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Australia, India launch free trade negotiations & vow to double bilateral trade PDF Print E-mail

© Neena Bhandari 

ImageIndia and Australia launched the Free Trade Agreement (FTA) negotiations on May 12, 2011, to achieve greater economic integration and double the trade between the two countries to A$ 40 billion within the next five years.

Bilateral trade between the two nations is currently worth around A$ 20 billion. In 2009-10, Australia exported $19.8 billion worth of goods and services to India, making it Australia’s third largest export market.

Merchandise exports were valued at $16.2 billion, growing by an average of 22 per cent a year during the past four years. Education exports to India in 2009-10 were $3.1 billion. 

India’s Minister for Commerce and Industry, Dr Anand Sharma, who was on a three-day visit to Australia, had positive and constructive dialogue with Prime Minister Julia Gillard, Foreign Minister Kevin Rudd, Resources, Energy & Tourism Minister Martin Ferguson, Agriculture Minister Joe Ludwig, Defence Minister Stephen Smith, Trade Minister Craig Emerson, and NSW Premier Barry O'Farrel.

 

Dr Sharma, who was leading a high-level business delegation of senior executives from leading Indian companies, met his Australian counterpart, Dr Craig Emerson in Canberra for the annual Australia-India Joint Ministerial Commission trade talks. 

 

Underlining the importance of achieving a high-quality, truly-liberalising trade deal with India that supported the multilateral trading system, Dr Emerson said, “The FTA negotiations form an important part of the wider economic objectives set by the Australia-India Strategic Partnership agreed in November 2009”.

 

The Australia-India relationship was elevated to a “Strategic Partnership” during former Prime Minister and now Foreign Minister Kevin Rudd’s visit to India in November 2009, reflecting in large part the complementary nature of the two economies.

 

“A comprehensive FTA would help broaden the base of merchandise trade, remove non-tariff barriers to services trade, facilitate and encourage investment and address behind-the-border restrictions on trade. The extremely strong growth in recent years in trade and investment ties with India will continue, increasing both in pace and scope”, Dr Emerson added.

 

Mr Naveen Jindal, parliamentarian and Executive Vice-Chairman and Managing Director of Jindal Steel and Power, has been appointed the India co-chair of the Australia-India Chief Executive Officers’ (CEO) Forum and Mr Lindsay Fox, founder of one of Australia’s largest transport and logistics companies, Linfox, will be the Australian co-chair. The first CEO Forum, which will provide business guidance and advice to the governments of both countries as they negotiate the FTA, is scheduled to convene later this year.

The two ministers will be meeting again later this month at the OECD Ministerial Council in Paris, where they will continue to work on international, regional and bilateral trade and economic issues. India’s steady rise as a global economic powerhouse is continuing to open up new export and investment opportunities for Australian businesses in a diverse range of sectors from resources to education, advanced manufacturing and infrastructure to clean technology, food and beverage to sports and major entertainment among others.

“We have a strong and growing relationship with Australia. We have just opened a consulate in Perth and are opening a cultural centre in Sydney as India’s dynamism is coming to the fore in every field – dance, music, films”, Dr Sharma told a gathering of Indian Diaspora and Australian Government and business representatives at a reception hosted by the High Commissioner, Mrs Sujatha Singh, in Sydney.

 

The Minister commended the Diaspora for its rich entrepreneurial contribution in enhancing bilateral economic ties and strengthening people to people linkages.

Dr Sharma also addressed the Joint Business Council meeting co-hosted by the Australia India Business Council (AIBC) and the Federation of Indian Chamber of Commerce and Industy (FICCI). In his keynote address, the Minister highlighted the trajectory of India’s economic rise and emphasised that the growing economic ties with Australia also presented a solid foundation for the Asia Pacific region countries, which will be the driving engines of global economy and recovery.

“We are democracies and pluralistic societies- countries which are playing a significant role in the region and global arena. Australia and India are involved in a strategic partnership and these countries are linked like never before. Developments taking part in our part of the world will have an impact on global picture”, Dr Sharma said.

