Hope for trade boost
‘An India Economic Strategy to 2035’, penned by former Australian High Commissioner to India Peter N Varghese, bats for more economic linkages between the nations at a time Indian businesses have been scouting for newer overseas markets, egged on by the government. “Australia's trade with Beijing is many multiples of our trade with New Delhi, so I’m not expecting India to overtake China. The vision in the report is to bring India up to the third position among Australia’s trade partners," Verghese said.
Agri business, along with the associated sectors of logistics and food processing, is among the major sectors that can see economic ties jump, he added.
India’s yawning trade deficit has principally been due to Australian coal and natural gas exports worth over $8.91 billion in the first 11 months of 2018-19. Total imports from Australia were pegged at $12.16 billion, down from nearly $14 billion the year before. In the last financial year, India has dropped out of the list of prominent markets receiving Australian farm produce.
Australia had sent over $924 million worth of chickpeas and pulses and $125.63 million worth of wheat in FY18.
These imports have witnessed a steady rise over four years and agri majors such as GrainCorp and Olam Australia are looking to scale up business in India and nearby markets, according to a senior official from the Australian High Commission. But total imports of wheat hit only $5 million, while chickpeas worth only $23 million made their way to India.
Official statistics show that India's exports to Australia stood at $3.2 billion in the April-February period of 2018-19, down from $4 billion in 2017-18. Lower crude oil prices have led to lower realisations from processed petroleum shipments ($600 million in April-February period of 2018-19) as compared to $1.35 billion in the year before. However, almost all other categories of exports to Australia have equally stagnated.
The 500-page report may also soften Australia’s stance on opening up services trade as part of its bilateral relations with India. The report shows Australian universities and the overall educational sector as massive beneficiaries, at a time when the number of Indian students to Australia has continued to grow.
However, New Delhi remains cautious on a sudden breakthrough in trade talks as both nations have also been pitted against each other on the proposed Regional Comprehensive Economic Partnership (RCEP).
"A lot of discussion has already happened between CECA talk rounds. The barriers to free trade are increasingly becoming less about tariffs and both nations have worked on removing those. But Australia had earlier been looking to conclude RCEP talks first and test the waters, before restarting talks on a trade deal with us," the official added.