Engagement with Australia | The Financial Express

Engagement with Australia

The bilateral relationship has transformed with remarkable speed in recent years.

trade, economy
The heart of the comprehensive strategic partnership is the Economic Cooperation and Trade Agreement that came into force last December. (IE)

Australia’s prime minister Anthony Albanese kicked off his maiden four-day visit to India in Ahmedabad, watching the first day of the final test match between the two nations. At the stadium, which had big posters “celebrating 75 years of friendship through cricket”, he did a lap of honour with PM Narendra Modi before the match began. Regardless of the state of the pitch, both cricket-loving nations are bolstering a comprehensive strategic partnership; a relationship based on trust and common values. A day before, the Australian premier was at a function that officially announced that Deakin University would be setting up its international branch campus at GIFT City in Gandhinagar. Another Australian educational institution, University of Wollongong, is also gearing up to do the same, the first foreign varsities to establish an offshore presence in India. Equally significant was his announcement that the Australia-India Education Qualification Recognition Mechanism has been finalised. All of this has a crucial bearing on migration pathways for Indian professionals to work Down Under through an annual quota that allows them to enter as contractual service providers entitled to stay for a period of four years and for students who want to study in Australia. As Deakin and Wollongong plan to offer courses in STEM (science, technology, engineering and mathematics), finance and business—courses that Indian students are interested in—they can study for two years at GIFT City and then head to the parent varsities to complete their education.

The heart of the comprehensive strategic partnership is the Economic Cooperation and Trade Agreement that came into force last December. To continue with a cricketing analogy, ECTA was negotiated with the speed of Brett Lee and the perfection of Sachin Tendulkar, to borrow an expression of commerce minister Piyush Goyal. With India benefitting from preferential market access provided by Australia on 100% of its tariff lines and offering preferential access to Australia on over 70% of its tariff lines, the level of ambition is to raise bilateral trade to $45-50 billion by 2033 from $21 billion in the current fiscal till December. The trade balance is in Australia’s favour as the resource-rich nation sells coking and thermal coal and other raw materials to power India’s rapidly growing economy. Negotiating the ECTA has also taken into account India’s sensitivities by keeping out dairy items and offering only limited access in agriculture.From India’s point of view, the ECTA’s most important takeaway is that its yoga instructors, chefs, students, and STEM graduates will have easier access to Australia. Extension of the ETCA to services, especially Mode 4 movement of skilled professionals, is the biggest gain. It bears mention that the extremely limited progress in services trade, especially movement of natural persons, has been a major source of frustration for India in its free trade agreement with the Association of Southeast Asian Nations.

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India’s closer engagement with Australia is a crucial building block of its evolving outreach to the bustling India-Pacific region. Not so long ago, due to its concerns over a Sino-led trading architecture, it walked out of the Regional Comprehensive Economic Partnership. As Australia is also a member of RCEP and Comprehensive and Progressive Agreement for Trans-Pacific Partnership, greater comfort levels with ECTA can serve as a template for rejoining RCEP, besides boosting its confidence in signing similar trade pacts with the UK and EU.

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First published on: 10-03-2023 at 04:30 IST
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