New India means Business, ready for FTAs that are reciprocal and equitable

#AustraliaIndiaNEXTLEVEL

A week after the signing of the Australia India Economic Cooperation and Trade Agreement (AI ECTA) trade deal on the 2 April, when many parts of India marked Gudi Padwa, a traditional new year festival - the past nine days (also celebrated as Navratri) have been no less than a festival celebration in #Australia, awakening the dormant energy entangled in years and years of wait and hope. The enthusiasm, shared focus, and shared commitment across the political arena, business champions, the bureaucracy and diaspora connectors have been incredible.

Since the re-launch of the Free Trade Agreement (FTA) negotiations between Australia and India in Sept 2021, each day has been no less than a thriller – with only one looming question – whether the deal jinx be finally over, or will we lose it again? I still remember my disappointment over a call, when I was told on 20 March, that the deal wasn’t happening because wine and coal were likely to derail negotiations. The real pressure came from the political leadership when both leaders announced the early conclusion of the deal in the virtual summit, which made sure that the bureaucracy gets its act together and delivers (irrespective of getting exasperated around wine or coal duties – and finding a middle path).?

The past few days have been invigorating for stakeholders in the Australia India space. The reason is the 3-day visit of the Indian Commerce Minister Piyush Goyal to Australia (Melbourne, Sydney, and Perth, 6 April to 8 April) with the largest delegation of 58 business leaders that came together in just 36 hrs. Minister Goyal had organised a similar quick delegation visit to UAE after the announcement of the landmark?Comprehensive Economic Partnership Agreement?(CEPA).

This visit was aimed at mobilising the stakeholders, raise the stakes for everyone and communicate the benefits of the AI ECTA across cities and sectors. The overall message was, that AI ECTA will usher in the next level of growth in Australia India economic ties. Evident from the way the minister in his 3-day trip revised his bilateral trade ambitions from the current $27.5 billion to $45 billion in the next five years to $130 billion by 2030.

Few of the larger messages that I felt came out of his visit across different events, particularly my observations from the Sydney events, and I request stakeholders to share their observations as well, are –

• India doesn’t fear free trade anymore
• Minister Goyal’s utterances categorically reflected the New India, which knows what it wants, is speaking from a position of strength, and is ready to do business with any country where deals are reciprocal, non-discriminatory, and equitable
• His constant pitch was around India’s scale, demographics, growing middle class which can give a fillip to Australian businesses, use it as a manufacturing base, and export it to the World
• India is setting sectoral targets, offering ease of doing business and India’s large diverse states are focused on bringing down the cost of doing business
• Minister Dan Tehan’s reference at the Business Council of Australia luncheon, on how the world was cautiously watching the progress of the AI ECTA. He said he constantly received calls from leaders in the UK and US, who were keen to understand the status of the negotiations
• Minister Goyal shared how Australia needs to connect with India’s aspirational story, good economics makes for good politics
• Newland Global Group’s event with Business NSW and the Minister’s Confederation of Indian Industries (CII) delegation – largely reflected and stressed the need for businesses to have a deeper understanding of India – so building on business literacy and specialised small group engagements across sectors
• Minister Goyal’s visit to temples, his interaction with the diaspora community, and Minister Tehan’s presence all throughout – were a perfect reflection of India Australia Maitri ?(mateship)
• The speed and far-reaching depth of his visit and coverage (politics, economics, and community coming together) reflected that finally there has been a categorical shift towards building a holistic engagement
• Qantas has announced direct flights between Sydney and Bengaluru – which will further deepen innovation & tech engagements - India's tech capital(Silicon Valley) #Bengaluru with #Sydney 2nd highest-ranked city in #AsiaPacific for innovation, home to 50% of all Australian startups
• Both Ministers constantly stressed the geopolitical shifts, the need to increase the resilience of supply chains, and to contribute to the stability of the Indo-Pacific region
• The stress test created by Beijing’s 2020 tariffs and bans has revealed significant facts about the make-up and nature of Australia’s foreign trade, trade coercion led to trade diversion
• Combined GDP among the Quad countries (US, Japan, India, and Australia) sits at a whopping $34 trillion, with all four countries also having the balancing capacity to fulfill each other’s needs and make up for their respective economic weaknesses, for example, India, an energy-dependent economy that needs to constantly upgrade its infrastructure, could rely heavily on subsidised imports from Australia, a commodity-rich economy. This can also be a viable platform for India to test its potential for multilateral economic integration
• An engaging conversation @IABCA Emerging Business Leaders Program, where Minister Goyal stressed the need for the young business leaders to participate and contribute to India’s progress and aspirations, and identify ways to globalise India’s development agenda
• Western Australia at this stage is likely to be at the forefront of Australia India bilateral ties with its focus on deepening engagements across space, tourism, sustainability, research, innovation, technology, critical minerals
• AI ECTA was brought to life with WA mining billionaire Gina Rinehart pressing the button on a $9m investment that could result in a multi-billion-dollar magnetite project in the Yilgarn region shipping high-grade iron ore products to India. Rinehart’s Hancock Prospecting will take a 30 percent stake in the Mt Bevan magnetite project under an agreement with joint venture partners, the Indian Government-controlled Legacy Iron, and junior explorer Hawthorn Resources. Hancock subsidiary Atlas Iron had been appointed as the manager of the joint venture project and would conduct the study. Legacy is 90 percent owned by the Indian Government’s National Mineral Development Corporation

Lighter moments

• Minister Goyal said that in 27 years Cochlear have sold 27,000 implants in India. Cochlear can scale up its operations by setting up a manufacturing facility in India, which will not only reduce the cost of implants but also provide export opportunities from India to other countries, and they can do this without any commitment to technology transfer, as has been insisted by other countries
• The journey of the trade deal negotiations were referenced across sports and Bollywood – with repeated references to Chess, Cricket, Football, Harry Potter, Bollywood hit Chak De, and many others
• Politics is always on the mind of a politician. It was an absolutely hilarious moment when during the IABCA emerging leaders’ event, Minister Goyal said that he had never imagined that he would come to a foreign country and thank Sonia Gandhi.?(Sonia Gandhi is the founder of the IABCA awards, and her namesake Sonia Gandhi leads India's grand old, Congress Party that sits in opposition to the ruling party BJP).
• As a token of gratitude and appreciation, at the Business Council of Australia event Minister Goyal gifted the actual pen he used to sign the trade agreement to Minister Tehan.

Going forward

From PM Scott Morrison Scomosas to chicken curry and to his recent khichdi (PM Narendra Modi’s favourite dish)?– the message is clear that all recipes and ingredients have been tried and tested to ensure that the bilateral relationship is prepared with care and is well nourished.

The past 18 months in bilateral ties have been exciting and actioned packed, perhaps more so than ever before. The constant shuttle between gloom and doom of COVID and the ambitions of government to maximise options and opportunities for producers, manufacturers, and industry sectors has been an interesting lesson in how tough times can become a lever for new promising gains. Better late than never.

Also, there can be no better way to celebrate the completion of my 4 years of living in Australia on 7th April, than by applauding this trade deal that will change the fortunes of this bilateral relationship forever!?

If you have any queries or need more information, please do not hesitate to DM me or email us at - [email protected]