“There has been a shift in growth as Asia now is the driving force. Countries in Asia will have a definite influence in shaping the world. More than 50 per cent of the global output of the world is now coming from this region with total trade reaching 19 trillion. In real terms India is a 1.7 trillion dollar economy. It was the efforts of G20 countries which saved the world. G8 could not do it. It was a non-inclusive group. Trillions of dollars were poured in to solve the crisis. Both India and Australia are integral to economic resurgence of Asia Pacific,” he added.

Also speaking at the AIBC luncheon, NSW Parliamentary Secretary for Asia-Pacific Trade, Paul Toole said, “The NSW Government places great importance on our economic, trade and cultural relationship with India; building these ties is one of the top priorities of the new Government, which has committed to sending a high-level delegation to India within our first 100 days in office”.

 

Sydney-based firm Cochlear, innovator and manufacturer of a unique hearing implant system designed to give customised hearing solutions, first entered the Indian market in the early 1990s and now have entered into marketing agreements in Bangalore and New Delhi. FAT Systems Pty Ltd from Tamworth is involved in blending ethanol with diesel and has established an office in Bangalore. FAT Systems has recently been awarded a CDM (Clean Development Mechanism) from the United Nations Framework for Climate Change. And Macquarie Equities from Sydney set up an office in Mumbai in 2005 to report on the local equity scene for their overseas clients, and has already hired around 50 local specialists. A property division was set up in 2008 and Macquarie is currently setting up an infrastructure fund in collaboration with the State Bank of India. In 2009 the company opened an office in New Delhi to support their operations.

 

In the past three years, Indian companies have announced investments of A$615 million in NSW which will result in the creation of 580 jobs in the state. Examples include MphasiS, a subsidiary of Hewlett-Packard and India’s sixth largest ICT company, which is establishing a centre of excellence in Wollongong, investing A$1.5 million and creating 256 highly skilled jobs over five years. Riverina Oils and BioEnergy is investing A$63 million in an oilseed plant in Wagga Wagga creating 65 jobs. The SP Jain Centre of Management a leading Indian provider of business management programmes is investing A$45 million in a campus at the Sydney Olympic Park creating 50 full-time and 100 part-time jobs over five years.

 

Mr Toole said, “Next year, 2012, is the Year of Australia in India which will provide opportunities to emphasise trade and investment, people-to-people links, and other areas of cultural collaboration”.

 

Gujarat NRE Coking Coal Limited is expanding its coking coal mines in the NSW and planning to spend A$500 million and create 150 jobs. Addressing the AIBC gathering Mr Jindal said, “India happens to be 2nd largest market for coal and copper for Australia. We have huge energy requirements for 1.2 billion people. Indian companies are investing in coal and gas processing. Already we are working together for 25 million Australia India research fund”.

 

Bilateral energy and minerals cooperation with India is fundamental to this strategic partnership. India values Australia as a large, stable and reliable supplier of energy and resources – products India needs to fuel its growth.

 

However, the Labor Government’s refusal to sell uranium to India because it is not a signatory to the UN Nuclear Non-Proliferation Treaty, did strain the relations. The federal opposition is demanding the controversial issue of uranium exports be included in the FTA negotiations.

 

"They should take the opportunity to open negotiations for the sale of Australian uranium to India," opposition trade spokesperson Julie Bishop was quoted as saying by a news agency.

 

Following the uproar in the Indian media in recent years over attacks on overseas Indian students and the rising Australian dollar coupled with changes to student visa/permanent residency requirements, student numbers from India have reduced but there are new developments in partnership and collaboration in the sector.

 

And even as cricket continues to dominate the psyche, there is growing interest in both countries in other categories of sport from F1 and V8 super car racing and football.

 

There is little doubt that New Delhi matters, and matters a lot, to Canberra.

 

© Copyright Neena Bhandari. All rights reserved. Republication, copying or using information from any www.india-voice.com content is expressly prohibited without the permission of the writer and the news agency through which the article is syndicated.
 
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