Maintaining that India is moving back to being the center of gravity of the world that it had been for 1800 of the past 2000 years, Australia's Minister of Trade and Investment Andrew Robb on Friday said both countries were on the cusp of a great opportunity and a humanitarian miracle in terms of taking their ongoing services-related exchanges and engagements to a whole new level.
He listed seven key factors responsible for this emerging politico-economic phenomenon viz. (1) The personal rapport between Prime Ministers Narendra Modi and Tony Abbot and their shared vision on world issues and opportunities; (2) The economic policies of the Narendra Modi-led Indian Government, which was keen to forego the traditional subsidy-oriented way of doing business and move towards pursuing supply-side economics by emphasizing on accessing global expertise from a wide range of services, (3) The Indian Government's desire to enhance the skill sets of its citizens, (4) Commonalities on security issues, (5) A very high level of trust between the governments and the leaderships of the two nations; (6) The presence of over 40,000 students of Indian origin in Australia who would provide linkages for the future; and (7) Cricket as a binding force.
He said the fact that this was his third visit to India in the last seven months reflected the important role that Australia can play as India's "trusted strategic partner."
He said the focus of his visit to Delhi this time was aimed at "driving the conclusion of a Comprehensive Economic Cooperation Agreement (CECA) or Free Trade Agreement (FTA) between Australia and India by the end of 2015" as directed by Prime Ministers' Abbot and Modi.
"We are on track to complete the CECA, but a serious amount of work is still to be done. We have arrived at a point where the pathway has been set for reaching this objective. We have clearly identified the services component areas in Australia that India can access. We are also of the view that there is an opportunity for Australian firms to have a greater presence in India, up from the 200 firms that already have a presence here," Robb said.
"If we are to build strong linkages, the roots need to be put in place. We believe there exists bilateral opportunities in health services, education services, engineering services, financial services, legal services, project management services, sporting and sporting management services, water management services and irrigation services," he added.
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"We see tremendous synergies between the dynamic sectors in Australia and India... A mutually beneficial CECA, complemented by action to reduce trade barriers at the WTO and through regional mega-deals such as RCEP, will be critical in helping India compete in an increasingly integrated global services environment. Increased trade and investment will also help ensure that Indians are well represented among the 3.2 billion strong Asian middle class that will have emerged by 2030," Minister Robb said.\
He said Australia was the world's 12th largest economy and one that had enjoyed uninterrupted economic growth for a quarter of a century, a situation that could be attractive for India.
"It's about two-way transfer of investment, technology and expertise, and here, the potential benefits for India are immense. Some of the most exciting opportunities are in agriculture," Robb said while emphasizing the fact that the Indian dairy industry could narrow is existing productivity gap with Australia in this sector through appropriate investment and technology transfers.
Robb also said that behind all these potential areas of cooperation, the point that must not be missed is the participation of Indian IT services, which currently enjoyed almost monopolistic status across the globe.
He also saw huge potential for the setting up of service-related entities along an almost 2000-kilometer-long Delhi-Mumbai industrial corridor, not to speak of the already 600 centers of excellence.
"In and around this, there are investment issues to be discussed and the need to focus on complementarities between the Australian and Indian economies," Robb said.
Robb, who addressed the Global Exhibition on Services here on Thursday, said, "We are looking with this (FTA) agreement to ultimately see thousands of Australian large and small companies and all the MSMEs positioning over here, taking the risk, and developing that sort of relationship, that sort of business working with partners."
"We already have got a strong partnership in India in services. But we want to do a lot more and I think you want to do a lot more. In fact, Prime Minister Modi, when came to meet our Prime Minister Tony Abbott in September to congratulate the government on their electoral success and wished them best, we had in the first meeting, one of the key issues was what are we going to do on the trade and investment front, and that's when, the two prime ministers decided that within a year, by the end of 2015, we would complete a comprehensive quality, a great economic agreement for trying investment services," said Robb.
India and Australia began talks on a Comprehensive Economic Cooperation Agreement (CECA) on 2011 which aims to liberalize access to markets in goods and services and ease investment rules.
An FTA with India would cap an unprecedented two years for Australian trade negotiators, who have reached landmark free trade deals with China, Japan and South Korea.
Trade between Australia and India stands at around USD 15 billion a year, or just a tenth of that between Australia and China.
India is seeking liberalization of investment and better access for its low-cost, labour intensive manufactured goods and components.
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