Building links between Australia and the dynamic South of India
Speech (Check Against Delivery)
Confederation of Indian Industry, Hyderabad
7 May 2010
Introduction
Distinguished guests. Ladies and gentlemen.
This is my first visit to Andhra Pradesh, and I’ve been impressed with everything I’ve seen so far - including the Hyderabad Airport where we landed last night.
I am told that Hyderabad Airport is the rated as the best in the India.
As a passenger I enjoyed the modern facilities at the airport and as Australian Trade Minister I know it is a sign of the interest and focus in Hyderabad on the aerospace industry.
Let me say to you Australian companies have great expertise in aerospace technology and this could be a sector of greater cooperation between Australia and India.
One of my main messages today is that while there is already strong links between Australia and Hyderabad, here in the fast-growing South of India, there is potential for much greater links.
It is a great pleasure to have been invited to address the Hyderabad chapter of the Confederation of Indian Industry.
This is also my second opportunity in less than a week to address members of the Confederation. I spoke to the Delhi chapter on at the start of the week.
In Delhi, with the Indian Commerce and Industry Minister Anand Sharma and I released a joint feasibility study on the merits of a Free Trade Agreement between Australia and India.
The study shows a comprehensive WTO-consistent FTA would allow both countries to take maximum advantage of our considerable economic complementarities.
According to independent modelling, a bilateral FTA could deliver handsome economic dividends – over twenty years it would result in an additional A$45.5 (US$32.4 billion) to Australia’s GDP and an additional A$48.3 billion (US$34 billion) to India’s GDP.
The study recommended Australia and India consider negotiating a comprehensive FTA, which is what we are driving towards.
Since the launch of the Feasibility Study, I have been asked many times by the media for a timeline on FTA negotiations. I always reply there is little point in mapping out a timetable for negotiations because that becomes the focus.
While I am pushing for an FTA between Australia and India it is important to maintain a broad approach. There is no sense waiting around for the FTA to be completed and ignore other opportunities.
That is why I am here in Hyderabad in the dynamic South.
It is part of what I call the second track approach to our engagement with India.
It is about getting out and building links with cities, states and region where there is opportunity and growth.
This is a second parallel track of trade engagement that can energise the first track of FTA discussions in New Delhi.
South India
I am aware the Hyderabad region plays such an important role in the Indian economy, particularly in Information and Communications Technology (ICT), pharmaceuticals and agriculture sectors.
The state of Andhra Pradesh has a population of more 80 people and strong economic growth.
Last night I learned a great deal about the growth prospects and policy priorities of Andhra Pradesh from Commerce Minister Kanna Alakshmi Narayana, who graciously hosted a dinner in my honour.
South India is a cornerstone of Australia’s economic partnership with India.
South Indian companies like Infotech are making this partnership stronger including through its growing presence in Australia.
Reflecting the strength of our partnership with the south of India, the Australian Prime Minister announced in November last year that we would expand our consulate presence in Chennai.
This is part of a broader upgrading of Australia’s diplomatic presence in India – part of our commitment to putting the relationship with India at the front rank of our bilateral relationships.
We are also expanding the network of the Australian Trade Commission (Austrade) in India, employing local Indians to promote trade and investment links with Australia.
Today I had the pleasure to officially announce the expansion of Austrade’s Hyderabad office in the Taj Deccan Hotel.
The upgrading of our post in Chennai should be of particular interest to this audience, because it will have responsibility for advancing Australian diplomatic interests throughout South India.
The Australian Government is also advancing the scientific research in India and particularly in Andhra Pradesh.
The Australia-India Strategic Research Fund is a A$100 million joint undertaking between the Australian and Indian governments that supports collaboration in high-end science and research.
This fund is Australia’s single largest research fund for bilateral science collaboration with any country in the world today.
There are nine projects underway in Andhra Pradesh, the highest number for any single Indian state. The total Australian contribution is A$2.8m (or around 10 crore rupees).
The projects include leading edge research in stem cell science and biomedical devices and work that will aid prospecting for offshore gas deposits and potential sites for generating clean energy from geothermal sources.
