Syllabus Mapping:
Mains- GS-II: Bilateral, regional, and global groupings and agreements involving India and/or affecting India’s interests.
The New Roadmap: A Framework for Economic Growth
Background
• The India-Australia Economic Cooperation and Trade Agreement (ECTA) was implemented to boost bilateral trade.
• However, there was a need for a comprehensive roadmap to guide future engagement beyond trade to investment, technology transfer, and skill development.
• The New Roadmap for Australia’s Economic Engagement with India was introduced by Australian Prime Minister Anthony Albanese to address this need.
Key Features of the Roadmap
The roadmap identifies four "Superhighways of Growth" and seven "Major Economic Roads to Prosperity" that will define the India-Australia economic partnership.
A. Four Superhighways of Growth
1. Clean Energy:
o Australia is the largest producer of lithium, a critical component for electric vehicle (EV) batteries.
o It also holds the second-largest reserves of nickel and cobalt, key minerals required for India's green energy transition.
o Collaboration in solar, wind, and hydrogen energy is expected to drive future investments
2. Education and Skill Development:
o India requires 2 crore skilled professionals annually, making skill development a priority.
o Australian universities are expanding their presence in India, offering world-class education.
o This collaboration aligns with India’s Skill India and NEP 2020 initiatives.
3. Agribusiness and Food Security:
o Australia is a major supplier of pulses, dairy, and wine to India.
o Opportunities exist for technological cooperation in precision farming, water conservation, and sustainable agriculture.
4. Tourism and Cultural Exchange:
o Post-COVID, the number of Indian tourists visiting Australia is increasing.
o Enhanced air connectivity and visa liberalization could further boost tourism.
B. Seven Major Economic Roads to Prosperity
1. Investment: Australia aims to increase investment in India’s infrastructure, manufacturing, and startups.
2. Technology: Digital economy collaboration, particularly in AI, quantum computing, and cybersecurity.
3. Sports: Shared expertise in cricket, sports management, and athlete training.
4. Culture & Arts: Strengthening creative industries and cultural exchanges.
5. Resources: Leveraging Australia’s mining industry for India’s industrial growth.
6. Defence & Space: Expanding cooperation in defense technology, maritime security, and space exploration.
7. Health: Joint research in pharmaceuticals, biotechnology, and healthcare innovation.
Economic Growth and Bilateral Trade Trends
A. Trade Growth Over the Years
• India’s exports to the world grew by 35% in the last five years, but exports to Australia surged by 66%—almost double the global average.
• Key trade components:
o India exports: Pharmaceuticals, textiles, machinery, and IT services.
o Australia exports: Coal, critical minerals, education services, and agricultural products.
B. Role of the Comprehensive Economic Cooperation Agreement (CECA)
• India and Australia are negotiating the Comprehensive Economic Cooperation Agreement (CECA), which will further liberalize trade and investment.
• Key expectations from CECA:
o Tariff reductions on Indian textiles and agricultural goods.
o Greater market access for Indian IT and financial services.
o Stronger investment protection measures.
Australia’s Role in Supporting India’s Energy and Industrial Growth
A. Critical Minerals and Clean Energy Collaboration
• India’s push for electric mobility and battery storage aligns with Australia’s expertise in lithium, nickel, and cobalt.
• Australia is investing in green hydrogen projects, which could help India achieve its renewable energy targets.
B. Skill Development and Higher Education
• Australian universities were among the first foreign institutions to establish campuses in India.
• India’s National Education Policy (NEP) 2020 encourages international collaborations, benefiting both nations.
The Role of the Indian Diaspora in Strengthening Relations
• Australia has a strong and rapidly growing Indian diaspora that plays a crucial role in:
o Strengthening economic ties and cultural diplomacy.
o Influencing policy decisions on trade and immigration.
o Enhancing business collaboration between Indian and Australian firms.
• The Maitri Grants Program, backed by ₹132 crore from the Australian government, aims to maximize the potential of the diaspora.
Challenges and the Way Forward
A. Challenges in India-Australia Economic Engagement
1. Trade Imbalance: India imports significantly more from Australia than it exports.
2. Tariff and Non-Tariff Barriers: Both nations have to navigate regulatory hurdles in sensitive sectors like agriculture and pharmaceuticals.
3. Strategic Differences: While Australia has strong economic ties with China, India's security concerns with China may create diplomatic tensions.
4. Implementation of Agreements: The timely execution of CECA and other trade agreements is crucial for realizing full potential.
B. Way Forward for Strengthening Ties
• Diversification of Trade: Encouraging Indian exports in pharmaceuticals, textiles, and IT.
• Fast-Tracking CECA: Expediting negotiations to enhance investment flows.
• Energy Cooperation: Strengthening research and development in green hydrogen and solar energy.
• Enhancing Education and Skill Ties: Expanding Australian university campuses in India to meet skill demands.
• Diaspora Engagement: Leveraging the Indian community in Australia for deeper economic and diplomatic engagement.