Event ReportsPublished on Dec 16, 2019
Australia-India relations: trade, geo-strategy and digitization of maritime connectivity

The 4th edition of the Friday Afternoon Talk series, organised by Observer Research Foundation, Kolkata on 13th December, 2019, steered the conversation away from India’s immediate littoral neighbours in the Bay of Bengal, to her neighbour across the Indian Ocean - Australia.  The focal agenda of this panel discussion was based on an ORF Occasional Paper (ORF OP 219) titled “India and Australia: From 4,000 nautical miles to 22 yards” co-authored by Soumya Bhowmick, Roshan Saha and Pratnashree Basu – Junior Fellow, Research Assistant and Associate Fellow at ORF Kolkata respectively.

Dr. Nilanjan Ghosh, Director, ORF Kolkata in his welcome remarks as the Chair, comprehensively placed the discussion against the context of a shared colonial history between the two countries and the current unfolding of new dynamics in the geo-politics of the Indo-Pacific, accompanying the revival of the Quad, the rise of China’s market imperialistic design through the BRI and India’s withdrawal from the RCEP.

The proceedings were initiated by a presentation on the paper which was at the centre of discussion, by Roshan Saha. The paper explores the ties between India and Australia that range from geostrategic cooperation and trade, to soft power mechanisms such as cricket and tourism. It also talks about substantial opportunities for trade and investment flows between the two countries, although these have been largely underdeveloped over the years. The immense scope of complementarities between the two nations can serve as a driver for boosting bilateral trade and information flow. Moreover, the trilateral network between India and Australia, and the ASEAN, is also brimming with potential in the Indo-Pacific region. Finally, the global attention towards digital economics, along with technological innovation in both countries, especially blockchain technology, is poised to enhance their maritime connectivity and ease of doing business.

The first discussant, Mr. Shubhodip Ghosh, Director General, Bengal Chamber of Commerce and Industry, commented exclusively on the paper’s call for trade based on complementarity and comparative advantage. He brought to the audience’s notice that India has a trade deficit with most countries in Asia, the dominant amongst them being China, and therefore, the argument did not necessarily hold true as cheaper imports are always preferred. As countries are moving away from globally affiliated organizations like WTO to inward-looking regional trade blocs like NAFTA, Ghosh critiqued India’s membership in one of the least utilised trade blocs – the SAARC. Against this backdrop, he lamented that RCEP would’ve been a great opportunity to not only widen the market but also for MSME’s to enter the global value chains. Ghosh outlined the significance of West Bengal in hosting a number of Australian METS (Mining Equipment, Technology and Services) companies and of Kolkata port acting as an entry point of Australian imports. This significance, he mentioned, has been recognised by Australia in identifying West Bengal as one of its 10 priority states in its India Economic Strategy to 2035. In consonance with the theme of the Talk, he exclaimed that India is obsessively “looking westwards when we have one of our strong eastern partners in Australia who have already done their homework”.

Mr. Joydeep Datta Gupta, Partner, Deloitte and the second discussant, broke down the relationship between the two countries into 3 categories- government-to-government, people-to-people and business-to-business. Lauding the absence of conflicts between the governments and an affinity between the people, Mr. Datta Gupta limited himself to the business aspect of India-Australia bilateral ties. He maintained that the two countries were already partnering in businesses across the globe. Providing experiential evidence with his clients, he narrated how India had entered the global value chains by serving as back-offices to Australian enterprises catering to Australian people and mentioned that certain Indian states were using Australian expertise to inculcate best practices in mining. Furthermore, a partnership with talent-rich India would allow Australia to tap into a larger market. To this effect, he identified potential meeting points in (a) sports - where Australia’s excellence in the Olympics would be beneficial for the Indian sports fraternity, (b) agriculture - where the agrarian Indian economy could benefit from Australian competencies in the agro-industry (c) education – where digital technology could be exploited for minimising physical movement of Indian students. Mr. Datta Gupta concluded by opining an expansion in the relationship between the two countries in the absence of animosity between their governments, people and business.

Responding to the Chair’s comment on the recent decision to establish an Australian Consulate in Kolkata, the final discussant, His Excellency Mr. Andrew Ford, Consul General, Australian Consulate-General Kolkata, stressed on the strategic importance of the move. Kolkata fits into the scheme of things by virtue of its connectivity to the north-eastern states of India along with the India Economic Strategy to 2035’s core recognition of India as a favourable trade partner. Mr. Ford emphasised on the need for the countries to be proactive in the absence of an FTA and India’s withdrawal from the RCEP. He also mentioned the unrealised potential in FDI and possible partnerships on the basis of shared interests such as international law and regional architecture.

In the closing segment, Mr. Shubhodip Ghosh captured the essence of the on-going discussion my mentioning that “with or without the RCEP, focusing on the Southeast quadrant and Asia-Oceania” has become a “necessity” for India. Deputy Consul General at the Australian Consulate in Kolkata, Mr. Daniel Sim commented on changing perceptions of Australian business towards India and highlighted the Government of Australia’s effort to enhance this through Australia-India Business Exchange in February 2020. The Chair, Dr. Nilanjan Ghosh, closed the day’s proceedings by appreciating the array of questions surrounding RCEP, digital trade and connectivity that had emerged during the course of the discussion.

This report has been compiled by Nidhi Sharma, research intern at ORF Kolkata with inputs from Pratnashree Basu, Roshan Saha and Soumya Bhowmick - Associate Fellow, Research Assistant and Junior Fellow at ORF Kolkata respectively.

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