India-Mystical No Longer: Bob McMullan Draws Attention to What Australia Should Do
McMullan, Bob, Business Asia
India remains the great untapped trade opportunity for Australia. I was involved in a Senate inquiry into Australian relations with India 15 years ago. We concluded then that Australia's relationship with India suffered from "benign neglect" or perhaps even "shameful neglect". This was at a time that the opening of the Indian economy was just beginning although the signs were already clear.
But we missed them then and we continue to fail to take full advantage of the giant trade opportunities that India offers. And there should be no doubt that there are big opportunities or that we are failing to win a fair share of the opportunities that exist. This is not just a government responsibility. It is a product of a mind set in business, government and the wider community which sees the great opportunities to our north in China but fails to look westward to India.
In the period 1993 to 2003 Australian exports to India have grown steadily. But, our share of the market has fallen!
After allowing for some changes in measurement and one off factors Australian exports to India trebled from 1993-1994 to 2002-2003. By the end of that period exports to India were $2.58 billion. However our share of India's total imports fell from 3.2 percent in 1993, 2.2 percent in 2002. If our share had been maintained our exports would be at least $1 billion greater.
We cannot excuse ourselves by blaming competition from low wage countries or those closer to India. The painful fact is that nations such as Canada, for example, which had a smaller share of India's trade at the start of the period, have increased their trade with India more rapidly than Australia.
The big trade opportunities are not only in the obvious areas of merchandise trade. There is tremendous potential in services trade as well. It is well know that India is strong in IT and related industries. Collaboration and cooperation in this sector can be a direct source of trade and investment and also contribute to the efficiency in other sectors of Australian industry.
Less obviously, there are big business opportunities in a range of other service sectors. Ten years ago I introduced several Australian financial sector businesses to the then finance minister, Manmohan Singh, to discuss opportunities which would emerge as he opened up that sector of the economy.
I was impressed then with his commitment to openness and reform.
Now that Manmohan Singh is Prime Minister of India his profound contribution to economic reform is equally apparent and more important.
Recent efforts by the Australian Film Industry give reason for confidence that the Indo-Australian film trade hold strong growth potential.
The leader of a recent film industry delegation to Mumbai, well know producer John Winter, saw opportunity for a series of co-production projects between the two countries to be realised. Furthermore, IDP has recognised great potential to attract students to Australia's world class film and television courses.
This is just the tip of the potential iceberg of India's students who might be attracted to Australia. In this are at least we are beginning to wake up to India's potential.
Pressure from competition from other countries has turned Australian universities' eyes to new markets, including India.
The United States has traditionally been Indian students' number one destination. …