Australian businesses recognise India’s long-term growth potential
The Hon Barry O’Farrell AO, High Commissioner of Australia to India, is confident that Australia is well placed to fulfil India’s investment needs, given that the former is the world’s fourth largest pension funds market. He further elaborates on key opportunities for bilateral collaboration in areas including food processing, education, energy, EVs, telecom and Industry 4.0.
IBT: Recently, India and Australia engaged in an India-Australia leaders’ virtual summit and extended the bilateral Strategic Partnership concluded in 2009 to a Comprehensive Strategic Partnership (CSP). What is the rationale and the key areas that will benefit the most from this revision?
Barry O’Farrell AO: Australia-India ties are at historic highs. By elevating our relationship to the level of a Comprehensive Strategic Partnership, India and Australia have cemented what has been a rapid deepening and broadening of the relationship. The partnership also shows our commitment to working even closer together to pursue a shared vision for the Indo-Pacific region – to ensuring that the region is secure, open, inclusive and prosperous.
In addition, our Prime Ministers signed eight high impact, practical agreements to advance strategic and economic cooperation. These agreements ranged from maritime and cyber security to critical minerals, education and water management. These agreements will deepen our strategic and economic cooperation, at a time of unprecedented global challenges.
IBT: India is undertaking reforms in various sectors, creating an environment conducive for business and FDI. How do you see it impacting Australian investments in India and what is their view on India as a market from a long term perspective?
Barry O’Farrell AO: In responding to the economic challenges of COVID-19, we have seen India adopt fundamental reforms that have opened up its sectors to new investments. Reforms in India’s agricultural sector create opportunities for Australia to invest in India’s agricultural supply chain infrastructure, including in food processing, logistics and bulk storage solutions. Similarly, India’s program of divestment of quality government owned assets will continue to present opportunities to Australian investors, including through India’s National Investment and Infrastructure Fund (NIIF).
Recently, we hosted some of Australia’s largest investment funds – collectively managing assets of more than AUD 736 billion (INR 38 lakh crore) – in exploring investment opportunities in India with the NIIF.
The virtual delegation follows in-person tours to New Delhi and Mumbai in 2018 and 2019 facilitated by the Australian Government, and delivered on a commitment made between Prime Ministers Modi and Morrison in the June virtual summit support knowledge and network building among investors. Australia is well-placed to support India’s investment needs: Australia finished 2019 with the world’s fourth-largest pension (or as we call them, superannuation) funds market in the world, valued at AUD 2.95 trillion (INR 150 lakh crore).
There is recognition among Australian businesses that over the long term, India’s economy is destined for considerable growth across a range of sectors. We welcome further reforms to increase investment attractiveness and ease of doing business.
IBT: How are Australian companies looking at their global value chains in the post-COVID era? Which sectors in India could witness a surge in Australian investment and why?
Barry O’Farrell AO: COVID-19 introduced enormous challenges to global trading – and shone a light on the risks of overdependence on a single market for both suppliers and customers. Market diversification to manage those risks and build supply chain resilience is high on businesses’ agendas. There won’t be a sudden surge in investment as supply lines take time to shift. However, there have been several notable investments made into India’s growing e-commerce sector this year, which is proof some of the world’s largest companies have confidence in India. This will flow through to others.
IBT: How is the establishment of an Australia-India Food Partnership expected to open up new opportunities and benefit the food processing sectors in both countries?
Barry O’Farrell AO: Australia and India have been partners in food and agriculture for a very long time and we continue to progress each other’s market access requests, creating the environment for greater trade and investment, including in food processing. Our overseas investment agencies support this through the great work they do in fostering and developing business ties.
Both countries have made strong progress in market access matters over the last 12 months for the benefit of our exporters and farmers. Australia has granted access for the import of Indian pomegranates and approved an additional facility for the export of Indian mangoes to Australia. Similarly, India has made changes to accepted quarantine treatments for Australian malting barley and horticultural products.
Together, we are also exploring long‐term collaboration in grains management. There are many other opportunities, which will provide consumers in Australia and India with greater choice along with trade benefits for our economies, and the livelihoods of our farmers.
IBT: India is currently Australia’s 4th largest export market. How is its role expected to evolve going forward, and what are the major opportunities that Australia would like to explore for enhancement of exports?
Barry O’Farrell AO: Going forward, Australia’s goods and services exports can support India’s economic growth.
The counter-seasonal supply of agricultural produce is a big strength of our trading relationship. India is an agricultural powerhouse in its own right, but where there are shortfalls in domestic production, our exports are able to meet India’s demand for a wide variety of foods and agricultural products. And this goes both ways.
