The Australian Government has committed to investing $280 million to boost cooperation with India as part of the Update to the India Economic Strategy to 2035 launched today. The announcement emerged following a virtual meeting last night between Prime Minister Scott Morrison and India’s Prime Minister Narendra Modi.
The investment is somewhat surprising given that last week Minister Tehan had suggested the government was a matter of days away from completing trade negotiations and signing a free trade agreement – the Comprehensive Economic Cooperation Agreement (CECA) – with Australia’s seventh largest trading partner.
There are reports that the agricultural component of the agreement is what is delaying it from being finalised, particularly in relation to meat and dairy imports. India’s milk and dairy industry have opposed the CECA saying that lowering tariffs would lead to the dumping of cheap imported products, and undermine the domestic dairy industry which supports 70 million rural households.
Prime Minister Scott Morrison said, “We’ll redouble our efforts, as I said, on our CECA to unlock new opportunities and benefits for both of our economies. It will bring us closer to a full agreement as soon as I hope we can achieve that.”
While Prime Minister Modi said, “We have made significant progress in our CECA in a very short time. I am very sure that we will reach an agreement very soon on the remaining issues, as well.”
There is no word from Minister Tehan’s office on what exactly the remaining issues are but Shadow Minister for Trade Madeleine King released a statement expressing frustration.
“In September 2021, Trade Minister Dan Tehan gave himself a deadline of Christmas last year for an ‘early harvest’ interim trade deal, to lock in some benefits for both countries sooner rather than later.
“(The) leaders’ meeting was an opportunity to finally ink that deal before the election, albeit three months late. Yet the interim deal was not signed.”
Ms King’s statement says that negotiations have been going on since 2018 when the Australian Government first received the 500 page India Economic Strategy to 2035 report penned by Peter Varghese, a former secretary of the Department of Foreign Affairs and Trade,
She attributes the delay to laziness on the part of the Australian Government in taking up any of the recommendations contained within Mr Varghese’s report which was, she says, ‘intended as a blueprint to boost our economic ties with India and to diversify our trading relationships’.
Last night, the Prime Minister Morrison said that Australia will provide additional investment in the relationship including:
- $16.6 million to strengthen linkages with India’s key policy and finance institutions.
- $8.9 million to support enhanced business engagement and an increased Austrade presence in India.
- $17.2 million to extend the Australia-India Strategic Research Fund to continue supporting a world-class relationship and establish an Australia-India Innovation and Technology Challenge.
- $35.7 million for a Green Steel Partnership, a Critical Minerals Research Partnership, and a contribution to the International Energy Agency to support cooperation on research, production and commercialisation of clean technologies, critical minerals and energy.
- $25.2 million to expand the Australian Space Agency’s International Space Investment initiative to deepen space cooperation with India.
- $28.1 million to launch a Centre for Australia-India Relations to deepen community ties, promote public discussions and policy dialogue, and engage the Indian diaspora.
In 2020, India was Australia’s seventh largest trading partner, with two-way trade valued at $24.3 billion, and sixth largest goods and services export market, valued at $16.9 billion. In 2020, India was Australia’s third largest market for services exports.
In a statement regarding the investment said, Minister Tehan said: “The Government remains committed to the India Economic Strategy and its ambitious goals: to lift India into our top three export markets by 2035, and to make India the third largest destination in Asia for outward Australian investment.
