Because it is in their interest to do so. India is the world's fastest-growing democracy, with a population of 1.1 billion.
Sujatha Singh talks to The Diplomat about opportunities for Australian businesses in India
Why should Australian businesses be looking to do more with India?
Because it is in their interest to do so. India is the world’s fastest-growing democracy, with a population of 1.1 billion. In 2008, the size of the Indian economy crossed US$1 trillion, making it the 12th largest in the world. At purchasing power parity, it is the third-largest economy, one of the ‘motor economies’ powering global growth. India is set to continue growing at high rates well into the future, offering significant opportunities for trade and investment.
India’s developmental needs and continued economic growth imply a sustained demand for resources, technology and services, all of which Australian businesses are well placed to deliver. Australian business should therefore be looking to do more with India, as they indeed have been doing over the past few years.
How important is foreign investment to India’s economic growth?
India’s economic growth is primarily driven by domestic demand, which continues to grow strongly. Gross foreign investment constituted 8.2 per cent of our GDP in 2007-08 and is playing an important role in our economy in several areas, including services, telecommunications, energy, automobiles and housing. We particularly look to foreign investment in infrastructure and in gaining access to advanced technologies.
What are the biggest issues facing India and how can Australian businesses get involved there?
Infrastructure, energy, education, healthcare and employment are some of the issues that we have to address in our developmental efforts. Australian companies are well placed to avail [themselves] of opportunities in areas such as natural resources and mining, energy, infrastructure, food processing and supply chain management, renewable energy, and biotechnology. Several Australian companies are already operating in India and their presence has been expanding.
In education, Australia has emerged as the second-largest destination for Indian students after the USA, attracting about 88,000 Indian students in 2008.
How do you view current relations between the two countries?
We stand at an exciting juncture in the development of bilateral relations. Both countries are at the epicentre of the new economic forces shaping the world, particularly in the Asia-Pacific region. India is one of Australia’s fastest-growing export markets, and its sixth-largest export destination. Relations are growing across the board, in all areas. There have been several important ministerial exchanges in 2008, including at the Foreign and Commerce Ministers levels.
It was Foreign Minister Stephen Smith who noted last year that Perth is closer to Chennai than Sydney is to Seoul, Tokyo or Shanghai. Both countries have agreed to take the level of relations to a strategic partnership and are working towards that.
What mutual advantages would a Free Trade Agreement bring?
A bilateral Free Trade Agreement would contribute further to our growing trade and economic engagement and encourage our businessmen to look more closely at the business opportunities that exist. While trade and investment between India and Australia are already doing well, particularly due to the demand for Australian resources and services in India, an FTA would help diversify our trading basket.
Climate change has been identified as a point of difference between India and Australia. How is India placed to tackle climate change and are there opportunities for Australia and Australian businesses there?
India, like Australia, attaches importance to the issue of climate change. Our people want higher standards of living, but they also want clean water to drink, fresh air to breathe and a green earth to walk on. It is estimated that India is already spending about 2.5 per cent of its GDP on adaptation to climate change; this percentage will go up significantly in coming years.
There are opportunities for Australia and Australian businesses in all these areas. Our two countries are already working together in some of these areas in the framework of the Asia-Pacific Partnership on Climate and Clean Development and our cooperation in science and technology.
What will be the major issues in the upcoming general election? If there is a change of government, will there also be a change of attitude towards Australia and the trade/investment opportunities for Australian businesses in India?
In my view, it would be economic issues such as development, housing and education that would be the main concerns. It is always difficult to predict the results of an election, especially in the largest democracy in the world.
India and Australia are both mature, well-established democracies. Bilateral relations have continued to grow under different governments in India and Australia. I have no doubt that whatever the outcome of the elections, we will see continued growth in our bilateral relations, on all fronts.