Amid various media reports that the ‘India Economic Strategy to 2035’ (IES 2035), commissioned by Australian Prime Minister Malcolm Turnbull, was buried without effective implementation, the Australian High Commissioner to India Harinder Sidhu released the strategy report, prepared by former Foreign Secretary of Australia Peter Varghese, in New Delhi on Wednesday.
Speaking to reporters she explained, “There is a process for a government response. It was never intended to be a big splash. There is a very deliberate process in train to publicise it. I will be doing events in India and in Australia through several roadshows – talking about opportunities in India, using the report to draw attention towards India. This will be followed by an official response. The true importance of the report will be displayed with a substantive implementation of the recommendations.”
While the report is prepared “for the government” and not “by the government”, it is primarily aimed at Australians, so they can chart out a course for bringing India into the top tier of Australia’s economic partners and to increase the level of understanding among the business community.
The Strategy charts a course to bringing India into the top tier of Australias economic partners, my remarks on the India Economic Strategy are now online. #IES20135 https://t.co/hARdqjCzGO pic.twitter.com/JXbq2tdLvK
Harinder Sidhu (@AusHCIndia) August 8, 2018
“The short answer is simple: it’s because India matters to Australia. A key conclusion of the strategy is that there is no market over the next 20 years that offers more opportunity to Australia,” said the Australian envoy.
Amitabh Mattoo, who has been the chief executive officer and inaugural director of Australia India Institute and professor of International Relations at the University of Melbourne, in a recent article purported that the reason why Canberra has been reluctant was the China factor.
He argued, “What has gone wrong? Can the report’s recommendations still be rescued from the naysayers in Canberra? By most accounts, it is Varghese’s candour about China that is making Canberra nervous. The report is not about China or its potentially hegemonic designs over the region. It is primarily about economics. But as a former head of the Office of National Assessment, Varghese argues correctly that a long-term economic strategy towards India should rest also on two other critical pillars that support the people-to-people ties and geopolitical congruence.”
One of the major recommendations in keeping with the federal structure of India is to focus on the states of India. The report has zeroed in on ten promising states: Maharashtra, Gujarat, Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, West Bengal, Punjab, Uttar Pradesh and the National Capital Region.
IES 2035 says, “While Australia needs to continue to engage with India as a national economy including on its macro settings, India’s federal structure holds many of the levers that control the investment climate.”
The Australian envoy, however, said that her government was willing to look beyond the ten states in the coming years.
The report also identifies ten sectors where Indian demand and Australian supply can come together — from education, which is a ‘flagship’ sector, to resources, agribusiness, and tourism which are considered ‘lead sectors’. Six more sectors have been identified where there are complementarities between the two economies: infrastructure, health, financial services, sport, and science and innovation.
Making a strong pitch the Australian envoy said “India is not China”, trying to emphasise on the greater need for cooperation in the economic sphere that could benefit both nations.
“Perhaps the most ambitious goal of the strategy is to have Australian investment in India rise to over $A100 billion. Current Australian investment levels in India are valued at $A14 billion, so this goal represents a seven-fold increase,” said Sidhu.
The report also makes a strong case for the need to conclude the economic instruments that could help exploiting each other’s trading potentials.
The reports says, “A high quality Comprehensive Economic Cooperation Agreement (CECA) with India would provide legal certainty for Australian exporters and investors in a market where unpredictable policy changes make doing business difficult. However, our negotiating positions on CECA are too far apart for CECA to be a realistic objective in the near term. Australia should focus instead on securing some of the objectives of a CECA through the Regional Comprehensive Economic Partnership (RCEP) and return to CECA negotiations only once RCEP is concluded.”
Also, keeping the growing stature of India in the region in mind, Australia champions the fight against “protectionism” and a major role for India in the “Indo-Pacific” region.
“We are democracies, we support the rule of law and multilateralism, we champion free and open relations between countries and freedom of action by sovereign states. These are values that are being challenged on many fronts. Our shared objective is to build a future in the Indo-Pacific that is prosperous, stable and secure”, she said.
The India Economic Strategy will work as a guide to build a constructive relationship.
One of the key recommendations from the report has already been considered. Australia will soon be opening a Consulate-General in Kolkata. The Australian government announced intention to do so in this year’s Budget.
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