Article – Aus and India at the FTA table22 January 2015
15 January 2015
North Queensland Register
STRIKING a free trade agreement (FTA) with India is the next big target looming in the Abbott government’s sights, having already signed historic deals with China, Korea and Japan containing strong agricultural gains.
Trade Minister Andrew Robb and Parliamentary Secretary to the Minister for Agriculture Richard Colbeck spearheaded a large trade delegation at the Australian Business Week in India (ABWI) this week, to bolster the FTA’s potential conclusion by the year’s end.
Speaking to Fairfax Media from India, Senator Colbeck said the Indians were impressed by the size of the Australian business delegation of about 450-plus participants.
“We have the biggest trade delegation that’s come to India,” he said.
“The UK thought they had a big delegation with 100 people but ours is 450 (including agricultural representatives) and that’s been reacted to very positively.
“They see it as a signal of us taking the relationship very seriously and they’re responding accordingly.”
Senator Colbeck’s activities during the week-long jaunt include the business summit’s opening ceremony, a seminar on Australian dairy capacity, a workshop on expanding the Indian wine market, an Australian wine tasting session and other trade related meetings.
He said agricultural products and services represented $675 million of the $15 billion two-way trade between Australia and India in 2013-14 which was “not insignificant”.
But there are many opportunities to grow and improve trade with Australia’s fifth-largest export market in areas of strength like wool and cotton, he said.
Senator Colbeck said agricultural services, like genetics or dairy production services and expertise, are areas of potential market expansion where demand will continue to grow in future.
“I was talking to someone last night at the big social event who said there’s only one statistic you need to remember about India and that’s the fact they have 1.3 billion people which pretty much sums it up,” he said.
Senator Colbeck said fine food and wine was a developing market in India while a local dairy herd currently contained two cows.
He said per capita wine consumption in Australia was currently just under 30 litres per person but in India it’s two teaspoons.
India’s daily productivity for a dairy cow is five litres per day compared to 25 litres per day in Australia, which means there is a “huge opportunity to make improvements,” he said.
‘Ready and willing’: Robb
Mr Robb said India was a country of enormous opportunity and Australia had much to offer in supporting its development.
“As Prime Minister Modi said during his visit in November, India sees Australia as a major partner in every area of its national priorities,” he said.
“We are here to show that the Australian government and Australian businesses and institutions are ready and willing to work with India to help its transformation into one of the world’s great economic powers.
“This is a substantial trading relationship but clearly there is scope for significant growth, not only in the more traditional areas of trade such as resources, energy and agriculture, but also across a broad range of services as well as investment.”
“I sat down with Prime Minister Modi earlier this week and I can assure you he’s as committed as I am, to completing a comprehensive bilateral trade agreement between our two countries,” he said.
“This represents exciting export opportunities for Australian producers as India seeks to meet growing demands across a wide range of areas.”
Deal similar to ChAFTA
Senator Colbeck said the Indian market and any subsequent FTA would likely be more similar to China, where opportunities exist to develop new trading options, rather than Japan and Korea, which are more mature markets with a longer trading history.
“There’s real eagerness and some obvious synergies and a lot of opportunity presented here,” he said of the Indian market.
“When you’re talking about that scale of population even a small proportion of that is a big market and that’s well worth considering.
“India is looking to be a bigger economy than the US by 2050 and there’s an awful lot of things we can interact with them on.
“Along with China, India will be one of the two biggest economies in the world by 2050 and a market we really need to be part of.”
Senator Colbeck said the 12-month deadline for concluding the FTA proposed when Indian President Narendra Modi visited Canberra last November was “a significant task and very ambitious.”
But he said there was an acknowledgement both countries had neglected the relationship over the past decade or more which was being replaced by a climate of goodwill.
“The country very much reacts to Prime Minister Modi, so when he said to his country that he wants to do trade with Australia and Australia’s a country India should be doing trade with, that’s completely changed their attitude,” he said.
“The Indians are now acting on the vision and direction put in place by President Modi and the attitude I’ve seen during this visit is that they’re very, very enthusiastic.
“A lot of states and industry are looking at Australia actively for investment and trade.”
Senator Colbeck said a challenge for Australian industry was to try and understand what the Indian market can offer and learn how to advance potential opportunities.
“While Australia may not be the ‘Asian food bowl’, what we have here is a great opportunity to help raise the profile of our products and potentially increase Australia’s market share of this valuable and diverse market,” he said.
Another opportunity: NFF
National Farmers Federation (NFF) President Brent Finlay said the Indian market was currently “limited” for Australian agricultural exports, compared to the three FTA’s signed-off already, with wool, pulses and horticulture mainstays of trade.
But Mr Finlay said India provided another opportunity for Australian agricultural exports due to a rapidly growing economy and population and middle class demographic.
“It’s an important potential market and we’ve got to be there,” he said.
Mr Finlay said opening up and broadening export markets was vital to the Australian economy, creating jobs and returning dollars to the local community.
He said Australian farmers had a keen appreciation of the need to build a strong, long-term relationship that would deliver safe and high-quality produce to India and sustainable, positive outcomes for the agricultural sector.
“We urge the government to continue the good work in strengthening our position in growing markets,” he said.
“We need to make sure that we get agreements that are consistent and solid – agreements that will stick.”
Mr Finlay said as well as FTA’s with Japan, China, Korea and India, concluding the Trans-Pacific Partnership (TPP) agreement was “the next big one huge for Australian agriculture”.
Courtesy of the North Queensland Register