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Australian business looking at India as 'new China'
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Rekha Bhattacharjee | 13 Jul, 2015
Those Australians who are worried over the slowing Chinese economy may
have some reasons to smile as Canberra is already working desperately to
stitch up a Free Trade Agreement with the world's second-most populous
country - India.
If everything goes according to the Australians'
plan there is every reason to believe that India would become one of
the largest trading partners of Australia. She has the potential to
become what is being called in some circles as Australia's "new China" -
the largest trading partner at this stage.
The Australian
eagerness to open such a vast market as India to its service and
manufacturing sectors is reflected through the statements made by its
federal ministers.
"We are working through the night ... putting
pressure on them (India) to help us to get to the point where we can
have a similar, very positive agreement," Treasurer Joe Hockey told a
conference held in Canberra recently. Joe Hockey's statement came after
the China-Australia Free Trade Agreement (ChAFTA) was signed mid-June.
Canberra intends to finalise a similar FTA with New Delhi by the end of this year.
A
number of commentators are writing on how Australian and Indian
geopolitical and economic interests are converging and how they can
harness the synergies to the benefit of both the parties. If the signals
being emitted from South Bock are being interpreted correctly, India is
also showing some enthusiasm to conclude the negotiations for the
Comprehensive Economic Cooperation Agreement (CECA) this year.
While
the Liberal think tank could have 2016 elections in their sight, the
Narendra Modi-led Indian government seems to be on an overdrive to
propel what is often lauded as a tiger economy into accelerated growth.
Even
though the Indo-Australian FTA negotiations commenced some seven years
ago, it's the leadership of Narendra Modi and Tony Abbott which has
added, as if, rocket fuel to the process. The clearly noticeable
acceleration came after the Australian PM visited New Delhi and his
Indian counterpart came Down Under in November last year.
At this
stage, the two-way trade between the Indian Ocean rim countries is
pegged at around A$15 billion which is just ten per cent of the value of
Australia's trade with its largest trading partner China (2013-14
figures).
The sense of optimism among the Australian stakeholders
for India is definitely palpable. Australian corporate honchos,
especially those linked with services sector, are particularly buoyed by
the thought of massive revenue the Indian market can churn.
"Services
represent around 70 per cent of Australia's economy, yet just 15 per
cent of our exports. This is an export we are determined to grow and
there are strong prospects with India across a wide range of services,
given it is one of the world's most rapidly growing services markets on
account of a rising middle class," Australiaâs Trade Minister Andrew
Robb said in a statement recently.
A similar sentiment is being nursed by India's famed IT services sector which has been asking for barriers to be removed.
Robb
has endeavoured to allay such fears and in fact painted a picture which
is very different from the one being shown by the naysayers.
"All of this suggests that India's services sector stands to benefit enormously from trade and investment liberalisation."
Besides
IT service providers, Indian businesses such pharmaceutical, farm and
fruit producers, etc also stand to gain from the trade agreement between
the two countries. Australians have identified areas like engineering,
health services, educating, contracting, construction, architecture,
design and the agriculture sector.
It is believed around two thousand goods and services have been identified by both the sides to be included in the CECA.
"The
free trade agreement has also made progress with the two sides agreeing
on 1,800 line items... And it is just a small part of Comprehensive
Economic Cooperation Agreement," India's High Commissioner Navdeep Suri
told Indian community members in Melbourne recently.
It is also
believed that, once CECA is signed, more investment would flow into
Australia from India and vice versa. Indian foreign investment into
Australia is worth almost $11 billion, with A$6.6 billion of Australian
investment in India.
"There could be no better illustration of
India's potential to be at the centre of a new 'Services Silk Road' to
drive growth in the world's most economically dynamic region," Robb said
earlier this year.
It remains to be seen whether India would get
an equal share in the revenue earned from the proposed 'Silk Road' or
finish up just as full fare paying commuters.
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What does it mean by Free Trade Agreement
Sridhar | Tue Jul 14 19:12:09 2015
and how it helps both the buyer (importer) and seller (exporter)?
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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