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K.R. Srivats

New Delhi, July 28 Australian financial services companies have chalked out plans to expand their business with India. They are pinning hopes on the proposed Free Trade Agreement (FTA), as also on the Indian Government undertaking bold reforms in the financial sector in coming months.

The Australian companies have made “comprehensive submissions” for the proposed FTA, whose feasibility study is under way and expected to conclude this calendar year, said Mr Peter Linford, Senior Trade Commissioner - South Asia, Australian Trade Commission. He said many Australian banks want to establish presence here and have applied for licences. “If that process can be hurried up, it would be terrific,” he told Business Line.

An Australian team will be in Delhi next month to meet its Indian counterpart in the FTA feasibility study group.

Mr Linford said Australia would welcome financial sector reforms in India including raising the cap on foreign direct investment (FDI) in insurance from 26 per cent to 49 per cent.

Also, he saw a larger role for Australian superannuation funds here and noted that they have a lot of cash to invest here.

“It’s not comprehensive (Australian Superannuation fund investments) as we would like it to be,” he said.

Mr Linford also sees increased investment from Australian companies in the mining and resources sector in India as and when there was greater clarity on issues like control.

“It’s one thing to get concession for exploration, but that does not necessarily mean Australian companies would get a deal in terms of processing of resources when they are discovered from exploration. Risk and high cost is in exploration, reward is in the extraction of minerals. In some parts of India, we are getting concessions to explore, we are not getting the deal we want for extraction,” he noted. Mr Linford also said Australia wants to enhance exports of premium wine to the Indian market.

At the same time, it wants to help build capacity here in terms of improved farming techniques so that Indian farmers and wine industry can benefit and grow their exports. Australia also wants to export bulk quantities to India so that the packaging and distribution can be done out of here. “Wine will feature in our FTA discussions. We will press for lower tariffs on our wine exports to India,” Mr Linford said.

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Australian financial sector keen to expand in India

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