India’s services unlock trading opportunity for Australia - Truss

A new report from the Department of Foreign Affairs and Trade’s Economic Analytical Unit highlights the breadth of opportunities India’s rapid economic growth could open for Australian companies, the Australian Government Minister for Trade, Warren Truss, said today.

Mr Truss, who returned last week from leading a successful business mission to India, launched the report at a function for business co-hosted by the City of Melbourne at the Melbourne Town Hall.

The report, India’s Services Sector – Unlocking Opportunity explores the role of India’s booming services exports in driving the country’s economic development.

“The impact of India’s economic growth on the world economy could be huge,” Mr Truss said. “The advantage of this for Australia is India’s growth will result in huge demand for many of the things Australia is best at producing.”

Mr Truss noted that forecasters such as Goldman Sachs and Pricewaterhouse Coopers had suggested that with the right policy settings, India could emerge as the world’s second largest economy in purchasing power parity terms by 2050.

Australia’s trade with India has been growing dramatically in recent years. Goods and services exports to India of nearly $10 billion in 2006 made it our seventh-largest export market, eclipsing the United Kingdom for the first time.

“There can be few better examples of how trading relationships benefit both parties, with Australia’s exports to India of gold, coal, and education services being key inputs for Indian industry.

“Australian educational institutions are helping to provide the skills for India’s development and to build personal affinities that will ensure we have close, friendly and productive relations into the future.” Nearly 40,000 Indian students enrolled in Australian institutions in 2006, an increase of almost 42 per cent on the previous year.

The Economic Analytical Unit’s report is cautious about the prospects of India fulfilling the expectations of the forecasters, given the huge challenges of achieving reform in such a large and complex democracy. However, it stresses the optimism and confidence currently prevalent in India.

“That optimism, which I also found everywhere I went in India, will be vital to India’s chances of success. It underpins the can-do attitude which will be crucial to India achieving its goals,” Mr Truss said.

The report may be ordered through the Economic Analytical Unit’s website, www.dfat.gov.au/eau

Media Inquiries: Minister Truss' office 02 6277 7420 - Departmental Media Liaison 02 6261 1555