PRESENTER HAMISH MACDONALD: The Federal Government remains optimistic a Free Trade deal with India can be signed by the end of this year. It could be even more lucrative than the FTA recently struck with Beijing, given India’s population is forecast to overtake China’s by 2030, which would push up demand for Australian goods and services and professional expertise. Andrew Robb is there in India doing the negotiations, he’s the federal Trade Minister and he’s told political editor Alison Carabine, that the subcontinent represents enormous opportunities for Australian exporters.
ANDREW ROBB: Yes there is quite a lot of optimism or commitment; having met on Saturday with Prime Minister Modi – again quite adamant that they want to see something concluded this year – and then the general attitude of his ministers as I’ve met them, and even very senior public servants who’ve had a reputation for being difficult to progress things with, there does seem to be a change of heart under the new administration, and the vision that Prime Minister Modi has spelt out for India.
ALISON CARABINE: So if a deal is reached by the end of this calendar year, is it possible to quantify at this point, just how much it would be worth to this country?
ANDREW ROBB: No it’s not, but the fact is if we are able to strike an economic agreement on trade and investment, which is far more liberalising, in a country of 1.2 billion people, a country that is aggressively looking to bring people out of poverty and see the growth rate in this country back up at eight per cent on a continual basis, the opportunities are enormous and it will mean literally, over the decades ahead, hundreds of millions of dollars, tens of billions of dollars will accrue to Australian business if we can strike a relationship at a higher level.
ALISON CARABINE: The really big trade deal you’ve signed on behalf of Australia was last year with China, but India will soon overtake China on the population front. It also has a higher proportion of younger people who are the big consumers; does that mean that a Free Trade Agreement with India could end up being even more valuable to Australia than the one with China?
ANDREW ROBB: Let me put it this way, at the moment our two-way trade with China is $160 billion, it’s our biggest trading partner by a long way. India is $15 billion in two-way trade, so less than ten times that of China. I think if we can strike the right liberalising agreement, there is the prospect of bridging that gap, we’re talking many tens of billions of dollars in the decades ahead, and it really is a rich vein of opportunity for Australia across so many sectors; the traditional sectors, the service sectors, there’s so many opportunities.
ALISON CARABINE: One of those sectors of course is agriculture; the rise of the middle class in India means a massive jump in food consumption growth, how well placed are we in Australia, how well placed are our farmers to help feed India or could we run into some capacity restraints at this end, considering we already have FTAs with other countries on the rise, such as China but also Japan and Korea?
ANDREW ROBB: In many respects the contribution we can make in agriculture certainly is to try and meet the premium end of the market; the demands of the growing middle class. India and China far out-strip us in the production of just about every product, sometimes ten, 15, 20 times more production. Where we’re really good, is we’ve got a productivity level, we’ve got research and development, we’ve got genetics, we’ve got a quality of livestock and crop management and all of the rest, which is also available, to increase the productivity in India. We’ll see the growth across so many services that cluster around agriculture, so you need to look at it not just from a strict supply of food point of view – which there will be a lot of opportunity here – but we could never supply India, we’re only really helping at the margin, with a lot of those with higher incomes who want specialty products and high premium products and are prepared to pay for it. That market we can help India with, but at the same time we can help them with so many of our services, to increase the production of their agriculture so that they can adequately feed the hundreds of millions that I think will progressively come out of poverty, under the very reformist program that Prime Minister Modi is putting in place.
ALISON CARABINE: One ‘good’ that the Indians definitely want is energy. India wants to secure its energy future; coal, oil, gas, uranium. The heads of Rio Tinto and Woodside are there with you in India along with Gina Rinehart – how much potential do they see in the Indian market?
ANDREW ROBB: They are very enthusiastic; I think that’s why they’re here. There is enormous opportunity here, as you take hundreds of millions of people out of poverty and move hundreds of millions into the middle class, energy is a key requirement and on all fronts in the energy equation, Australia has got something to offer – and Prime Minister Modi said that personally to me in our meeting – that’s one of the key areas and the key priorities that they’ve got in increasing the engagement with Australia.
ALISON CARABINE: India will want something in return, what do they get under an FTA, is it largely increased investment opportunities?
ANDREW ROBB: It’s an investment opportunity into Australia. We want this to be two-way investment and two-way trade. A lot of their motivation, as it was with China, is to get access to the services that we’ve got, the world class services that we’ve got across so many fronts; anything to do with education, anything do to with health, construction, project management, engineering, anything to do with finance, anything to do with aged care.
ALISON CARABINE: So it’s Australian expertise that they’re after?
ANDREW ROBB: It is and they’re looking to liberalise and we’re looking for them to liberalise too, the access and opportunities for our firms to go and invest and participate and grow their business. In a country of 1.2 billion people, it really is an entry-point for so many of our businesses and that’s why we’ve got 450 people with us. There is an excitement in this country and it’s quite infectious and I do think the response I’ve heard to date from the delegates with us, has been enormously enthusiastic and optimistic, so it’s really a case of the liberalisation giving both countries opportunities; they’ve got a lot of expertise here in India – especially in I.T. and other areas – which we can benefit from. We want their capital, to help us develop our resources and energy, and all of those sorts of issues are in the mix.
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