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Economics/India's Bilateral relations with New Zealand.


Dear Prof Raza

How are India's Bilateral relations with New Zealand country in terms of Import/Export Business?


Dear Prashant,

Thank you for posing an important question on trade relations.

This question has diverse facets of explanations and arguments, and it is very wide in scope. However, from the perspective of ordinary research, I may guide you through the following salient features which, I believe, will put you on to a wider horizon to shape your thoughts and ideas in view of the required formulation of the thesis of your arguments.

India and New Zealand, besides having cordial and friendly overall sociopolitical relations rooted in historical connection with the British empire through linkages of Commonwealth, parliamentary democracy and the English language, maintain mutually advantageous trade relations in a globalized context.

The priority relationship with India is of necessity a boon for the New Zealand Government. This relationship stems from the following reasons:

First, India is one of the largest and fastest growing economies in the world. It represents huge opportunities for trade. Labor cost is one of the lowest in the world which allows for comparative advantage in labor-intensive products, such as garments, handicrafts, etc.

Second, a large number of Indians, roughly 155, 000, have made New Zealand their permanent home which fosters people-to-people contact and bolsters New Zealand’s trade pacts. Both these countries were once part of the British Empire. This is further strengthened by tourism and sporting links.

Third, they set up a Joint Trade Committee in 1983 and have had fruitful discussions on a free trade agreement either bilaterally or through the East Asian Summit, though stymied by disagreements over agricultural subsidies which, with the success in educational cooperation and better understanding, is expected to be overcome.

Fourth, although India-New Zealand relation was not extensive even though cordial after her independence in the middle of the twentieth century, New Zealand has recently established extensive ties with India because of its impressive GDP growth.

You may as well cull some more data for your research from the following:
The NZ-India FTA is a crucial step toward achieving that goal --the NZ Inc India Strategy, a plan for India to become a core trade, economic and political partner for New Zealand.
•   better access for New Zealand businesses to India’s vast market for consumer products and services, particularly the growing middle class
•   more opportunities to export raw materials and intermediate products needed by Indian manufacturers
•   lower tariffs for our exporters. India’s average most-favoured-nation tariff is 12.9%, and their average tariff on agricultural goods is 34.4%. Negotiators will target these high tariffs, so New Zealand exports can be competitive in Indian markets
•   reduced tariffs on Indian imports – particularly in textiles, clothing, footwear, and industrial manufactured goods – which would benefit both New Zealand consumers and Indian businesses
•   better ways for dealing with sanitary and phytosanitary measures, technical barriers to trade, customs procedures, and rules of origin. This will lead to a wider range of goods being exported to India
•   more opportunities for New Zealand’s service sector, including tourism, education, consultancy and professional services, environmental, engineering, construction, agriculture and forestry services.
•   more certainty for investors, and potential for more investment between the countries.

The India-New Zealand trade relation is expected to become stronger and stronger over time in a globalized context. This will not only contribute to improvement in overall international trade --since inter-industry and input-output matrices involve not only NZ and India but many other countries within the "global village"--but will add to poverty alleviation and women empowerment which will redound to stamping out the divide between the wealthy West and the poor East. That, through a multiplier effect, will be all to the good for the world economy. In that sense, the NZ-India trade relation is expected to play a leading role in world economy.

I hope this serves the purpose. Feel free to write back to me for any clarification, and I shall try to attend to your further queries if I can. Best of luck in your research endeavors.


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Eklimur Raza


It appears some students in this website are confused about elasticity of demand and the slope of the demand curve when they are trying to figure out why rectangular hyperbola comes up in case of unitary demand curve. First, they don't know that RH can be depicted in a positive quadrant of price,quantity plane. Secondly, they make the mistake that the slope of RH is constant at -1. Two points could help them: first, e=1 at each and every point of the RH, because the tangent at any point shows lower segment=upper segment (another geometric definition of e); yet slopes at different points,dQ/dP, are different; second, e is not slope but [(Slope)(P/Q)]in absolute terms. Caveat: only if we measure (log P) along the horizontal axis and (log Q) up the vertical axis, can we then say slope equals elasticity --in which case RH on P,Q plane is transformed into a straight-line demand curve [with slope= -tan 45 deg] on (log Q),(logP) plane, and e= -d(log Q)/d(log P). [By the way, logs are not used in college textbooks --although that is helpful in econometric estimation of elasticity viewed as an exponent of P, when demand equation is transformed into log-linear form.] I have not found the geometrical explanation I have given in any textbook followed in undergraduate and college classes in Canada (including the book followed in a university where I taught for a short time and in the book followed in George Brown College, Toronto, where I teach.


About 11 years' teaching economics and business studies, and also English, history and elementary French.Practical experience in a development bank, working with international donor agencies like the World Bank and the ADB. Experience in free-lance journalism, including Canada's "National Post."

I teach micro- and macroeconomics at George Brown College (continuing education), Toronto, ON, Canada.

Many articles and editorials, on different subjects, in English newspapers. Recently an applied Major Research Paper, based on a synthesis of the Solow growth model and the Lewis two-sector model, has be accepted by Ryerson University, Toronto. Professors Thomas Barbiero and Eric Cam, Ryerson University, accepted the paper.

Master degree in Interantional Economics and Finance and diploma with honours in Business Administration from Canada.

Awards and Honors
Received First Prize in an inter-university Literary Contest.

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