Business India ×
  Magazine:
International

Published on: April 22, 2022, 3:15 p.m.
Indo-Australian ties scale new heights
  • Release of the Economic Strategy Update on the report, India Economic Strategy to 2035: Navigating from Potential to Delivery

By Sarosh Bana. Executive Editor, Business India

A series of collaborations has elevated the India-Australia partnership politically, strategically and economically. The two-way relationship gained ground with the signing of the Comprehensive Strategic Partnership agreement by Prime Ministers Narendra Modi and Scott Morrison at their first virtual summit in June 2020, which, as Australia’s Trade, Tourism and Investment minister Dan Tehan notes, “underscores the ambition, trust and energy that characterise our contemporary ties”.

The two leaders held their second online summit on 21 March, and committed to doing so annually, making Australia only one of three countries to have such an arrangement with India.

Their summit was followed by Commerce & Industry minister Piyush Goyal’s official visit to Australia, from 6 to 8 April, where he, along with Tehan, concluded the Economic Cooperation and Trade Agreement, or ECTA, meaning “unity” in Hindi. Among its range of mutual benefits will be the immediate elimination of tariffs on 85 per cent of Australian merchandise exports to India, and 96 per cent the other way.

A grand function was held in Mumbai on 7 April where the Australian High Commission and the Mumbai Consulate General, together with the Confederation of Indian Industry (CII) and Indo-Australian Chamber of Commerce (IACC), presented the “Economic Strategy Update” on the report, India Economic Strategy to 2035: Navigating from Potential to Delivery. This Update was a call to action for government and business on the independent report, which had been authored, on behalf of CII, by Anil Wadhwa, former Secretary (East) in the Ministry of External Affairs. It was submitted to the Australian Government in 2018 as a roadmap to deepen economic integration with India.

“The Update includes a five-year plan for the Australian government to help achieve its long-term economic ambitions with India,” said Wadhwa. “It will help lay the ground for businesses on both sides to realise the potential of our economic partnership.”

CECA by end of 2022

He added that both the countries have formally relaunched negotiations for a Comprehensive Economic Cooperation Agreement (CECA) and were working towards an early agreement to deepen bilateral trade in goods and services, with the aim of concluding a full CECA by the end of 2022. “The CECA should deliver improved goods market access across resources and energy, agriculture, processed food and beverages, and industrial products,” he mentioned. “Australia will also seek improved access for service suppliers, and modern investor protections to increase investor confidence and drive investment, with appropriate safeguards for governments’ rights to regulate.” The agreement would additionally facilitate digital trade by including modern and forward-looking rules that support the use of digital tools to enable trade.

The priority sectors outlined by the two governments are expected to support greater two-way investment flows to grow both economies and help businesses expand. While India’s reform agenda is hoped to improve conditions for Australian investors, Canberra will help realise greater potential in the infrastructure sector. Australia also seeks to position its world-class providers as partners of choice for India’s education, skills and research needs now and into the future. It will also work with industry, and state and territory governments to regain the strong growth from the Indian tourism market, aiming to achieve 1.2 million Indian arrivals by 2035, worth over A$9 billion a year to the Australian economy.

  • The Update includes a five-year plan for the Australian government to help achieve its long-term economic ambitions with India

    Anil Wadhwa, Former Secretary (East), Ministry of External Affairs

Australia also desires to be India’s primary agribusiness partner, a key supplier of agricultural commodities and partner in technical knowledge, pursuing greater market access as a first order priority. With resources remaining central to the economic relationship, the Morrison government will work with industry to maintain its position as a reliable and competitive supplier of minerals and mining equipment, technology and services, simultaneously facilitating partnerships in critical minerals. Energy is another priority sector, considering that India is the world’s fastest growing energy market. Cooperation has been envisaged on cutting edge technologies, especially renewables and hydrogen.

There is also the prospect of deepening cooperation on critical and emerging technologies, for instance, space technologies that will yield commercial and strategic dividends, and defence, where Australian defence firms will be offered niche opportunities in India. The health sector too is highly prospective, with COVID−19 having driven the uptake of digital health services in India, supercharged a focus on manufacturing medical devices and pharmaceuticals, and reinforced India’s importance in global supply chains, including for vaccines. India’s bid to become Asia’s top fintech hub will present further opportunities for Australian business.

Australia and India’s shared passion for sport and their burgeoning ties in the cultural and creative industries will also be leveraged for community and commercial benefits. Across all sectors, the deep bilateral people-to-people links are envisaged to drive economic engagement.

Abizer Merchant, a Monash University alumnus who is now the Mumbai-based Director (India & Sri Lanka) for Sydney’s Macquarie University, says Australia has always been a select destination for Indian students for higher studies. He mentions the IITB-Monash Research Academy, the “exciting partnership” between Indian Institute of Technology Bombay (IITB) and Monash University, Australia’s largest university.

Located at the IITB campus at Powai, this independent, autonomous, not-for-profit joint venture research academy, which was established in 2008, offers an innovative PhD programme where graduate students from India work with both IITB and Monash academics, as well as industry partners. Spending at least one year in Australia, students graduate with a joint PhD degree from IITB and Monash University, ensuring a truly global experience that sets them up for future career success. The Academy has close to 200 PhD students, 400 researchers and 400 research projects to date.

