By Sarosh Bana.
“Largest ever single boost to bilateral ties by an Australian government” – Australia’s High Commissioner to India, Barry O’Farrell AO
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 A$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 invest 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.
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, Australia 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.
Australia’s High Commissioner to India, Barry O-Farrell AO
Australia also desires to be India’s primary partner in agribusiness and in technical knowledge, pursuing greater market access as a priority. With resources remaining central to the economic relationship, our 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.
Our cooperation is also deepening 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.
The western state of Maharashtra and its capital city, Mumbai, which is also India’s financial centre, will, of course, be central to the success of the 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.
