ARCHIVED MEDIA RELEASE
PA/26/2006 10 October 2006
SURGE IN INDO-AUSTRALIAN ECONOMIC DEALINGS:
EMPHASIS ON SOUTH INDIA
Indo-Australian two way trade was set to pass the symbolic total of 10 billion Australian dollars [US$8 billion] this year, the Australian High Commissioner, Mr John McCarthy, said in Chennai today at the Annual General Meeting of the Indo-Australian Chamber of Commerce. The meeting was chaired by Mr K.M Mammen, Chairman and Managing Director of MRF Ltd.
India was Australia’s fastest growing significant export market with an average growth over five years of 31.5 % per annum. India was Australia’s sixth biggest export destination. In addition, two-way investment stood at over US$2 billion and was growing.
Mr McCarthy said the key components of the relationship lay in energy and resources and services.
At the end of a six-day tour of Tamil Nadu, Mr McCarthy said Australia was working intensively to stimulate further its interchange with South India. He referred to the fact that an acting Consul General was already in place in Chennai and that the Prime Minister and two other senior ministers as well as three state premiers had visited Chennai in the past year or so. Australian activity in Bangalore and Hyderabad had also grown significantly.
Mr McCarthy said that Australia was proud of its record of sales of major commodities such as coal (exports just under US$2 bill) and gold (exports at just over US$2 bill.). McCarthy said he was confident that Australia’s resources and energy trade would continue to grow and that at some stage it would include significant quantities of LNG.
The High Commissioner looked forward to prospective changes in Indian mining legislation which would encourage foreign investment in the Indian resources sectors. Mr McCarthy made particular mention of the need for implementation of the recommendations of the Hoda report.
Mr McCarthy added that Australian diamonds worth about US$600 million pa were also exported to India via Antwerp and hence did not appear in our two way trade figures.
Mr McCarthy underlined that Australian resources and energy were contributing to India’s economic rise. As examples he noted Australian coal was fuelling India’s industry; Australian gold and diamonds helped employ literally millions of Indian artisans in the jewellery industry.
Major Australian companies were active in India. Mr McCarthy cited the fact that Woolworths Australia and Bluescope Steel had just entered into joint ventures with the Tata Group. SMEC, one of Australia’s leading engineering companies, had its headquarters for Asia in India. Moreover, the big Australian miners, BHP-Billiton and Rio Tinto had long been active in India.
“But this is not a one way business, Mr McCarthy said, “Indian resource companies such as Tata Steel, Aditya Birla Group, the Oswal Group, and Gujarat NRE had all made substantial investments in the resources area in Australia.”
On services, Mr McCarthy said that about 30,000 Indian students were now studying in Australia, the second biggest number of Indians studying abroad after the United States. Most of the courses undertaken were in post graduate studies.
“Australian society was greatly enriched by the presence of Indian students in our tertiary institutions,” the High Commissioner said.
Mr McCarthy added that each country’s capacity to contribute to scientific and technological excellence in the other would be enhanced by the new Science and Technology program announced by the Australian Prime Minister in March this year, to which the Australian Government was contributing about US$16 million over five years. This was in addition to a new US$4 million scholarship program.
Over 26 Indian IT firms had a presence in Australia and hardly a month went by without an Australian company announcing a new or boosted BPO centre in India. An example of this has been the growth of the ANZ IT Park in Bangalore. In the past year alone or so the company had doubled its professional staff to 1650 and had added a logistics team to its IT Services function.
Referring specifically to the South, Mr McCarthy said that Australians traditionally saw Southern skills as lying in the IT industry. “While this view is spot on, McCarthy said, referring to the presence of Wipro, Infosys and Polaris in Australia – as well as Australian outsourcing to the South, “there is much more going on than that.”
“Perhaps less recognised but also crucially important has been the Industrial Transformation in the South. While always a manufacturing hub, we are now seeing advanced plants by pc, whitegoods and telecommunications manufacturers being set up by the likes of Dell and Nokia and many more.”
In the case of the Nokia plant in Chennai, Mr McCarthy noted that their US$250 million facility was built by the Australian construction company, Leighton, the first time a non Finnish company has built one of their plants. Leighton now has a 1200 man workforce and is currently constructing the Flex facility in Chennai and is soon to begin a Motorola Plant.
Late last year, the Australian Minister for Agriculture, Mr McGauran, launched the National Food Industry Strategy in the South. This strategy seeks to promote business between Australian and Indian food conglomerates to the benefit of the Indian consumer. Later this month, there is a major launch in Bangalore of more than a dozen brands of Australian processed foods and beverages. Shelf space has been acquired in six retail chains including Spencers, Nilgiris and FoodWorld.
Beyond retail food, the Australian grain and pulse trade and conglomerated agribusiness companies of the stature of Elders are looking to build facilities which enhance the Indian grain distribution system.
Australia is not doing all this just to be “a good sport” the High Commissioner said. “It is because of the reality of what is happening in South India. This is a highly educated community. It is instructive that over a third of the students that come to Australia are from the five southern states. These five states are hard working, and entrepreneurial and amongst the most open to foreign investment. They are to the forefront and some would argue the leaders of India’s economic revolution.”
For further information, please contact Mr Tony Burchill, Trade Commissioner & Counsellor Commercial, Australian Trade Commission, on mobile (0) 98100 58766.