The strength of the bilateral partnership is expected to transcend any change in government in Australia, with Morrison having called for federal elections on 21 May, where his centre-right coalition faces a daunting challenge from the opposition Labour Party, led by Anthony Albanese. Morrison is nevertheless the most successful Australian prime minister in years, being the first to survive in office from one election to the next since 2007. And his party had won the last election in 2018, despite most polls predicting otherwise.

  • Australia’s High Commissioner to India, Barry O’Farrell

    Australia’s High Commissioner to India, Barry O’Farrell

 ‘A watershed for partnership’ 

The new commitments and practical initiatives announced by both our governments to grow our economic, trade and investment ties are a veritable watershed for our deepening partnership.

While Prime Ministers Scott Morrison and Narendra Modi have reaffirmed their commitment to drive our Comprehensive Strategic Partnership to new heights, the Economic Strategy Update on the report, India Economic Strategy to 2035: Navigating from Potential to Delivery, draws on consultations with over 600 business and community stakeholders across Australia and India to set a basis for new investment.

To implement the plan, Australia is investing over $280 million, that is, Rs1,500 crore, towards new programmes and initiatives across technology, space, critical minerals, strategic research and people-to-people links to boost cooperation with India. This is the largest ever single boost to bilateral ties by an Australian government.

The Update also recognises the evolving challenges and opportunities for both countries, taking into account the transformed global environment, including the lessons learned during Covid-19, India’s economic reform agenda and our joint progress under our Comprehensive Strategic Partnership.

India and Australia have complementary economies, and our partnership is vital as we both strive for stronger, sustainable economic growth, and more secure and diversified trade and supply chains. As democracies, we know a strong economy underpins our future and the living standards and opportunities available to our citizens.

The Update lays out a practical plan for future economic integration between Australia and India and also acts as a marker of our recent progress, apart from reaffirming support for Australia’s traditional strengths in education, resources, agribusiness, tourism and information technology that will remain central to our economic ties with India. Additionally, it gives an impetus to investment and cooperation in emerging and strategic sectors, such as low emission technologies, cyber and critical technologies, innovation and space.

The new initiatives contained within the Update cover the breadth of our shared priorities, namely, expansion of our diplomatic presence across India, establishment of a joint Centre of Excellence for Critical and Emerging Technology Policy, commitment by Australia to build out cooperation in space, investment boost for the Australia-India Strategic Research Fund, support for increased research, production and commercialisation of renewable energy technologies, and front-row access for Indian investment in Australian lithium and cobalt.

The Australian government will besides be investing in a new Centre for Australia-India Relations to propel and strengthen our community, institutional and business ties. The Centre will administer a suite of scholarships and fellowships, which are designed to be as generous and high-profile as the Rhodes or Fulbright programmes, but offered exclusively to Indian citizens by the Australian government.

Maharashtra and Mumbai will, of course, be central to the success of this action plan. The state has consistently made up the lion’s share of India’s total FDI inflows, and in 2020-21 ranked second among all Indian states in attracting investment. It has world class education and research institutions in Pune, a vibrant arts scene, as well as infrastructure being developed at a rapid pace across Mumbai.

Despite all the progress in our economic relationship, we are clearly not resting on our laurels. The fundamentals are solid, and adapting them remains a work in progress. While we continue to make inroads, there remains an ocean of opportunity yet to be explored and developed.

Australia knows that in India we have a trusted, natural partner. Our diplomatic and trade network across the country, propelled by the Update, will continue working to ensure that India too, sees a similar friend in Australia.

Cover Feature

Business Schools: Back in action

How future managers will handle challenges

Corporate Report

India Cement’s journey continues

At 75, India Cements is a heady cocktail of a story

Focus

How to energise the mining sector

The mining industry emphasises on the optimal use of mineral reserves

Special Report

India's G20 presidency: Luckier than Indonesia?

As India assumes G20 presidency, it will have to go by consensus to keep China on board

E-MAGAZINE
B-schools: Back in Action
COP27-Success or Failure?
The consumption rebound
FROM THIS ISSUE

Corporate Report

Guest Column

Guest Column

Guest Column

Guest Column

Guest Column

Company Feature

Classrooms go live, thanks to Airtel

Published on April 5, 2022, 11:25 a.m.

Despite the pandemic, Bharti Foundation has ensured that children are not deprived of learning opportunities

Column

Collaborative excellence

Published on April 4, 2022, 8:53 p.m.

A policy perspective for meeting SDG-9 in low resource setting of developing economies

Column

Innovation and infrastructure

Published on April 4, 2022, 8:10 p.m.

India is well-positioned to become a model of corporate sustainability

Column

‘More for less’

Published on April 1, 2022, 10:12 p.m.

The merger of technology and SDGs – A game-changing win of the era

E-vehicles

Ola opens 14 experience centres

Published on Dec. 1, 2022, 8:54 p.m.

Ola has set a target of opening 200 outlets by the end of 2022

Mobility

Kerala to get e-double-deckers

Published on Dec. 1, 2022, 8:40 p.m.

Kerala goes for environment-friendly rides

Renewable Energy

Google, Microsoft go the RE way

Published on Dec. 1, 2022, 8:19 p.m.

Google, Microsoft to reduce carbon footprint

Global warming

Microbes and climate change

Published on Dec. 1, 2022, 7:55 p.m.

Microbes can ‘switch on’ to cope with climate change