Asia Society, Mumbai
Simon Birmingham: It’s a pleasure to once again address the Asia Society and to do so here in India from Mumbai with such a distinguished audience here. Can I acknowledge our Consul-General, so thank you very much for co-hosting this event. And can I also acknowledge and identify that in the room is the incoming new Australian High Commissioner to India, Barry O'Farrell, who is from Australia in New South Wales. So welcome.
I am confident you will do an exceptional job in continuing to further the Australia-India relationship. I acknowledge my friend and ministerial colleague from the Government of New South Wales in Australia, the Minister for Jobs, Tourism and Investment Business, Stuart Ayres – thank you for being here. And indeed, many other members of the delegation that I bring here as a part of the Australia-India Business Exchange, but importantly our many Indian friends who are gathered in the room today, our friends and our partners in what is such a valuable relationship.
I am indeed here leading a trade mission that includes some of Australia’s most vibrant businesses – all keen to build new links, new opportunities, and build upon existing wonderful relation between Australia and India.
To engage much more closely within this critical and exciting market that is Indian today.
If any of you are in any doubt about the enthusiasm that exists, just have a chat to any one of the 130 or so businesses and education representatives of Australia who are currently expanding out right across the country at present – around six different cities and engaging very much with their Indian counterparts, as you can see that deepens are already strong ties.
Previously we had run the Australia-India Business Forum – that was a week long focus. The Australia-India Business Exchange is the start of a six-month engagement that we’re going to continue to fuel across education, tourism, energy and resources, premium foods, infrastructure and investment. It recognises that our relationship is not something we can dip in and out of, but in fact is an ongoing relationship.
And there definitely is much going on and much enthusiasm really exists on both sides of the ledger. What I’ve been struck by in my time here this week is the enthusiasm, not just for the Australian visitors and businesses to engage with India, but of our Indian counterparts’ and their engagement with Australians – whether that is with Tata who was with this morning, with Mahindra who I will be with later today or of course a raft of other smaller hard working Asian suppliers, vendors and those who actually of course provide the reach out across the vast Indian technological landscape.
We see those links from everything, from the foundations of our earth to fuel our agribusiness sector, through to the horizons in space in terms of the opportunity in aerospace and beyond. With so many cross-cutting interests, what Australia and India offer each other really is economic depth and huge potentially for us to keep helping each other as India continues to grow. So, as India is growing it’s not only great for India, it is also important for Australia.
But we do this indeed at a time of global shocks and the shocks hit economies too face from time to time. The coronavirus outbreak, or the COVID-19, is inflicting pain on the global economy right now, in addition to of course terrible human cost and public health challenge. From an Australian perspective the near cessation in the movement of people out of China is having profound impacts on parts of our education and tourism sectors. A crash in the Chinese consumption is flowing through into numerous premium agricultural products. Disruption to the supply chain is impacting parts of our resources trade and increasingly, many other parts of economic activity in Australia and indeed, those disruptions, especially to supply chains, having impacts globally including here in India and increasingly in the areas such electronics and pharmaceuticals.
At times like these, in times of global challenges and disruption, it’s imperative that we don’t lose sight of the economic policies that have delivered the world far greater economic growth and therefore human prosperity in recent decades. It’s always tempting for some to suggest that at times of a threat such as COVID-19, nations should look inwards. But it is through looking outwards, particularly by supporting global markets and international trade, that the world has lifted hundreds of millions of people out of poverty and provided the opportunity for longer, better lives that comes with that.
Modern Australia is a nation that is consistent when it comes to supporting those policies of looking outwards and embracing open trade and markets. We know, as a medium-sized economy and an island nation with long distances to many of our markets that the overwhelming characteristic that supports our economic growth and our vibrant Australian society is to have an open and stable international environment. One in which we can predictably make our way in which the rules that grow are well understood and all players, big and small, work fairly to support international growth.
As we all know we’re living through challenging times, not just the coronavirus but in terms of the global economy. Challenges also rich and laden with opportunity – rapid technological transformation, global power realignment, climate change, challenges to existing financial or economic architecture, slower than hoped for growth in cases – these are all real 21st Century challenges which we must all continue to adapt as well.
The region in which many of these changes are happening fastest is, of course, our own vibrant Indo-Pacific region, an economic and geostrategic framework that is shared by Prime Minister’s Modi and Morrison.
In November, I spoke to the Australia India Business Council where I considered a huge change that had taken place in our two countries since the 1980’s and the potential for even more significant growth in the years ahead. Though our economic ties- though our economic ties, they have been somewhat underdone over the years, its safe to say.
Australia India, with open agreements, we’ve begun to make up for the lost time. Our two-way trade, pleasingly, has doubled in the last five years. So too, has our two-way investment flows. Our economies are more complementary than they are competitive. Australian resources fuel India’s need in [indistinct] to expand its manufacturing base. Our education services deliver the fuel to expand the industries like the technology sector. Our investment is delivering India more modern infrastructure. And as India’s consumer base continues to grow, our premium producers of food, wine and wellness products are all well placed to meet India’s growing demands. Equally, India’s manufacturing, India’s technology and India’s investment are crucial inputs to Australia’s ongoing success.
But the change and transformation taking place across the Indo-Pacific is far broader than any two countries – far broader than Australia and India, even far broader than the United States and China. That’s why Australia engages so strongly on international trade and investment issues right across the world, and particularly within our region. It is why we pursued and have delivered on the Trans Pacific Partnership. It’s why we continue to participate in the Regional Comprehensive Economic Partnership and it’s why we are engaged in numerous bilateral agreements or, of course, amongst the world’s most active participants in the World Trade Organization.
