Explained : Fact or fiction: Who’s telling the truth on the India Free Trade Agreement? and Its Impact

That same policy will apply to the 1667 granted a TEE under the FTA. Other criteria will have to be met under the FTA, as is already the case for green list work visas.

They will all have to have the relevant qualification, proficiency in English, a job offer from an accredited employer, good health, good conduct and evidence of financial support / pay.

Like the current green-list visa holders, they will be able to apply for visas for a spouse or dependent child. There will be no automatic work rights or study rights for spouses and children. They will need approval.

So what will be the difference for an Indian green-list worker now and under the FTA visa?

It will be stricter.

Under current settings, if a skilled foreign worker has the support of their employer, their visa can be extended, and they can begin a path to citizenship.

The skilled workers who come in under the India FTA will have to return home after three years and will have a stand-down period of another three years before they can apply again.

Won’t that be a disincentive for people to apply under the TEE rather than the ordinary green list? Why would India sign up for that?

Precisely because it ensures that the 5000 TEE visa holders return home. It encourages Indian nationals to get experience abroad and then to put it to use in India.

Because of the requirement to return, it may mean that fewer of the TEE visas are taken up by people with spouses and children, and it may be considered more suited to singles.

Has Trade Minister Todd McClay been clear on the 5000 TEE visas?

He could have been clearer.

He has said the FTA does not create the right to bring family members, which might make it sound as though visa-holders cannot bring family members. They can – but under existing policy. It’s not a new right under the FTA.

Will the 5000 TEEs under the India FTA be additional to current numbers?

No, because the numbers who come in under the green list are determined by skills shortages, not by setting a target figure.

The number of people here on accredited employer work visas is currently about 83,000 a year so 5000 TEE visas being held at any one time would be about 6% of that overall number.

There will probably be an increase in people from India filling skills shortages because of the high profile the deal will be given in India, but they would be displacing qualifying applicants from other countries, rather than increasing the total.

What sorts of jobs will qualify for the India temporary employment entry visa?

Of the 1667 TEE visas, 1467 will be from 13 skilled occupations drawn from the green list for which New Zealand has skills shortages, such as software engineers, civil, mechanical, structural and environmental engineers, ICT project managers and registered nurses. Another 200 a year will be for iconic cultural occupations such as yoga instructors, music teachers, Indian chefs and ayurvedic practitioners.

Is this unique to India?

No. Similar provisions exist in other New Zealand agreements, such as those with South Korea and Asean countries, including the Philippines and Vietnam.

The China free trade agreement signed in 2008 specified 20 occupations in skills shortage areas, for which temporary visas could be issued – to a maximum of 1800.

India has the highest number, however: 5000 TEEs at any one time.

Did the recently concluded India-EU deal or India-UK, deal have similar provisions?

No, but the EU doesn’t negotiate immigration policy at all. That’s left to individual countries to do.

Comparisons with the UK are meaningless because it has a long-standing immigration arrangement with India because of its historic relationship.

The New Zealand deal offers a working holiday scheme to India of 1000 visas a year, similar to the number Australia offers. It allows six months of work within a year-long period for a mix of holiday, study or work.

Students

Winston Peters says the number of Indian students allowed into New Zealand is uncapped and, coupled with the right to work, they could take jobs from Kiwis. Is that right?

Yes, but it’s not the full story.

There is currently no cap on the number of international students from any country and it has been that way for many years.

From this year, all international students with study visas have the right to work for 25 hours a week, including Indian students. Before this year, it had been 20 hours for many years.

The new FTA will give Indian students the right to work for 20 hours a week. That will advantage Indian students only if the current 25 hours drops to say, 15 hours a week as a policy. Their work entitlement would remain protected at 20 hours a week.

Could the FTA prevent future New Zealand governments from placing a cap on the number of students coming from India?

This issue has been raised this week by Labour leader Chris Hipkins.

There is currently no cap on students coming from any country and there has never been a suggestion that any New Zealand Government would put a cap on a single country.

