Australia scripts a fresh template for navigating the India economic challengehttps://indianexpress.com/article/business/economy/australia-scripts-a-fresh-template-for-navigating-the-india-economic-challenge-5474534/

Australia scripts a fresh template for navigating the India economic challenge

Around 19,000 Australian companies currently export to New Zealand as against just about 2,000 that export to India.

Australia scripts a fresh template for navigating the India economic challenge
Avocado processing plant in Manjimup, outskirts of Perth, Australia. Agri business in a key focus area. (Express photo by Anil Sasi)

Back in 1893, Australia’s second Prime Minister and the leader of the Australian Federation Movement, Alfred Deakin documented, with some degree of dismay, his country’s fledgling trade with India and flagged the potential for exports for its dairy, fruit and vegetables. Well over a century after Deakin recorded this in one of the two authoritative treatises he wrote on India, both nations are still struggling to kindle a relationship that is largely underdone, with the words “natural partners” and “potential” continuing to the most used expressions by those attempting to chronicle the bilateral engagements story so far, with limited progress on the ground beyond that.

Sample this: Australia’s two-way trade with India is at about the same level as it is with New Zealand, a country of about 4.5 million people – or about a quarter of Delhi’s population. Around 19,000 Australian companies currently export to New Zealand as against just about 2,000 that export to India. As Australia’s shadow trade minister and member of the Australian Labor Party Jason Clare succinctly pointed out at a business summit in Sydney earlier this month, Australia’s exports to China in the last ten years have more than quadrupled in value even as its exports to India have dropped by about a quarter in value terms. Today, China is Australia’s biggest trading partner in terms of both imports and exports while Australia is China’s sixth largest trading partner, its fifth biggest supplier of imports and its tenth biggest customer for exports. The foundation for this relationship is said to be a report — Australian and the North East Asia Ascendency — prepared by economist Ross Garnaut for the Bob Hawke Labour Party government almost 30 years ago, which catalysed the opening up of Australia’s economy, scaling down of its tariff barriers and a calibrated ramping up of trade with East Asia.

Staccato bursts of activity notwithstanding, the Australia-India engagement has struggled to take off despite concerted efforts by each of the administrations in Canberra that followed the government of former Prime Minister Kevin Rudd, the Mandarin-speaking former diplomat and self-avowed Sinophile. A fresh reboot, Canberra feels, is on the cards, with its foundation being a long-term strategy penned by former diplomat, Peter Varghese, for Australia to build and develop its economic ties with India between now and 2035. The voluminous report packs in ambitious targets, including making India Australia’s third largest trading partner, and is full of tangible ideas, such as setting up a ‘Study in Australia’ education hub in New Delhi, exploring options for a consortium of Australian universities to be the lead partner in the establishment of one of the six new Indian Institutes of Technology, promoting more direct air services between Australia and India and establishing a Strategic Economic Dialogue. At the political level in Canberra, there appears to be bipartisan support for this, with the opposition Labour party committing to support its top recommendations even as Australia’s current Prime Minister Scott Morrison used a meeting with visiting President Ram Nath Kovind late last month to endorse the Varghese blueprint. But it’s still a divided house on whether the Varghese report could have a transformative impact on the India relationship on the lines of what the Garnaut report did to the Australia-China engagement, especially given the fresh turbulence in the relationship as both countries head into general elections. Australia has already escalated a discord with New Delhi over sugar subsidies by formally referring the issue to the World Trade Organisation even as the negotiations between the two sides on the proposed Comprehensive Economic Cooperation Agreement have clearly gone off-track. Meanwhile, a proposal to ship uranium to India, widely construed by New Delhi as a confidence building measure, continues to hang fire, well over a year after Australia sent its first shipment to India — “a small sample of uranium” transferred “purely for testing purposes” in April 2017. Australia’s trade and investment minister Simon Birmingham, in a recent interaction with Indian journalists, asserted that Australia and India are making “real progress” on the issue.

There are no major flag bearers for corporate India in Australia — something that is seen as a constraint. The Adani group’s $12 billion Carmichael project coal site in Queensland state is perhaps the most visible Indian investment in Australia, which has been delayed for six years because of a series of legal challenges and reports evaluating its environmental impact, alongside issues faced by Adani in tying up funds. Supporters of the project such as Australia India Business Council’s Jim Varghese and Northern Australia Minister Matthew Canavan maintain that the project has been a victim of ill-informed protest activity and an indecisive state Labor government. Opponents such as the Australian Conservation Foundation claim the mine still faced a number of hurdles and was being investigated by the Queensland government for breaches relating to illegal bore holes.

Among the positives on the trade front, rising thermal and coking coal imports by India mean gains for miners such as Australia’s Whitehaven Coal and Rio Tinto. The biggest positive, though, is the story of the Indian diaspora in Australia. While trade has been stagnant, the Indian diaspora in Australia has boomed, with the number of Indian Australians tripling over the last 10 years. One in every 50 Australians is now born in India. According to the University of Melbourne’s Lesleyanne Hawthorne, in the past decade, Indian migrants have emerged as Australia’s primary skilled migration resource. From 2008-09 to 2016-17 114,640 primary applicants (PAs) secured new grants in the permanent skilled migration program, far higher than Australia’s other top source countries that include the UK, China, the Philippines, Ireland and Malaysia. As established by Australian national census data, new Indian migrants have also been disproportionately young, male, clustered in westerns states of Victoria and New South Wales, and tertiary-qualified (with a remarkable 80 per cent holding post-school qualifications compared to 56 per cent of Australia’s overall population). Provinces such as Western Australia — the country’s biggest state — are now vying aggressively to explore business opportunities involving Indians, with aggressive efforts to establish new connectivity from India to Perth. Rebecca Brown, Director-General in the Department of Jobs, Tourism, Science and Innovation, Western Australia, told visiting Indian journalists that there exists opportunities for Indian companies to tap into the state’s mineral resources. Andrew Oldfield, Andrew Oldfield, Director (Partnership) at Tourism Western Australia, indicated that Air India is exploring business viability of a direct flight to Perth and a special programme has been launched to train over 3,700 travel agents in India.