Sarah Kirlew, the Australian Consul General for South India is not new to India. She worked in Delhi between 2008 and 2011. Since then, she has worked on and off on Indo-Australias relationship and feels very satisfying to see the pace of growth. She worked on the India-Australia trade deal (ECTA) that was recently commissioned and happy that years of hard work have been realised.
The Australian Prime Minister is proposed to visit India, twice this year. Along with enhanced relation, her offices will be super busy. IE had an interesting conversation with her, that ranged across topics as diverse as the Indo-Australian ties. An excerpt from the interview:
Investment opportunities between India and Australia
The recently commissioned Economic Trade Agreement (ECTA) has many features that would benefit flow of goods and services between the two nations. This will promote trade and investment. Currently two-way investment between Australia and India is about USD 48 billion. Our largest two-way investment relationship with the United States is close to a trillion USD. There is a large gap which highlights the potential for growth.
This Free Trade Agreement(FTA) is a strategic signal to propel investments as it highlights that the Australian government is keen about the Indian market. This will encourage businesses to start exploring here. We are currently working at creating awareness through programmes like the Australia India Business Exchange. Similar efforts are being done by Ministry of Commerce and am sure with such events, investments will start to flow.
Even otherwise there are other drivers to invest in India. Factors like covid, Russia’s unjustified invasion of Ukraine, semiconductor shortages have pressured the supply chain. This trade agreement will facilitate availability of more goods at a better price for Australian businesses.
In which sectors can we expect investments?
Australian Government endorsed, An India Economic Strategy to 2035: Navigating from Potential to Delivery in 2018. This strategy sets out a road map to help transform the relation with India. This report was updated in 2021, setting out a plan to steer the engagement over the next five years.
The report has set a target of USD 45 billion export to India and USD 100 billion investments in India.
Australia has a compulsory superannuation scheme. The funds in this alone is around USD 2 trillion. The fund managers are looking for long term investments with stable and steady returns like the established infrastructure of toll roads, airports, in India…
The next focus area would be education. As India reforms the way in which foreign universities can operate here, education ties will improve. Similarly, investments in financial and technology sector like the GIFT city are some prospects.
With this FTA, critical minerals from Australia will enter India tariff free. Several Indian investors have evinced interest to access these. Similarly, Australia has agreed to make changes to the double taxation avoidance agreement, which will benefit Indian IT firms. We are also keen to have investment coming into our startup sector. There are already several small companies that have been setup in Australia that focus on servicing the Indian diaspora. With their growing strength, I am sure more such companies would come up.
The Indian diaspora
Australia is highly multi-cultural with one-quarter of Australians, born abroad. Half of us have a parent that was born abroad. The Indian diaspora is recognised as a national asset. We have about a million people in Australia who claim Indian ancestry. About seven lakh of them were born in India and have their second or third generations continuing there. Indians are growing extremely fast, about 50 per cent in the past five years. Within a few years they will be one of the largest communities.
The diaspora is very young and disproportionately well-educated and have greater earnings than the general population. They mostly work in skilled sectors that include ICT, health, human resources, marketing and STEM. It is a very influential community. Our Assistant Minister for Foreign Affairs, Tim Watts who visited India last year said that, in his electorate, one in ten voters were of Indian origin.
Green Energy
As a country, we recognise and accept that climate change is having devastating impacts. Australia faced a series of disasters. We have strong national commitment, including legislative commitments to address it. Green economy is increasingly important to Australia and it makes sense that our two countries work together on the new energy economy. Currently, we have partnerships to work on green steel and green hydrogen.
This ECTA facilitates duty free entry of LNG, a clean fuel option. Presently our LNG comes into Kochi only but we would like to see it come in through other ports too. Also, the critical minerals from Australia will play a major role in development of green technologies.
In December 2022, I was part of the team that launched the Australia-India Centre for Energy. It is a virtual hub that aims to promote collaboration among universities, research institutes and industry from both countries in the energy domain. IIT Madras and Deakin University in Australia are taking the lead in coordinating and driving this engagement. I am sure that a whole lot of different and bright people would work on cutting edge energy research.
But I think, we have to be rational that coal will be an important part of India’s energy mix. Through the ECTA, coal will come in duty free, and at present, will aid in present power generation needs.
A brief about the India Economic Strategy
It was launched in 2018 and was updated later in 2022. The tagline of the report was: navigating from potential to delivery. There are only certain things that governments can do to encourage business – like lowering tariff, trade facilitation, easing regulations, etc. But ultimately businesses have to seize the opportunity and sometimes they need little help with it. To facilitate this, the report will help Australian businesses to familiarise with the Indian market.
The report also has a list of commitments for the government as well, like opening more consulates and suggestion of different sectors to focus on.
The report talks about space collaboration. Australia and India have, both civil and commercial space industries. India has a very well-developed national space program, but only recently it was deregulated. On the other hand Australia is just growing in the space industry. At this stage we offer some benefit in terms of technology in geospatial mapping, use of satellites, etc.
Another area is digital health. In terms of population, Australia is quiet the opposite to India. But we face the same problems related to health – insufficient medical support to all areas. Through this collaboration we could focus on solutions that would help to deliver health care services remotely. Another area that I think the two countries work well together is on the aspect of education delivery.
Focus South India
We are planning to open a new Consulate in Bengaluru. This will double the resources for South India, as we see so much of growth coming from this region. A centre of excellence for cyber and critical technology would also come up in Bengaluru. The tech sector evolves too quickly than governments can regulate it. This centre will harness the knowledge of the academics and business about emerging challenges and feed that to the government early enough, so that they can think and sort it out.
Both our countries have a commonwealth heritage, so the bureaucracies are structured in a very similar way. We use similar common law systems and this enables to learn from each other on ways to regulate and tackle challenges.
Enabling Social Ties
In Australia we will be establishing a Centre for Australia-India Relations, a USD 24.1 million national platform to foster ties. To engage people of both nations, we have the Australia India Youth Dialogue. This brings young leaders from the two countries together for quite an intensive program.
Over USD 20 million will be offered for the Maitri (friendship) scholars, grants and fellowships programs and cultural partnership.
Co-operation on Research
The Australia strategic research fund has been running for 15 years and it’s our largest bilateral research fund with another country. It is a collaboration between our science ministry and the Department of Science and Technology here. We have recently announced call for grants for researchers up to a million dollars. 21 of those grants have been given across Tamil Nadu alone. This will focus on basic primary research or research into specific areas.
Australia has been a very reliable supplier of resources for Asian economies to grow. The world hopes Asian countries keep growing both to lift people out of poverty and also because the whole world will be better off. ECTA with India is of high quality. Similarly, we have FTAs with several of the Southeast Asian economies, individually. This is an exciting time for both our nations.