The projects involve Indian partners like the LV Prasad Eye Institute, the Centre for Cellular and Molecular Biology and the National Geophysical Research Institute and some of Australia’s best universities and research institutes including the University of Melbourne and Deakin University from my home state of Victoria.
This is a concrete example of the Australia Government investing in the future of this state.
There are many examples of Australian companies investing in the future of Andhra Pradesh.
For example Burwell technologies have linked up with Bevcon Wayors in a joint venture for the manufacturing of air pollution control equipment.
In terms of Australian investment we have companies such as GHD, an engineering firm, and SMEC which have set up their South Asia regional headquarters here.
I’ve just come from a meeting with Dr William Dar, the Director General of the International Crops Research Institute for Semi-Arid Tropics, with which the Australian Centre for International Agricultural Research worked closely since 1975.
Engagement with India
Today is my last day in India after five days in your great country as part of my third visit as Trade Minister. I look forward to returning.
One of the main objectives of this week’s visit to India is to flesh out the economic dimensions of the historic Australia-India Strategic Partnership formally agreed by our Prime Ministers in November last year.
During this visit I have emphasised Australia and India have much to offer each other through closer cooperation on high priority policy issues - bilaterally, regionally and multilaterally.
We also have shared interests in maintaining and enhancing the peace, stability and prosperity in Asia.
On the trade front, we are committed to working together to progress negotiations on the Doha Round at the global level.
Regionally, India and Australia are working cooperatively to advance economic integration in the Asia Pacific region.
Second, I’ve made the point that people-to-people ties are proving to be one of the great strengths of our bilateral relationship.
Our respective diasporas – the Australian diaspora in India, and the Indian diaspora in Australia – are growing in size and significance.
Indians are welcome in Australia.
Australia is proud to be playing a key role in meeting the education needs of Indian students.
Around 120,000 of more than 600,000 overseas student enrolments in Australia last year were from India.
Indian students not only contribute to Australia’s vibrant multicultural society, they make life-long friends and professional contacts and acquire invaluable professional skills that will help them later in their careers.
We are committed to offering our international students highest-quality education and the support they need while studying.
In that regard, Australia has moved decisively to address the safety concerns of Indian students and their parents.
We have introduced a wide range of measures over the past nine months to strengthen law enforcement, protect the integrity of Australia’s visa system and reaffirm the quality of our educational institutions.
And third, during this week long visit I’ve underscored the fact that the Australian and Indian economies are highly complementary.
India is Australia’s fastest growing major trading partner.
In 2008-09, the Global Financial Crisis notwithstanding, our two-way trade grew by 55 per cent over the previous year, reaching nearly $22 billion.
Over the past five years our two-way trade has averaged 25 per cent growth.
Opportunities are growing for Australia and India to work in partnership to produce highly competitive and largely complementary goods for export to international markets.
To realise the tremendous potential of our commercial relationship, though, it is critical that we, as governments, get the economic settings right.
That is why my visit program has included a number of opportunities – such as this one - to hear directly from business about your priorities, interests and concerns.
What I’ve been hearing again and again is the importance of improving regulatory environments and eliminating behind the border impediments to trade and investment.
Investment
One area where our economic relationship is underdone is investment.
As I’ve said before, in many ways investment is a crucial new form of trade.
Companies are increasingly targeting the global markets, locating different stages of production and supply chains where ever the business benefits are greatest.
Australian companies have invested $2 billion in India, while Indian companies have invested $850 million in Australia, according to the latest figures.
That represents just a fraction of our respective overseas investment interests, and is something we should be aiming to increase.
This is one area of a vibrant relationship where there is room for great improvement.
Conclusion
Ladies and gentlemen,
I would like to thank the members of the Confederation of Indian Industry for inviting me here today and for the continuing to support the Australia-India economic partnership.
I will leave Hyderabad and India with some lasting impressions.
This leg of my India visit has confirmed my conviction that we are on the right track with our strategy to deepen commercial links with South India.
I have been greatly impressed by the dynamism and potential of this city and this state, and the generosity and entrepreneurial spirit of its people.
There are truly great opportunities for Australia and Australian companies here. We have just started to unearth some of the potential and there is so much more to be realised.
Thank you
ENDS