The contribution that India and its population make locally is already of considerable magnitude. It recently leapt ahead of others to become the third largest country of birth for Australian residents, behind only England and Australia itself. It has also proved our third-largest largest source of international tourists since the border reopening, with only our traditional mainstays of New Zealand and the United Kingdom providing more support for our recovering tourism industry.
More than 673,350 Australian residents were born in India, according to the recent census, and this includes approximately 100,000 international students who help foster important cultural dialogues within our education system to the benefit of their entire cohort.
A free trade agreement recently struck between India and Australia is a promising platform for deepening our trade relations too, particularly if the former fulfils its potential to become a consumer nation that matches the purchasing power of others in Asia.
Indeed, there is scope for India’s status as our seventh-largest trading partner and sixth-largest export market to improve markedly if it can match the goals of the trade deal with an equal intent to simplify other trade regulations.
The provisions of the new trade pact, which was signed in April and is awaiting ratification, would make it easier for Australian companies to do business in India by eliminating tariffs on almost 91% of our goods exports within 10 years, including a range of agricultural products, pharmaceuticals and wine. It would also guarantee preferential treatment to our service suppliers in sectors such as business services, research and development, and construction and engineering.
Importantly, it would allow more Indians to work and study in Australia to provide another fillip to tourism and a much-needed addition to our drained pool of workers. For example, 1,000 young Indians will be able to enter into Australia every year for working holidays within two years of the commencement of the trade pact. And students with first class honours degrees will be able to stay in Australia for three years post-study, up from two, if they work in either STEM or IT sectors of the economy.
If India can entrench its status as a fast-growing major economy – and the trade agreement is used to its full advantage – it may offer another avenue for Australia to tap the commercial opportunities offered by Asia’s rising middle class.
Scott Bannon is Head of Client Coverage, Commercial Banking at HSBC Australia.