These frameworks of international collaboration and cooperation in trade are central to two pillars that Australia holds dear when it comes to the trade landscape – openness and rules. Openness reduces costs by allowing the most efficient distribution of resources. Openness encourages competition that fuels innovation and productivity. Openness fosters integration that enhances understanding between nations and peoples.
Rules give stability which in turn enhances confidence to drive investment. Rules can facilitate development by accommodating countries with different needs or capabilities. Rules protect the weak from the mighty who may otherwise abuse their market power.
Our urging to all nations is to support both openness and rules. That is why we urge countries to help to modernise the WTO in its functions – to embrace rules that eliminate or reduce distortionary behaviour, and to pursue greater openness in their dealings with one another.
Not everyone, not even great friends and partners like Australia and India, will easily agree to the same rules or the same degree of economic openness. But we should stand firm in the face of coercive behaviour in all of its forms and we should continue to embrace openness amongst each other – especially where we are confident of the fair approach brought by each other.
We respect India’s current decision that the time is not right for it to join RCEP – that decision is India’s right to make. Of course it would be a better, stronger regional arrangement with India in it, which is why we will continue to encourage participation, as do all RCEP parties, to maintain the dialogue to invite India to do so.
So whether India is in RCEP or not, Australia will continue to work with India to deepen our economic ties, just as our India Economic Strategy envisioned. Through RCEP negotiations, Australia and India came a long way towards concluding an agreement between each other. Although sensitive issues remained unresolved, we were certainly much closer together than India reached in those RCEP negotiations with some other countries.
I hope that the progress made during our RCEP negotiations does not go to waste and I’m encouraged that my Indian counterpart appears to share this hope. We will continue to talk, to see what is possible to bring down some of the government imposed trade barriers between our countries, whether via RCEP or by some other means in the future.
With all the challenges of running a highly diverse economy over such a vast terrestrial territory, driven by Prime Minister Modi’s vision of a $5 trillion economy, we know there are many complex and challenging issues at play here. But we believe that by opening up and reforming our economy, by sticking together on the slow and methodical work of building our economies together and of strengthening the international system through fora such as the WTO, we can make a significant contribution together, to building or indeed, in rebuilding global confidence.
Now without a scintilla of criticism of our shared much love of the sport, Australia and India is so much more than just cricket, or a government to government trade deals as well. Australia recognises that our relations go much further than governments or sport through commissioning the independent report into our economic relationship. The India Economic Strategy is a document that is every bit as ambitious for our bilateral economic and social ties and links, as Prime Minister Modi’s ambition for India itself.
Our AIB-X business mission here, is part of our attempt to radically lift Australia’s India literacy as move to dramatically increase trade and investment ties between our two countries. As proud as we are of our education and tourism sectors – sectors of the Australian economy that Indians know very well indeed – we can’t rest on those laurels, not if we want to be competitive as India grows and changes. The India Economic Strategy was ambitious in its goal of lifting Australian investment in India from $15 billion in 2018 to $100 billion by 2035. Now, while my Government hasn’t made that explicit commitment, we are firmly dedicated to substantially increasing investment and realising the objectives behind that recommendation.
This is ambitious, but not overly so when you consider that Australia now has one of the largest pools of managed funds in the world. And India has been making some great strides under Prime Minister Modi’s leadership, to encouraging investment by making its regulatory system clearer. We have already seen the US$1 billion investment by Australian Super into India’s National Infrastructure Investment Fund. On top of this, many other Australian superannuation funds are looking at opportunities and diversifying into India. And we continue to encourage their consideration of those goals and to pursue them, where they stack up.
The India Strategy identifies 10 priority sectors within the Indian economy, not least of which is energy and resources as India continues to undergo such social and economic dramatic transformations. As we’ve made clear, we understand that India has to be understood, in many ways as a collection of powerful and vast regional economies, as much as it is a national entity. Western Australia’s development of a sister-state relationship with Andhra Pradesh is an example that springs quickly to mind, as does my own home state’s South Australia’s ties with Rajasthan. But they are far from their own. These are vast states and many of our businesses identify the opportunity to target their relations in India and to your states and communities within.
Australia’s importance is conversely recognised by India. The Modi Government has commissioned an Australia Economic Strategy to complement and respond to our own efforts to dramatically deepen our bilateral ties. Both sides are recognising our common ground in meetings at ministerial and prime ministerial level over recent years. We genuinely believe there is much we can do together to strengthen our region and the world.
Notwithstanding India’s reservations about RCEP, we believe there is substantial room for us to work together to promote stronger economic links across the Indo-Pacific that will benefit both our countries and the region as whole. Australia will continue, with our values and lessons learned over the years, continue to advocate for trade liberalisation where we can agree. Even accepting that that is a challenging environment in some domestic constituencies here in India, and acknowledging the fact that we will disagree from time to time.
But in the broad, in security, in a common need for a strong and predictable global economic background, in other fields like science and technology, in our common goals for education – Australian and Indian interests run very much side by side.
The Australia-India relationship is one of enormous potential. It is one that stretches back a long way; it has come so very far. We have increased potential over so much in recent times, but there is so much more that we can still do. As India continues its extraordinary transformation of its economy and for then so many new opportunities with people in doing so, Australia stands firm as a partner, wanting to help and play a role in that growth, knowing that if we look to the future, the strength of India, the strength of our relationship, bodes well for the strength of our region and our collaboration for many years to come.
Thank you very much for the chance to be with you today and I look forward to an engaging Q and A session with you.
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