India-Australia Economic and Commercial Relations

India’s main exports: Pearls - precious and semi -precious stones and gems and jewellery, made up articles of textiles, marine products, floor coverings, textile yarn, engineering goods and manufactures, chemicals and related products, construction materials, plantation and agricultural products, travel goods and leather and leather manufactures including footwear.

India’s chief imports: Non-monetary gold, coal, copper and copper ores, wool, vegetables, silver, platinum, telecommunication equipment and electronic components.

Trade

Trading links between India and Australia can be traced back to the East India Company. Australia’s first commercial export was a shipment of coal to India in 1801.

Indo-Australian relations are expanding rapidly. Efforts to promote bilateral trade have been institutionalised through the establishment of the Joint Ministerial Commission (JMC) and the Joint Business Council (JBC). The 8^th session of the Indo-Australian Joint Ministerial Commission took place in New Delhi in February 2003. The Joint Ministerial Commission includes the Joint Working Group (JWG) on Energy and Minerals; and the Joint Business Group (JBG) on Natural Fibres and Textiles. The last session of the JMC noted that there was significant scope for further expansion in bilateral trade and economic cooperation.

The 14^th session of the JBC was also simultaneously held with the JMC in New Delhi in February 2003. The delegations to the JBC are coordinated by FICCI from the Indian side and the Australia-India Business Council (AIBC) from the Australian side.

Bilateral trade between India and Australia was A $ 4.3 billion during the year 2003. The value of total trade rose by A$ 895 million or 26.2% when compared with that in the previous year, 2002. The five year trade pattern could be graphically represented as below:

India’s exports to Australia in 2003 rose to A$ 977.7 million or 4.2 % over the 2002 figure of A$ 937.9 million.

India’s exports to Australia are very diverse but their volumes are not very large. The major items of export are made-up articles -textile materials; textile yarn; pearls; precious and semi-precious stones and jewellery; marine products; floor coverings; footwear; travel goods and handbags; manufactures of base metal; engineering goods/ manufactures; chemicals and related products; and plantation and agricultural products,

India’s imports from Australia in 2003 were A$ 3331.1 million. This was a steep rise over the 2002 figure of A$ 2475.7 million or by 34.6%.

India’s main imports from Australia are confined to a smaller range of primary commodities such as non-monetary gold; coal (coking and thermal); wool; copper and concentrates; silver and non ferrous metal scrap; chickpeas and lentils; dried fruits; fruits; and a few manufactured items.

In the period July 2002- June 2003, India ranked 17^th as Australia’s trading partner. During this period, it ranked 11^th as Australia’s export destination, with share in Australia’s total exports being 2.2%. In the same period, India ranked 27^th as an import source, with share in Australia’s total imports being 0.7%.

Investments

The total value of Australian investments in India during the period August 1991 to December 2003 was Rs 67986.2 million or A$ 2124.6 million. This accounts for 2.34 % of the total approved investment from all countries. The number of Australian joint ventures in India that were approved during the period August 1991 to Dec 2003 was 491. Of these 312 collaborations were financial and 177 technical. According to accumulated total of approvals up to December 2003, Australia ranked as the 8^th largest source of foreign investments in India.

Major Indian investments in Australia include that by India’s Oswal Group to construct an ammonia plant at Karratha close to North-West Shelf project in the State of Western Australia. Most of its di-ammonium phosphate (DAP) fertiliser production would be sold to India. Sterlite Industries have acquired two copper mines in the State of Tasmania in Mt Lyell and a copper/gold mine in the State of Queensland at Charters Towers. The Aditya Birla Group has acquired copper mines at Nifty (Western Australia) and Mt Gordon (Queensland). Asian Paints acquired Pacific Paints in the State of Queensland. The Oberoi Hotels International manages the Hotel Windsor in Melbourne.

Australian companies in India

Some 100 Australian companies now have offices in India. Significant among these companies are Telstra (telecommunications); BHP Billiton (mining); Rio Tinto (mining); MIM Holdings (mining); Snowy Mountain Engineering Corporation (infrastructure development); Argyle diamonds (technical support office for diamond sales); P & O (development of container ports); Clough Engineering (port development); AMP (insurance sector in association with Sanmar Group); Orica Limited (joint venture with Imperial Chemical Industries); Lucent Technologies (IT); ANZ (IT); Fosters (brewery); Boral Ltd; Qantas (offline station will become online when Qantas resumes its flight to India in September 2004); TNT Express (courier services); and Village Roadshow (entertainment).

Indian Organisations in Australia

Government of India offices and PSUs in Australia include Government of India Tourist Office; State Bank of India (representative office since November 1998 upgraded to branch office in April 2004); New India Assurance Co Ltd (has a presence in Australia since 1955); and Air India (offline station). Engineers India Limited has a presence in Perth.

All the major Indian IT companies have a presence in Australia. These include Infosys; Satyam; TCS; HCL; Polaris Software Lab Ltd; Birlasoft; NIIT; ICICI Infotech; Wipro; Mahindra-British Telecom Ltd; Pentasoft; Kale Consultants Australia P/L; Tata Infotech Limited; and Zensar Technologies. Infosys, Satyam, TCS and Birlasoft have established Software Development Centres in either Sydney or Melbourne.

The Taj Group of Hotels has an office in Sydney. Tata Steel has a presence in Brisbane.

Opportunities

Potential for Indo-Australian cooperation exists in information technology; biotechnology both plant and human; drugs and pharmaceuticals; infrastructure development including roads, ports, airports and railways; power sector; mining; oil and natural including LNG; water management, soil conservation and waste disposal; food processing and agribusiness; film and television; processing of gems and jewellery; tourism; and education.

Bilateral agreements between India and Australia

1. Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income
2. Agreement on the Promotion and Protection of Investments
3. Special Agreement on Cooperation in Science and Technology
4. Arrangement for Recognition of Equivalence of Food Inspection and Certification Systems covering fish and fisheries products exported from India to Australia
5. MOU concerning cooperation in the Information Industries
6. MOU between NASSCOM and the Australian Information Industry Association (AIIA)
7. MOU for an exchange programme on higher education
8. MOU concerning cooperation in the field of Telecommunications
9. MOU on Tourism
10. MOU for cooperation between Karnataka and Queensland

Source: Indian High Commission, Australia