Our growing two-way trade in agriculture means consumers in India can enjoy Australian walnuts, almonds, and beer made from Australian malting barley, to name a few. Australian consumers can likewise savour Indian mangoes, table grapes and – more recently, following completion of an import protocol – pomegranates. With world-leading innovation, technology, productivity, knowledge, research and development, we can also export our know-how along with our agricultural goods.
Australia also has great potential to be a reliable energy partner to India. We can help India meet its energy demand by supplying high calorific coal, liquefied natural gas, and potentially in the future, hydrogen.
As India transforms towards cleaner technologies, Australia can be a trusted and reliable supplier of critical minerals. For example, Australia can supply India with critical resources like lithium, cobalt and zircon as India works to become a world-leading manufacturer of renewable technology, electric vehicles, telecommunications and batteries.
Other sectors where we see enormous potential to grow our trading relationship with India include education, infrastructure, health and advanced information technology services, such as cybersecurity.
IBT: India is looking to bring in university campuses of leading world class institutes into India. What opportunities does this present for Australian universities, and what role can they play in the Indian education ecosystem?
Barry O’Farrell AO: As a world-class education provider, Australia is well placed to partner with India across secondary, university and vocational education sectors. Australia is the second most popular destination for Indian students seeking international education opportunities. As of August 2020, there are over 110,000 Indian students enrolled to study in Australia.
The Indian Government’s National Education Policy provides scope for greater collaboration between India and Australia. For example, it calls for selected global universities (those among the top 100 universities in the world) to be invited to establish foreign branch campuses in India. Seven Australian universities featured in the top 100 of the Shanghai Ranking of World Universities are already actively engaged with India, and are eagerly awaiting the Indian government’s regulations governing the entry of institutions and operations in India.
In the meantime, Australian universities are already collaborating directly with Indian institutions through twinning arrangements, articulation programs, the joint supervision of PhD programs, faculty and student exchange programs and joint curriculum enhancement academic programs.
Getting education right is critical for India to maximise the potential of its demographic dividend; Australian education providers stand ready to support India’s economic transformation.
IBT: What key benefits does Australia provide Indian businesses as a destination for investment? How do you view the potential of collaboration between technology companies of both countries in the emerging paradigm of industry 4.0, AI, automation, etc? What initiatives/mechanisms are being explored in this regard?
Barry O’Farrell AO: Many of India’s top companies have invested into Australia. They and other investors choose to invest in Australia due to the resilience of our economy, which is built on foundations of sound governance and strong institutions. These foundations and a proactive response to the global economic downturn caused by COVID has protected the Australian economy, which remains welcoming of investment.
We are one of the most business-friendly countries in the world, and with 14 free trade agreements in place, approximately 70% of our trade enjoys liberalised access to overseas markets. Twelve of our 15 largest markets are in Asia and Oceania – which makes Australia a great place from which businesses can engage with the rest of Asia.
Australia is also the perfect marketplace for digital Indian start-ups to develop their products: Ola Cabs, for example, invested in Australia in 2018, recognising it as an attractive and high-value market that fosters fair competition.
Australia is also lucky to have an abundance of critical minerals, and there are opportunities for Indian businesses along the entire supply-chain whether it be exploration, extraction, production and processing. Australia is one of the most technically advanced, innovative and efficient global mining jurisdictions, with a long history of successful project development. And we have focused on building a supportive policy environment. Indian companies have already invested in such mines, and our new critical minerals prospectus lists over 200 potential investment opportunities for Indian investors.
There is also enormous potential for Australia and India to increase collaboration in science and technology. A very recent example is the partnership between Australia’s Griffith University and Indian Immunological Limited, which is working on the development of a vaccine for both COVID-19 and the Zika virus.
Digital technology companies and research institutions in both countries can also join forces in areas such as cyber security and artificial intelligence (AI). We will soon be launching a new initiative to support these type of collaborations called the Australia-India Cyber and Critical Technology Partnership Grant Program, and will be seeking proposals from industry experts and researchers in India and Australia on technologies such as AI, quantum computing, and big data.
The Hon Barry O’Farrell AO was announced as Australia’s High Commissioner to India on Tuesday, February 18, 2020. He served in the Parliament of New South Wales from 1995 to 2015, including as the State’s 43rd Premier between 2011 and 2014. Australia’s most populous and multicultural State, New South Wales generates a third of the nation’s Gross Domestic Product.
As Premier, Mr O’Farrell initiated and led annual trade missions to India to promote economic, cultural and social links between New South Wales and the states of India. He has also served as NSW’s Special Envoy for India and has made a significant contribution as the Deputy Chair of the Australia India Council Board.
Mr O’Farrell has a Bachelor of Arts from the Australian National University, Canberra. Born in Melbourne, Mr O’Farrell grew up in Darwin. He is married to Rosemary and they have two adult sons.