The Hindu Business Line : `Australia offers opportunities in energy, education, IT and biotech'

The interest to invest in India, especially by Australian corporates is quickening, noticeably in the last two years. Australia has notched up one position to emerge as the eighth largest investor in India bringing in over $(Australian)1.5 billion . There are over 100 joint ventures spread in various sectors.

The cooling of relations between the two countries following the Pokhran nuclear blasts in 1998 has also thawed out. A new optimism is gaining in improving connectivity, with Qantas, the Australian national carrier, flying in to Mumbai and exploring more destinations. This is expected to trigger growth in tourism, leisure and education sectors.

The two-way trade between the countries has been gaining strongly and stood at $3.4 billion, with the balance of trade in Australia's favour. Both the economies are also growing at a healthy rate.

However, sufficient attention has not been paid to enriching collaborations between the two nations in both old and new economies, despite having great many areas of commonness. The Australian High Commissioner in India, Ms Penelope Wensley, put all this in perspective in an interview with Business Line when she was recently in Hyderabad.

Excerpts from the interview:

What are the new areas of business co-operation that Australia is looking at to raise their investments in India?

I feel energy should be the centre point for bilateral trade between the two countries. Australia is one of the strongest in this sector. Coal has been the core export for decades.

However, an interesting trend noticed in the recent past is the great demand for gold, which has emerged as the top export earner for us from India. Leisure/tourism, entertainment, biotechnology, and education are focus areas which should give Australian companies a lot of scope in India. Agri-food processing, health services, biotechnology, wine and LNG supply are other promising areas.

Already major companies which have invested in India include P&O Ports developing infrastructure; Foster's Group; BHP Billiton and Rio Tinto into mineral and petroleum sectors; and, more recently, Gribbles Pathology which has established a joint venture with Dr Reddy's Laboratories in healthcare.

What are the initiatives taken to strengthen bilateral cooperation from your side?

With the chill that affected Indo-Australia relations for political reason, post-Pokhran having dissipated, Australia has set in motion several formal mechanisms to have direct engagement with India.

For example, we have set up joint working groups in such areas as minerals, textiles and wool. Similarly, a Joint Ministerial Committee has been set up. There is a need for more working groups in areas of mutual interest which should meet regularly.

We have also initiated regular talks at the official level on quarantine issues, where minor irritants persist. Similarly market access in both countries is on top of the agenda.

At the industry level, the Australia India Business Council (AIBC) is becoming more active. It is working closely with the CII and Ficci. Australia firmly believes in focussed missions, say, in coal, or environmental technology.

What opportunities await Indian companies/business community in Australia?

India's investment in Australia is approaching $1 billion. The key areas of investment are mining, resources and information technology. An interesting aspect is the increasing integration of both economies.

For example, the Oswal Group has reached an agreement with the Western Australian Government to invest $670 million to set up the world's largest ammonia plant in Australia. The ammonia plant will be built by Burrup Fertilisers and financed by Oswal. The product will partly be shipped back to India and feed the industry there.

This development follows investments by Birla and Sterlite companies in copper resources in Queensland, Western Australia and Tasmania.

In recent weeks, a delegation from Invest Australia met major India companies to attract investments in Australia. It would be prudent for Indian companies to invest more into the energy sector in Australia and facilitate backward integration, as Oswal is showing. Several Indian IT majors including Tata, Wipro, Satyam, Infosys, Pentasoft and HCL have already set up facilities.

India has been a focus for hardsell of Australia's education sector to attract students. However, visas, work permits, etc. are stated to be a comparative disincentive for Indian students vis-à-vis the US or the UK?

Australia has emerged as the third most popular destination for Indian students.

The numbers have gone up from 8,000 about four year ago to 14,000 in 2002 and 18,000 by end 2003, which is a big jump. We see an insatiable appetite for quality education from India and Australia is geared to provide it.

In the past few years, there has been relaxation of rules and regulations for students seeking work, after degree, especially if they are sponsored by organisations or companies. There are a few new schemes, which I cannot give details offhand, which facilitate residency and work in Australia, especially in the rural areas. The priority is for professionals in areas where Australia has shortage. For example, there is shortage of doctors, nurses, and IT professionals now.

Australia is emphasising more on building institutional links in the education sector and not just attracting individual students. There is a lot to offer in the technical and vocational education spheres.

Indians still perceive Australia as a country difficult for immigration and getting visas. What is the idea in opening several offices in Indian cities recently?

I disagree with the view that Australia is a difficult country as far as immigration is concerned.

It is built on immigrants, and Indians are today the second largest community with 150,000. Because the relationships are growing at a fast pace across the board in several areas there is a surge in demand for visas, especially from tourists, business community, students and prospective immigrants.

To streamline the processing of visa applications, especially check document fraud, terrorist concerns, etc., we have put in place these offices and mechanisms. They are not restrictive, but aimed at smoothening the entire procedure.

India also happens to be the second largest source of skilled, independent migrants to Australia.

Travel/tourism offer great scope for both countries. How is Australia going ahead to tap these areas?

In tourism there is vast untapped potential. While 53,000 Australians went to India, about 47,000 came to Australia last year. Both countries have a range of attractive tourist attractions.

Air connectivity is the key to boosting this. Hence, Qantas Airways recently launched thrice-a-week flights to Mumbai from Sydney. More destinations such as Chennai and Bangalore are in the offing.

We have also started dialogues with the Indian Aviation Ministry and discussions are scheduled in September to modernise and update air services between the two countries.

Indian Airlines or Air India would have landing rights in Australia. Already Jet Airways is expressing keenness to fly to Australia.

India and Australia have long standing collaborations in agriculture, science and technology. What is the latest big initiative?

Biotechnology has emerged a major focus area. A series of delegations have visited and university-institute contacts have been established, including two intensive conference. But the big step forward is the decision of the Government of Queensland to open a Trade and Investment Office in Bangalore.

This is a follow up of the Memorandum of Understanding (MoU) signed last year between Queensland (a smart State in biotech) with the Karnataka Government. This Trade and Investment Office is expected to catalyse activity in the two areas of biotechnology and IT.

There is a growing demand for niche products from Australia, especially dried fruit and vegetables in the off-season in South India. Specialised oils to turn grapes into sultanas (raisins) and to dry chillies are becoming popular.

More Stories on : Interview | Foreign Trade | Foreign Relations

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Salutary safeguards

Sweeten the sugar policy

The coming global recession in 2005

Advantages of freeing EPF investment

Audit and its rights: A question of propriety

`Australia offers opportunities in energy, education, IT and biotech'

`The critical issue now is implementation of schemes' — Dr Montek Singh Ahluwalia, Dy Chairman, Planning Commission

Inflation challenge

GTB depositors