The much-awaited Government of India (GoI) 'Australia Economic Strategy' (AES) report, authored by Anil Wadhwa, Former Secretary (East), Ministry of External Affairs (MEA), was recently released in the presence of Commerce and Trade Minister Piyush Goyal, along with the High Commissioner of India to Australia A. Gitesh Sarma, and Deputy High Commissioner of Australia to India Rod Hilton.
India's AES is a reciprocal report to Australia's 'India Economic Strategy to 2035' (IES 2035), authored by Peter Varghese. The IES2035 earlier had 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, $100 billion by 2035, and a bigger, better trade basket with balanced trade relations between both countries. AES is one of its kind report, first ever attempted by the GoI for any specific country.
India's AES covers a wide range of sectors, keeping into account the post-COVID recovery model that both Australia and India will need to work upon. The emphasis is on sectors including Mining and Resources, Mining Equipment and Technology Services (METS), Critical minerals, Pharmaceutical, Medical Devices and Technology, Soil Mapping, Blue Economy, Sports Management and Sports Technology, Innovation and Research, Agri-tech, Health-tech, Water Management, Food Processing and Food Storage, Energy Efficiency and Renewables, Railways, Gems and Jewellery, Textiles and other emerging fields for the future, offering creative ideas and areas in which Australia and India have not engaged with each other (like cost-effective clinical trials, traditional medicines like Ayurveda, IT-specific visas for talent flow, healthcare, trauma care, aged care support).
The AES strongly recommends a six-month review of AES and IES 2035 implementation for the next two years. It asks for sector-specific specialised delegation exchanges, sharing of more success stories between both countries, focus on matchmaking of businesses with similar goals, a more operationalised and granular approach to execution, developing corporate Australia's interest in India's growth story, ensuring regular engagement between trade bodies, sector-specific joint working groups, mutual investment funding across key sectors, setting up of startup & innovation funds and humanities fund, more direct flights between Australia and India's major business hubs, a renewed focus on negotiating the Free Trade Agreement (FTA).
India's economic diplomacy, post-COVID-19 pandemic, has largely centered on its major domestic fundamental and structural reforms across diverse sectors (agriculture, mining, defence production, railways, space, and atomic energy, etc.) and international outreach to attract foreign investment.
The focus has been on land, labour, liquidity, and laws enhancing inward investments (by opening up FDI in most sectors), generating jobs, protecting livelihoods through building social infrastructure (education, health, and agriculture), easing regulations, and improving the ease of doing business, creating an enabling environment for India's manufacturing sector (with broadening the definition of MSME sector, production linked incentive schemes for ten champion sectors to boost manufacturing).
With severe disruptions in industrial production and consumption spending, the focus has been to spur demand and build infrastructure, which are key economic drivers to help India achieve the $5 trillion economy target by 2024.
The UN Conference on Trade and Development (UNCTAD) asserted in its 2020 World Investment Report that India's large market would continue to attract market-seeking investments to the country. Most recently, the MEA launched the Economic Diplomacy Website to showcase India's economic, sectoral, and state-wise strengths that make for an attractive economic partnership. India is focusing on weaving its regional aspirations with its national ambitions.
For Australia-India ties, 2020 has been a year of optimism and promise to inspire and deliver action. Sending out a clear message that the crisis has laid out the framework for deeper engagement and enhanced opportunities. The year started with Australia India Business Exchange (AIB-X), one of the largest trade missions to India in the last five years, of 120 members delegation led by Trade, Investment, and Tourism Minister Simon Birmingham.
Followed by the historic virtual summit between the Australian and Indian Prime Ministers which led to the elevation of this bilateral relationship to a Comprehensive Strategic Partnership with agreements on cyber-enabled critical technology cooperation, cooperation in mining and processing of critical and strategic minerals, agreements on cooperation in defence, science and technology, and mutual logistics sharing agreement.
Australia and India are situated in the most dynamic region of the Indo-Pacific that is the centre of economic and strategic gravity today. The Indo-Pacific provides a meeting point for Australian and Indian interests, displayed through the Supply Chain Resilience Initiative (Australia, India, and Japan) and Quad (United States, India, Japan, and Australia), extending the scope of India's evolving strategic congruence supplemented by Australia's recent participation in Malabar exercises.
The Indo-Pacific captures a mix of India's broadening horizons, widening interests, and globalised activities. The scale and scope of these alignments will depend on the speed to build constant strategic and economic engagement. Transparency, trust-based and reliable alliances will drive India and Australia's actions going forward.
When strategy meets action
The need to "catch up" has to be complemented with precise action. The two reports (IES 2035 and AES) together create a perfect roadmap for future economic engagement between India and Australia. The shift that's categorically needed for Australian businesses is from "Why India?" to "How-to in India?"
This is a significant step in implementing the Memorandum of Understanding on Critical Minerals between India and Australia. The success of India's e-mobility, renewable goals primarily depends on the availability of these critical minerals. 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 defence-industry technology and products.
Australia has released a list of 24 key critical minerals where it can emerge as a potential supplier, along with a list of critical minerals projects in the country, which offer off-take and investment opportunities for public and private sector organisations across the world.
India's public and private sector, along with its government consortium (KABIL) on critical minerals, can look at these assets to secure future supplies and build an efficient energy economy and futurecompetitiveness. Mining and Resources is Australia's number 1 sector, in attracting outward investments because of its conducive doing business environment supplemented by policy certainty.
The opportunity will not come to Australian businesses, they must be sought out actively and assertively. Curiosity and continuity are key. The word "engagement'' is crucial which should become a permanent national project for both countries. Let's hope that the quality of the relationship will catch up with its ambition, share the relentless spirit and ethos of cricketing ties between the two countries, and bolster economic ties as well.
(Natasha Jha Bhaskar is General Manager of Newland Global Group, a corporate advisory firm specialising in the Australia-India space, based in Sydney)
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