Context

The challenge for India and Australia is to transform people-to-people ties into a trade relationship.

People-to-people the two countries

• Soft power: Soft power rather than hard economics has traditionally been the driving force behind India-Australia relations.
  • Cricket is a dominant theme that connects the two countries.
  • The Indian diaspora in Australia is a vibrant community that plays a robust role in connecting their country of adoption with their country of origin.

Trade relationship scenario

• $31 bn bilateral trade: The trade between the two countries has been at a modest $31 billion, largely composed of resources like coal and other minerals.
• No progress on FTA: Negotiations on a Free Trade Agreement, which began in 2011, have not moved forward significantly.
• No progress on coal mining projects in Australia: The problems faced by the Adani Group to begin work on a coal mining project in Queensland did not go down too well with investors from India.
• India Economic Strategy 2035 by Australia: One of the most widely commended initiatives has been the Australian government’s release of an India Economic Strategy 2035 Report.
  • It observes that no single market over the next 20 years will offer more growth opportunities for Australia than India.
  • It lays down a comprehensive road map for strengthening Australia’s trade engagement with India.

Development in digital technology and the role of youth

• Development of new architecture: Meanwhile India-Australia trade has been steadily evolving into a new architecture underpinned by developments in digital technology.
  • There is a rise of a younger generation of entrepreneurs and a noticeable shift in the trade basket from resources to services.
  • Technology and young entrepreneurship make a formidable combination and should set the agenda for the future of bilateral trade relations.
  • About 80% of the Australian small and medium-sized enterprises are managed by young professionals.
  • The young can see issues like immigration and outsourcing with far more equanimity than the older generation.
  • An important role of young Australians: Young Australians are thus emerging as great champions of India-Australia trade relations.

Scope for engagement in innovation and trade relations

• Tech. expertise of  Australia: There is also recognition that Australia is a laboratory of ideas, innovation, technology-led growth and university-industry partnerships.
• Scope for India in innovation and trade: India is a large and demographically young market with a love for innovation and an appetite for new products and services.
  • These synergies should add momentum to a growing engagement in trade relations.

India’s weakness and Way forward

• Weakest link and way forward: The weakest link in India’s exports to Australia is in merchandise. India needs to look at three broad areas.
• First-Focus on Market Research:  Despite globalisation, markets are country-specific and culturally sensitive.
  • Indian companies will need to invest a little more in market research on Australian consumer expectations and lifestyles.
• Second-Brand creation: Australia is a brand-conscious market while India has not created a single consumer brand of international acceptance.
  • Only when products are visible across the world’s shopping malls and supermarkets displaying their own brands that India will be recognised as a major player in the global markets.
• Third-Innovation: Innovation is emerging as the single-most-important factor for sustained success in every sphere. Global trade cannot be different.

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