More than Cricket, Curry and the Commonwealth: Forging a stronger Australia India relationship
Whilst there have been false starts to the Australia – India relationship in the past, could the convergent COVID-19 pandemic and North Asian geopolitics tensions be the trigger for accelerating ties between our two countries towards a strategic partnership?
With a surge in COVID-19 cases in recent weeks, all eyes are on India’s response to the immediate health crisis and eventual return to economic activity and growth. Australia is well placed to assist India having (so far) managed successfully the twin health and economic crises. This will no doubt be a central theme at the bilateral virtual summit planned between Prime Ministers Morrison and Modi on 4 June. It is in Australia’s interests to not only share our recent experiences but to proactively work with India in strategic ways to partner across scientific & medical research, technology and innovation in the health sector.
India has its work cut out to manage the health crisis and reinstate economic growth which in a pre COVID-19 world, was forecast to be at least 5-6 percent in FY20, but is now slashed by the Reserve Bank of India into negative territory for FY21. An economic recovery in the second half of the current fiscal year is critical not only to India’s economy, but also Australia’s as we seek to urgently diversify our trade and investment relationships.
The present geopolitical context provides Australia and India the opportunity to enshrine the economic relationship in fundamental shared values and strategic interests – moving away from the clichéd 3Cs of Cricket, Curry and the Commonwealth and an otherwise transactional attitude to business. A bilateral economic relationship built on these pillars will enable incremental and sustained growth into the longer term.
In a post COVID-19 world – an era of rising geopolitical tensions, changing business models and shifts and realignments in global supply chains for greater business resilience and stability – Australia and India have the opportunity to refine and redirect focus on those areas and sectors where there are immediate and obvious demand and supply side requirements.
Australia has much to gain from India’s recovery and continued growth trajectory over the next decade and beyond. This is the very crux of, An India Economic Strategy to 2035, (IES) commissioned by the Australian Government and authored by Peter Varghese AO. The IES sets out in great detail an economic plan for Australian companies to study with an ambition for Australia to bring India into its top 3 export and investment markets. Mr Varghese asserts, “There is no market over the next 20 years which offers more growth opportunities for Australian business than India”.
In a post COVID-19 world, all of the 10 sectors highlighted in the IES will continue to be of relevance for Australian organisations with defence and security being an increasingly prominent feature and matter of strategic importance in the bilateral relationship.
For Australian businesses and tertiary institutions, there are 5 key areas of opportunity now and into the medium term.
The first is education. Australian universities should reimagine more sustainable business models, leveraging online delivery to reach a larger international target market and help India achieve its massive education requirements. The IES contemplates a consortium of Australian universities setting up in India, the same India’s elite educational institutions (IIMs/IITs) should be encouraged to establish a presence in Australia to maximise the impact of two way skills and capability development for even greater collaboration in areas of R&D and industry commercialisation.
The second priority sector is agribusiness. The opportunities for Australian agricultural and premium produce exports to India are opening up with barley and a variety of fruits the latest developments. India is a massive market of young, health conscious, vegetarian consumers seeking high quality fresh and safe fruit and vegetables. Indian beer makers may well welcome the opportunity to buy barley from Australia in a time where high tariffs in China are making exports less attractive. The current massive locust attack in India also highlights opportunities for Australia to help with crop protection solutions, and more broadly, methods for boosting crop productivity and yields.
The third sector is resources and mining equipment, technology and services (METS). India’s recent announcement to open up the mining sector for private participation will see the acceleration of new mining projects and Australian METS providers are extremely well placed to participate.
The fourth sector is health. Australia and India share competitive advantages in the areas of medical research and biotech which in the immediate term, could be focused on joint initiatives addressing the COVID-19 pandemic. The continuity and extension of the Australia India Strategic Research Fund will be critical for this purpose. Australian organisations have opportunities to help India build up its healthcare system and implement new and innovative service and delivery models such as tele-health. Australian life sciences companies are also encouraged to explore how they might participate in the expansion of the Indian pharmaceuticals industry in a post COVID-19 world.
The fifth sector is infrastructure. India has announced the further opening up of sectors such as aviation and power distribution utilities for private investment participation over and above roads and highways, ports and railways infrastructure. Australian superannuation funds should continue their exploration of alternative large scale and higher yielding infrastructure investments outside of traditionally favoured western markets.
Without adding a sixth sector, it goes without saying that as and when international travel resumes, there will be great demand and hence business opportunities in the tourism and ancillary services sectors. It’s probably also about time Australia rolls out the red carpet for another Bollywood blockbuster to be shot on our beautiful shores!
India’s reciprocal Australia Economic Strategy (AES), which is expected to be launched imminently will complement the IES highlighting business opportunities for Indian companies through trade and investment with Australia. It will be the first of its kind for India with any nation.
Through these complimentary and comprehensive bilateral reports, governments on both sides have set the strategic intent and aspiration for growing the bilateral economic relationship and this will no doubt be reinforced during the upcoming virtual summit which we expect to also cover broader cooperation in areas of defence and security, including conclusion of the much-awaited Mutual Logistics Sharing Pact.
Businesses must now leverage these comprehensive blueprints and formulate their own specific plans to take tangible steps towards realising trade, investment and other collaboration opportunities. Critical to this is raising India-Australia organisational literacy and awareness through to the board level. The 700,000+ strong Indian diaspora in Australia comprising both Australians of Indian origin and Indians resident in Australia should play an important role in this exciting future.