India would not be immune to any future policy move by a Government to restrict the numbers of international students on a policy that applied to all countries – such as raising entry criteria for courses.

Putting a cap on India only would be blatant discrimination and is not contemplated. However, the work rights of students from India is protected and unique under the FTA. See above.

The Indian Government has hailed aspects of the post-study work rights as unique. Is that true?

Yes and no. What is new and unique to nationals from India is that if they have gained a PhD at a New Zealand University, they can apply for a work visa for four years instead of the current three years.

For a bachelor’s degree, an Indian student can apply for a two-year post-study work visa, and three years for a degree in a STEM subject, or masters and honours.

What remains the same is that other international students who study here under student visas can apply for post-study work visas up to three years, depending on the type of course.

Investment

What has the Government committed itself to in terms of an investment target?

One of the more contentious elements of the free trade agreement is the investment commitment, on which India places a great deal of emphasis.

The New Zealand Government has committed to promoting investment into India of $US20 billion over 15 years. India has the right to take remedial measures if the terms have not been met. We won’t know exactly what those measures could be until the text is published.

It is similar – but importantly different – from an investment clause in a deal India signed with the four countries of the European Free Trade Area, Switzerland, Norway, Iceland and Liechtenstein (EFTA). That deal committed them to $US100 billion investment over 15 years. If the four fail to reach this target, India can make changes to the FTA.

How does India see it?

New Zealand’s commitment is to promoting investment – not to a target. India can apply remedial measures if it is not satisfied but there are many consultative steps to go through before it takes remedial measures.

But because there is no dispute process, it leaves New Zealand potentially at the mercy of unfair decisions by India in 15 years’ time.

Ultimately, any clawback would be a political decision. India’s Commerce Minister Piyush Goyal put emphasis on the potential for clawbacks in his press conference in December. He also described it as a “comprehensive” deal, which is plainly is not because it excludes New Zealand’s biggest export – dairy.

He also stressed that New Zealand had opened up 180 sub-sectors, but those are the same trading sectors under the EU, UK, CPTPP and China FTAs.

Governments rarely place the same emphasis on what matters to them as the other partner.

What elements have been highlighted by New Zealand?

Preferential access for 95% of New Zealand’s current exports to India, although two-way trade at present is a piffling $3.68 billion annually.

Tariff reductions will address the advantages Australia has had since it signed a deal with India three years ago – for example Australian exports of seafood to India increased by 55% and New Zealand’s declined by 67% while Australian wood products went up by 120% and New Zealand’s went down 20%.

There will be big tariff reductions on sheep meat and wine, and liberalisation of trade in services, 45 of which will improve again under Most Favoured Nation (MFN) treatment if other countries get better deals. Wine too, has MFN treatment.

It is also highlighting the deal for exports on apples, kiwifruit and honey and technical co-operation plans in those industries with India.

It has secured an agreement by India to negotiate with New Zealand in the event that it ever opens its dairy industry to another country. But Goyal said that India was never going to open up dairy, “so that concern really doesn’t matter.”

It emphasises the potential for growth with estimates that India’s 400 million-strong middle class will increase to 700 million within five years and that it is on track to become the world’s third-largest economy.

What happens next?

There is some urgency to get it signed and sealed and have it enter into force before the EU deal, otherwise New Zealand will miss out on any MFN provisions triggered by the EU, such as on wine.

The text is currently withheld at India’s request. Because it is doing so many deals, presumably it wants to limit the knowledge in current negotiations as to what others got.

Labour is expected to support the deal – renegotiating is not an option – but will make the Government sweat over it, having been brought in only at a late stage when New Zealand First’s objections were formalised.

Indian Prime Minister Narendra Modi is tipped to visit New Zealand mid-year to sign the deal with Prime Minister Christopher Luxon.

Luxon stands accused of reducing New Zealand’s leverage at the last election by promising to have a deal done this term. Poker players tend not to show their cards to their opponents before the first round.

Nonetheless, it will be a promise kept.