Australia Pivot to Major Trade Partner India
(19 May 2020 – Australia) Australian Prime Minister Scott Morrison and Indian Prime Minister Narendra Modi are set to ingrain new agreements to develop dependable supply chains in key strategic sectors, including medical goods, technology and critical minerals as diplomatic tensions rise with China.
The Australian Prime Minister will use an upcoming virtual summit with Mr Modi in June to scale up efforts to diversify Australia’s export markets and find trusted suppliers of vital products and components. The summit follows the cancellation of the Australian Prime Minister’s planned state visit to India in January as a result of the bushfire crisis. The leaders are also set to rubber stamp a new defence agreement allowing reciprocal access to bases and co-operation on military technology projects. A new education partnership has also been floated to help overcome Australian university reliance on Chinese students. Agricultural exports to India are slated for expansion, including barley, as China enforces onerous tariff barriers. “India is a natural partner for Australia” Prime Minister Scott Morrison commented in 2019 ahead of his planned visit.
East & Partners latest Australian Trade Finance research also confirms a strong surge in India’s status as a top destination for importers and exporters while China’s prominence continues to slide. One in two institutional enterprises nominate China as a key import / export geography, noting this proportion has been falling steadily by three percent per annum since reaching a record high of 58 percent in H2 2016. The shift away from China has been even more dramatic in the middle market and SME segments.
“India would be even more important to Australia in the post-COVID world. If one of the lessons from COVID is that countries need to spread their risk, then finding new markets or building up existing markets is a crucial part of that” stated Former Department of Foreign Affairs and Trade (DFAT) secretary Peter Varghese.
“India, a member of the Quadrilateral Security Dialogue with Australia, Japan and the US, was a vital strategic partner to Australia in helping constrain China’s ambitions to be the predominant power. That shared objective between Australia and India of not wanting to see the region dominated by China is a key component of building up our geopolitical relationship” Mr Varghese said
“Australia’s handling of the coronavirus crisis would help elevate the bilateral partnership to the next level. The way the government, the business community and society have managed the pandemic has raised our stocks in Delhi as a trusted, reliable partner” stated Australian Strategic Policy Institute Defence Program Director, Michael Shoebridge.