A shift in the global economy, politics and governance has brought major disruption to the world. Hence, there is a growing demand from nations to address the changing power dynamics driven by restructured norms, rules, institutions and strategic collaborations. The impending visit of Australian Prime Minister Scott Morrison to India in January 2020 is driven by this hope and optimism to address the dynamics, which are at play in reforming such structures that asks for geopolitical and economic repositioning. Can Australia and India find the obvious synergies that exist between them and more importantly make them work?
PM Morrison will visit India in January 2020 and will deliver the inaugural address at the Raisina Dialogue (a dialogue on foreign policy and strategic affairs). He will also be accompanied by a business delegation involving senior executives from sectors that are of significance between Australia and India. Australia’s release of the India Economic Strategy 2035 (IES) report last year, authored by Peter Varghese AO, Former Secretary of the Department of Foreign Affairs and Trade and Former High Commissioner of Australia to India, has set a target for India to become one of Australia’s top three export markets, to make India the third-largest destination in Asia for Australian outward investment. This would also help bring India into the inner circle of Australia’s strategic partnerships. India’s reciprocal Australia Economic Strategy (AES) authored by Former Secretary (East), Government of India and retired ambassador Anil Wadhwa will be officially released in December-January 2020, and will cover the opportunities across emerging areas such as mining, resources, education, medical and water technologies, space technology and manufacturing which have major relevance in the future aspirational plans of Indian companies and investments.
The future of India – Australia ties can be seen via an eight-point vision, marking the important sectors, opportunities and concerns between the two states to take the relationship to the next step.
Firstly, this type of a blueprint to enhance trade opportunities between India and another country has never been attempted before. The release of the India Economic Strategy 2035 (IES) last year and Australia Economic strategy (AES) is a way forward towards building a strong knowledge resource, that could enhance our understanding of each other across different sectors, help businesses strategies, explore and expand in the Indian or Australian market with ease.
Second, Australia is a natural partner in every area of India’s priority: energy and resources, agribusiness, education and skills, infrastructure, finance and health. Just as India has core strengths for Australia: IT, manufacturing, engineering, textiles, agriculture and finance. However, there are many new emerging areas of cooperation that can be explored between both nations. For example, India has been a partner of Australia’s national resources in coal, gold, copper etc., however with the international exploration programme (under Khanij Bidesh India Ltd.) the objective is to ensure a consistent supply of critical and strategic minerals like lithium, nickel, cobalt etc. to the Indian domestic market. The growing significance of these minerals is demonstrated in their use in the manufacture of mobile phones and computers, flat-screen monitors, wind turbines, electric cars, solar panels, rechargeable batteries, space and defense-industry technology and products.
Third, Australia is a recognized global leader in Mining Equipment and Technology Services (METS). India lags behind other mining countries across all stages of mining—geoscience, exploration, development, production and reclamation. Australian METS sector has a number of comparative advantages, which if utilised properly can offer a range of solutions to the mining industry in India.
Fourth, the discourse on higher education has been limited to the number of Indian students enrolling in Australian Universities. The emphasis on vocational training in India is important to create a globally-ready skilled workforce. There is a need for reskilling, upskilling and deep-skilling. The Ministry of Human Resource Development (MHRD) has released Education Quality Upgradation and Inclusion Programme (EQUIP) to transform higher education in India through joint collaborations in Science, Technology, Engineering and Mathematics (STEM) and creating institutes of excellence and global competence within the country.
Fifth, Australian superannuation funds are among the world's largest with respect to volume, and do not have much exposure to Indian markets as they have with other international economies. The funds can look at investing in Indian infrastructure projects such as industrial corridors, ports, smart cities, airports and railway projects.
Sixth, India already looks to Australia as a model in sports for achieving results. The Indian Government has made improving sports outcomes a priority. There is a growing interest in sports science and sports technology.
Seventh, a report by NITI Aayog claims that twenty one cities in India including Delhi, Bengaluru, Chennai and Hyderabad - will run out of groundwater by 2020, affecting around 100 million people. The report also says that 40 per cent of India's population will have no access to drinking water by 2030. The newly created Ministry of Jal Shakti (waterpower) is primarily to oversee water resource management. Australia is a good example of how effective management can save a country on the brink of water stress. From 1997 to 2009, Australia faced the worst drought in the country’s recorded history. Despite the dire situation, Australia reduced water demand per capita by almost 50 percent by implementing a slew of policies and programs. So cleaning of water, preservation of water can be areas to collaborate in specifically during the times of climate change taking center stage in global policy discourse.
Eighth, India and Australia can combine complementary skills and expertise to develop new innovations, by leveraging Australian expertise in areas such as agri-tech, health-tech, water management, food processing and food storage, sports technology, energy efficiency and renewables, with Indian expertise including in data analytics, biotech, and mobile applications.
Ninth, greater maritime cooperation, and a stronger alignment on regional Indo-Pacific architecture has featured heavily in recent Australian strategic discourse, especially since the release of the 2013 defense white paper, the 2017 foreign policy white paper and the renewed Quad dialogue involving India, Japan, US and Australia. During Morrison’s visit, Australia and India are expected to sign logistics services agreement to simplify interoperability and enable military platforms to receive support and supplies across bases in both nations, reiterating the need to facilitate stronger strategic ties driven by congruence and issue based alignment.
With India’s recent pullout from the Regional Comprehensive Economic Partnership agreement (RCEP), there is an opportunity for Australia to negotiate a bilateral comprehensive economic partnership agreement (CECA) that is mutually beneficial, addresses each other’s concerns and provides market access. Both governments began negotiating CECA in 2011 and the talks have progressed in spurts, held up primarily because of two sticking points: India’s demand on free movement of professionals versus Australia’s demand for enhanced agriculture market access in India. An equal balance between goods, services and investment within the Free Trade (FTA) ambit can provide a new push to this relationship.
According to the Joint Study Group (JSG) report, the welfare gain from the FTA could be in the range of 0.15 and 1.14 per cent of GDP for India and 0.23 and 1.17 per cent for Australia. Hence, curating a deal that addresses and acknowledges the needs of Australia and India, which are at different levels of development, will be of prime importance. India is exporting only 10% of its GDP and is heavily dependent on domestic consumption. Australia’s support in building India’s export led growth strategy, and India’s need to create globally competitive goods and enhancing its global supply chain is a symbiotic dimension that can be explored. Manufacturing in India, in a cost-competitive environment, could be the key for Australian companies to expand their footprints to other parts of the world. ‘Designed in Australia - Made in India’ can be the new focus area for this partnership.
The visit of Morrison is an opportunity to reflect positions and perceptions, which could facilitate stronger strategic, economic and people-to-people ties between Canberra and New Delhi. Australia could also initiate an annual leaders' meeting between the two Prime Ministers. Both governments can convey their long-term vision for this relationship led by mutual obligation, timelines and tangibles. The word “engagement’’ is crucial which should become a permanent national project for both countries.
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Natasha Jha Bhaskar is General Manager of Newland Global Group a leading corporate advisory firm specialising in the IndiaAustralia space based in Sydney. Natasha has ...Read More +