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08/08/2018
On 2 August, I was delighted to speak at an event organised by CEDA in Sydney on a recently released report the Prime Minister commissioned me to produce on an economic strategy for Australia and India out to 2035.
The report – An India Economic Strategy to 2035: Navigating from potential to delivery – is the most detailed analysis so far of the complementarities of our two economies over the next two decades. It is the result of a year’s work, 232 consultations, public submissions and international engagement. It charts a course to a deeper economic partnership between Australia and India: indeed to bring India into the first tier of Australia’s economic partners.
The report sets out a strategy built on three pillars: economic partnership, strategic congruence and people to people ties. These three pillars offer a future of converging interests. Our thinking on the merits of an open economy is aligning. We are building common ground on the geopolitics of the Indo Pacific. And our communities are getting to know each other better, not least through the rapid increase in the Indian diaspora in Australia, now 700,000 strong.
The report makes the case for a strategic investment in the relationship led at the highest levels of the Australian Government.
The core of the economic strategy is “sectors and states”.
As the Indian economy grows, the scope for partnership will only expand. It is already the third largest economy in the world (in PPP terms), and the report assumes six-eight per cent growth each year for the next 20 years. The report is built around India’s needs and priorities identifying 10 sectors where Indian demand and Australian supply can come into better balance. These in turn are divided into a flagship sector (education), three lead sectors (agribusiness, resources and tourism) and six promising sectors (energy, health care, financial services, infrastructure, sport, science and innovation).
Education is so much more than increasing the number of Indian students coming to Australia. It also signals engagement, collaboration, a responsiveness to the priorities of India and a bridge between our two communities. Australia’s education relationship with India needs to focus on a message of quality, on postgraduate and research collaboration, on science and innovation, on forging partnerships to deliver cost effective vocational education in India and partnering with India in the digital delivery of education. The last will be crucial if India is to meet its ambitious target of upskilling 400 million Indians.
The focus on states reflects the reality that India is best seen not as a single economy but as an aggregation of very different state economies, each growing at different rates, driven by different strengths, led in different ways and likely to continue to be uneven in their progress.
Competitive federalism is becoming a larger part of the underlying dynamic of the Indian economy. It is encouraged by the centre and is being enthusiastically embraced by the states, especially those six states which produce 75 per cent of India’s exports.
The report places a high priority on boosting Australian investment in India. In virtually all of Australia’s relationships in Asia, investment lags trade by a wide margin. India holds out the prospect of being different. It has a relatively open foreign investment regime. It has the rule of law. Its institutions are familiar to Australians, both derived from British models, and English is widely spoken – a very significant asset.
The Indian diaspora in Australia is given particular attention because it may over time prove to be the most significant asset of all.
India is currently Australia’s largest source of skilled migrants, its second largest source of international students and a substantial proportion of those who come to Australia under temporary visas to fill skilled positions that Australians cannot.
This diaspora will have a big role to play in the partnership of the future. They create personal links, in business, the arts, education, and civil society which can help anchor the relationship.
The truth is that – at a community level – neither of us know much about the other. Images of Australia in India tend to be sketchy, shaped by cricket, historical connections and sporadic coverage in the Indian media. Similarly, in Australia, there is very little understanding of contemporary India in the wider community.
Australians, for the most part, have only a partial glimpse of India’s diversity, its sophistication and of the scale of its prospects.
The India Economic Strategy is for the most part a strategy about Australia in India. For the partnership to be complete however there also needs to be a strategy for India in Australia and I am pleased that the Indian Commerce and Industry Minister recently indicated that the Indian Government would seek to carry out a complementary study.
The logic of a sustained strategic investment by Australia in the relationship with India is compelling. If we get it right, we will both enhance the prosperity and security of Australians and help realise India’s aspirations.
The report – An India Economic Strategy to 2035: Navigating from potential to delivery – is the most detailed analysis so far of the complementarities of our two economies over the next two decades. It is the result of a year’s work, 232 consultations, public submissions and international engagement. It charts a course to a deeper economic partnership between Australia and India: indeed to bring India into the first tier of Australia’s economic partners.
The report sets out a strategy built on three pillars: economic partnership, strategic congruence and people to people ties. These three pillars offer a future of converging interests. Our thinking on the merits of an open economy is aligning. We are building common ground on the geopolitics of the Indo Pacific. And our communities are getting to know each other better, not least through the rapid increase in the Indian diaspora in Australia, now 700,000 strong.
The report makes the case for a strategic investment in the relationship led at the highest levels of the Australian Government.
The core of the economic strategy is “sectors and states”.
As the Indian economy grows, the scope for partnership will only expand. It is already the third largest economy in the world (in PPP terms), and the report assumes six-eight per cent growth each year for the next 20 years. The report is built around India’s needs and priorities identifying 10 sectors where Indian demand and Australian supply can come into better balance. These in turn are divided into a flagship sector (education), three lead sectors (agribusiness, resources and tourism) and six promising sectors (energy, health care, financial services, infrastructure, sport, science and innovation).
Education is so much more than increasing the number of Indian students coming to Australia. It also signals engagement, collaboration, a responsiveness to the priorities of India and a bridge between our two communities. Australia’s education relationship with India needs to focus on a message of quality, on postgraduate and research collaboration, on science and innovation, on forging partnerships to deliver cost effective vocational education in India and partnering with India in the digital delivery of education. The last will be crucial if India is to meet its ambitious target of upskilling 400 million Indians.
The focus on states reflects the reality that India is best seen not as a single economy but as an aggregation of very different state economies, each growing at different rates, driven by different strengths, led in different ways and likely to continue to be uneven in their progress.
Competitive federalism is becoming a larger part of the underlying dynamic of the Indian economy. It is encouraged by the centre and is being enthusiastically embraced by the states, especially those six states which produce 75 per cent of India’s exports.
The report places a high priority on boosting Australian investment in India. In virtually all of Australia’s relationships in Asia, investment lags trade by a wide margin. India holds out the prospect of being different. It has a relatively open foreign investment regime. It has the rule of law. Its institutions are familiar to Australians, both derived from British models, and English is widely spoken – a very significant asset.
The Indian diaspora in Australia is given particular attention because it may over time prove to be the most significant asset of all.
India is currently Australia’s largest source of skilled migrants, its second largest source of international students and a substantial proportion of those who come to Australia under temporary visas to fill skilled positions that Australians cannot.
This diaspora will have a big role to play in the partnership of the future. They create personal links, in business, the arts, education, and civil society which can help anchor the relationship.
The truth is that – at a community level – neither of us know much about the other. Images of Australia in India tend to be sketchy, shaped by cricket, historical connections and sporadic coverage in the Indian media. Similarly, in Australia, there is very little understanding of contemporary India in the wider community.
Australians, for the most part, have only a partial glimpse of India’s diversity, its sophistication and of the scale of its prospects.
The India Economic Strategy is for the most part a strategy about Australia in India. For the partnership to be complete however there also needs to be a strategy for India in Australia and I am pleased that the Indian Commerce and Industry Minister recently indicated that the Indian Government would seek to carry out a complementary study.
The logic of a sustained strategic investment by Australia in the relationship with India is compelling. If we get it right, we will both enhance the prosperity and security of Australians and help realise India’s aspirations.