A look back at India’s shared and deepening partnership with Australia

As India celebrates its 75th anniversary of independence, many world leaders including the Prime Minister of Australia have congratulated Indians living in Australia and other countries.

Many academics and think tanks believe that India is the best opportunity for Western democracies to counter China as a strategic partner and market. Whatever the reality on the ground, the possibility of a secular democracy with a sizable population, ambitious English speakers and a thriving economy has long been glimpsed. Australia contributed significantly to the expansion of the alliance.

India and Australia have a solid and purposeful bilateral relationship. The extent of Australia’s relationship with India has grown with India’s rapid economic and strategic growth, supported by trade and investment.

According to government data, India was Australia’s seventh largest trading partner in 2020, with two-way trade worth $24.3 billion and the sixth largest export market for goods and services, worth $16.9 billion.

Interestingly, education is Australia’s largest service export to India, valued at $6 billion and accounting for about 88 percent of the total in 2020. At the end of 2020, the number of Indian students in Australia stood at 115,137.

A modernizing economy

India’s post-independence economy (1947-1991) stood out for its planned development, strict regulation and protectionism. India began a phase of economic liberalization in 1991 that helped transition to a market economy.

Australia and India are collaborating on groundbreaking research to fight mosquito-borne diseases.

Dr Prasad Paradkar is a @CSIRO scientist working on research to genetically manipulate mosquitoes to prevent them from transmitting diseases such as dengue or zika.#IndiaAt75 @AusHCIndia pic.twitter.com/2Dt1RsrHhs

— DFAT🇦🇺 (@dfat) August 12, 2022

The Indian economy grew at an average annual rate of more than 7 percent over a decade from the late 1990s. India’s GDP has grown seven times since 2000 to $3 trillion. Tens of millions of Indians have been lifted out of poverty since the 1990s. However, the country’s economic progress is still uneven.

In particular, India’s independence marked a turning point in its economic history. According to the International Monetary Fund (IMF), the Indian economy, which is currently the sixth largest in terms of market exchange rates, was valued at $3.04 trillion in 2021. India’s economy is also among the fastest growing in the world, with average annual GDP growth of 5.8 percent over the past 20 years.

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A decade in the making

The inaugural Australia-India Virtual Leaders’ Summit took place on June 4, 2020, in the presence of Prime Minister Scott Morrison and the Honorable Prime Minister of India Narendra Modi. The 2009 Bilateral Strategic Partnership between the two Prime Ministers was upgraded to a Comprehensive Strategic Partnership (CSP) at this meeting.

The Australia-India Chamber of Commerce (AICC) held several activities across Australia in February 2022 to commemorate the 75th anniversary of India’s independence, Australia Day and Indian Republic Day.

Then, in April, India and Australia agreed a temporary free trade agreement that will increase bilateral trade to $50 billion in five years, while lowering restrictions on the movement of people and tariffs on several Australian goods. The Economic Cooperation and Trade Agreement (ECTA) was signed by Australia’s Prime Minister Scott Morrison and India’s Prime Minister Narendra Modi.

More than 6,000 Indian industries will be granted duty-free entry, including those producing textiles, leather, furniture, jewelry and machinery. The Australian government is working to diversify its export markets and reduce Australia’s dependence on China, its main trading partner. Both have taken part in several diplomatic clashes that have resulted in Beijing banning certain Australian goods.

The deal with India cuts taxes on more than 85 percent of Australia’s commodities shipped to India, worth $12.6 billion. In 10 years, that percentage will rise to more than 91 percent, worth $13.4 billion. The deal would open up huge prospects for trade diversification for Australian producers and service providers exporting to India, Prime Minister Scott Morrison said.

The Australian government has also launched the Australia India Commercial Exchange Program (AIBX) to encourage more business partnerships between Australia and India. From industry-specific insights to advice on doing business with India and breaking into the online retail market in India, AIBX offers a variety of services to help Australian businesses enter and establish themselves in India.

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More information can be found on the Austrade website.

India-Australia ECTA

In a recent interview, Indian Trade and Industry Minister Piyush Goyal said that the Economic Cooperation and Trade Agreement (ECTA) between India and Australia would create about 10 lakh jobs over the next four to five years.

The recently signed trade deal with Australia is expected to increase bilateral trade from $27 billion to $45-50 billion over the next five years. The government of India expects to create a million jobs during that time. The India-Australia Economic Cooperation and Trade Agreement (ECTA) was signed by both countries on April 2.

ECTA is India’s first trade deal with a developed country in more than a decade and provides an institutional mechanism to improve trade between the two countries.

Meet the new generation of the Indian diaspora

The Australian-Indian diaspora is to be used and used as a national economic asset. The Indian government is making a significant effort to engage this diaspora. This also applies to the Australian government.

The future productivity and resilience of Australian business will be enhanced by leveraging the entrepreneurial spirit of this fast-growing group, in particular its willingness to experiment and take risks, as well as its familiarity with the Indian market. Between 2006 and 2016, there was a surge in migration from India to Australia, more than doubling the population of Indian descent.

The professional Indian diaspora in Australia has not yet reached the same level of influence in the higher echelons of state and federal politics, academia and business as the diasporas in the United States, United Kingdom, Canada and Singapore. Their presence in key economic sectors and the establishment of vibrant business groups have especially contributed to the development of trust and understanding needed to increase trade and investment with India.

They establish links with state governments and industry associations and provide insight into India’s business practices, cultural landscape and linguistic diversity. They are calling for more regular visits, delegations and conferences between government and business, and are urging their governments to strengthen commercial and political ties with India. In addition, their diverse perspectives support the adoption of new procedures and technology.

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Investing in India-Australia partnership

The Indian diaspora in Australia exhibits the same entrepreneurial spirit that can be seen everywhere. Businesses owned by Australians born in India increased by 72 percent between 2006 and 2011, compared to a 40 percent increase for those born in China. In addition, the transport, postal and warehousing sector saw the largest increase in Indian diaspora entrepreneurship between 2006 and 2016.

Like Chinese students, Indian students make up 15 percent of the second largest international cohort at Australian universities (34 percent). Since 2014, there has been a sharp increase in the number of Indian international students enrolling in postgraduate programs at Australian universities.

But among Indian students, masters through courses is by far the most popular option (70 percent), followed by bachelors (22 percent), and it has been growing rapidly since 2014. In Australia, only 2 percent of Indian students seek a PhD. degrees.

India was one of the top three countries from which Australian academics were recruited between 1993 and 2013 (the other two being the United Kingdom and China). International students made up 30 percent of all postdoctoral researchers in 2014; this percentage was higher in the STEM areas of engineering (54.2 percent), information technology (51.5 percent), agriculture and environment (45.6 percent) and natural and natural sciences (45.7 percent). (36 percent).

The ECTA agreement between India and Australia has undeniably provided some sort of roadmap for successful cooperation with India in the current international environment, and its relevance should be evaluated in that context.

There may be more of these talks, and it remains to be seen how effectively relations between the two countries will develop in light of their shared potential and principles.

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