.

Clearly, replicating the success of the New Zealand-China trade and tourism relationship with India would be ideal. Such a lift in the bilateral trade relationship requires a trade deal to lift trade between New Zealand and India – although a comprehensive deal isn’t necessarily vital (but it is obviously preferred).

But achieving the same trade growth with India as in China will also require India to develop much stronger growth in the middle class. Otherwise, demand for New Zealand exports is unlikely to be as strong in India as in China over time.

World Bank data shows that India has become a much larger country over time, and has now overtaken China in population share. Chart 3 shows that in 1960, China represented 22% of the global population, and India 14%. India’s strong population growth has seen it advance to represent 17.8% of the global population in 2023, compared to China’s 17.5%.

But China’s economic growth story has been much more profound. Chart 4 shows that in 1960, India and China represented a similar share of global GDP – 1.2% and 1.4% respectively. By 2023, China’s GDP had grown to become over 18% of global GDP, compared to India’s much smaller rise to 3.5% of global GDP. GDP per capita in India in 2023 was less than 20% of Chinese GDP per capita.

So, despite a trade deal clearly still being a key idea for New Zealand, the strongest gains from NZ-Indian trade relations are likely to be seen in the future as the Indian economy develops a rising middle class. Until then, trade gains could be reasonable, but limited.

Growth in migration from India, as well as natural increase amongst the established Indian population in New Zealand, has seen the share of the New Zealand population identifying as Indian rising from 2.7% in the 2006 Census to 5.8% in 2023. Chinese people accounted for a greater 3.8% of the population in 2006, but were overtaken by Indian as the largest Asian ethnic group in 2023 (see Chart 5).

The connections formed through migration should set a foundation for growth in tourism and merchandise exports. Tourism from India is likely grow, initially at least, through people visiting friends and relatives who have settled in New Zealand. In 2024, 47% of visitors from India to New Zealand came to visit friends or relatives, compared to 16% of visitors from China.

A growing Indian population will elevate India in our collective consciousness, growing our understanding of the country and its cultures, and potential opportunities for tourism and trade. That said, population growth to date is yet to kick trade relationships between New Zealand and India into gear – which is where the current trade delegation, and the ongoing diplomatic relationships, fit in.

New Zealand’s relationship with China has been hugely beneficial to date, as evidenced by the fact that China has been our largest trading partner since 2013. However, China’s economy is currently struggling to grow at the same rate and is no longer driving our export growth. For example, the United States overtook China as our second-largest tourism market (after Australia) in 2024. China may well recover from its current economic slump, but faces long term population challenges, with the UN projecting that China’s population has already peaked, and will halve over the next 75 years. By contrast, India’s population is still growing and expected to rise to a peak of 1.7 billion in the 2060s.

As we look to the world for migrants, India is increasingly likely to answer the call, with a familiar, large and growing population. With such a warm diplomatic relationship and established population connections, India represents a great opportunity for trade if we can work through areas of competition such as agriculture.