India, Australia target $100bn trade by 2030

“The two economies are not competing, but complementing each other. Sector by sector analysis shows that $100 billion trade [in goods and services] can be achieved by 2030… So, we are looking at quadrupling this relationship in 8 yrs.” — PIYUSH GOYAL, commerce minister

MELBOURNE: India and Australia can potentially take their bilateral trade from $27.5 billion to $100 billion in eight years, the trade ministers of the two countries said on Wednesday, days after the two sides struck an interim trade deal that has significant implications for the economies of both countries as well as geopolitical alignments, particularly in the context of checking China.

The interim free trade agreement, among eight such big ticket partnerships India is working on with countries such as the UK, the European Union nations, Israel and Canada, will pave the way for both sides to boost exports and ease rules for tourists and working professionals.

Addressing Australian businesses in Melbourne, commerce minister Piyush Goyal said: “The two economies are not competing, but complementing each other. Sector by sector analysis show that $100 billion trade [in goods and services] can be achieved by 2030.”

“Let’s be ambitious, let’s look at $100 billion engagement by 2030…So we are looking at quadrupling this relationship in eight years,” he said, asking industry to make efforts in this direction as the two governments are willing to provide policy support.

Australian trade minister Dan Tehan said that the target is achievable since the two partners are negotiating a more comprehensive agreement in various areas, including sports and dual degrees programmes for students pursuing special courses in streams such as science and technology.

“The arrangement, which is expected soon, will help thousands of students from both countries. India will provide educational opportunities in subjects such as maths and science and Australia offers education and research opportunities in specialised subjects. This will not only provide best of learning in the two counties, but also

halve the cost of education,” Goyal added.

Tehan attributed the growing relationship between India and Australia to the Quad’s values. “Keeping the Indo-Pacific free and open as a place where liberal democracies can flourish is just so, so important,” he said.

Friction between Australia’s government and Beijing has

brought a series of official and unofficial Chinese trade sanctions on Australian exports including coal, beef, seafood, wine and barley. Meanwhile, India has been looking to boost exports, including by offering countries an alternative to China. Both ministers said that after signing the India-Australia Economic Cooperation and Trade Agreement, they are now considering to expand its scope in areas where greater cooperation is possible.

India and Australia on April 2 signed a comprehensive, but interim free-trade agreement that provides zero duty exports to 100% tariff lines from India to the Australian market, benefiting labour-intensive sectors besides providing greater access to services space through liberalised visa norms for students and professionals, including quota for Indian chefs and yoga teachers. Australia will be able to supply various raw materials and intermediaries at zero duty.

Goyal and Tehan said the newly forged trade deal will also help to enhance geo-strategic ties between the two Commonwealth nations. India’s other free trade agreement negotiations also involve important commonwealth countries , United Kingdom and Canada, Goyal added.

He said areas of further cooperation include education, research, start-ups and agri-tech. He also sought investments from Australia in areas such as infrastructure. “We have a big market and people aspire for a better quality of life. This gives a huge opportunity for India and people around the world,” he said.

Goyal invited the Australian industry to invest in India. “Your investible surplus can get a fair return in India,” he said. Officials said India and Australia are negotiating a more comprehensive agreement on goods and services, which may also include movement of skilled and agricultural labourers to the continent. An Indian official said: “There are various things on the table and are being negotiated. It is too early to conclude as it will depend on what they would seek in lieu of that. India is committed to protecting its agriculture and farmers’ interest.”

TV Narendran, president of the Confederation of Indian Industry (CII), said: “Exports in several labour-intensive sectors will benefit from the reduction of import duty by Australia. These include textiles and apparel, leather and sports goods, jewellery... Key exports such as pharmaceutical products and medical devices, machinery, electrical goods and railway wagons also stand to gain substantially. With this, we expect our exports to double in five years. We appreciate the easing out of the labour market test, easier visa and lengthy stay for Indian professionals in Australia.”