South Australia reviews engagement strategy with Indian sister state
What is common between South Australia and Rajasthan? Plenty of sunshine and not much water. So it seems appropriate that SA has established a sister-state relationship with Rajasthan, expecting to see much water flow under the bridge in terms of trade and their economies enjoy long-term sunshine.
In mid-March the State’s Minister for Investment and Trade Mr Martin Hamilton-Smith launched a South Australia-India Engagement Strategy which is a refinement of the original strategy released in 2012. The revamped strategy aims to engage with India in several key sectors like energy, renewable resources, agribusiness, education, tourism, sport etc. with particular emphasis on Rajasthan, following the signing of a sister-state agreement last November.
The trade relationship to date
India has just four per cent of the world’s freshwater but with 16% of world’s population, has huge water management issues. Rajasthan’s case is even more severe. Comprising 10% of the country’s landmass and 5% of its population, with two-thirds its area being desert, it has only one percent of the country’s water resources. So it is no wonder that Rajasthan has prioritised water management as its top policy initiative and has welcomed SA’s assistance. With its vast experience in water reform, conservation and re-use, South Australia is eminently placed to offer its know-how and its public and private sector organisations are already working there to improve water management.
India launched the Jawaharlal Nehru National Solar Mission in 2000 setting an ambitious target of 20,000MW with the objective of achieving low cost power generation and enhanced research and development. With Rajasthan having the largest potential for renewable energy production, SA believes its technologies and services have a great role to play in this area.
Since the release of the original strategy in 2012, SA firms have achieved some success on a modest scale though.
SA’s renewable energy company Heliostat has signed two agreements with Jaipur and Mumbai companies for implementation of its technologies. Flinders Ranges Premium Grain has contracted to supply its products to two large hotel chains. Adelaide company Sydac has secured a large contract to provide simulation training for Indian Railways technicians here and establish training centres in India. Another run on the board is scored by Darren Lehman’s Cricket Academy to establish a coaching centre over there.
With the Modi Government’s new programs like Skilling India, Make in India, Digital India, 100 Smart Cities, Clean India (Swaach Bharat Abhiyan) offering opportunities for co-operative ventures in a number of areas, South Australia hopes to latch on to some of those projects and reap some benefits. Green Industries SA has already provided its technical skills in the ‘Zero Waste Roundup’ project in Ahmedabad.
In fact, the links between Rajasthan and South Australia actually go back to 1838, when the boat called The Rajasthan arrived in Adelaide on 16 November, 1838 with 254 passengers.
The three-mast ship, built in Bombay in 1837, ferried settlers and pioneers to South Australia under a scheme for Free Passage between the years 1836 and 1841, in an effort to populate the new colony.
More than 175 years later, the descendants of these very travellers, are seeking to forge deeper ties with the people of Rajasthan.
An Australian Industry Business Survey (AIBS) of 2015 found that demand for a Free Trade Agreement (FTA) with India is second only to China.
NSW is the only other state in Australia that has a sister-state agreement with an Indian state, Maharashtra. This agreement was signed in 2012.
Currently India and Australia are in an advanced stage of negotiating a Free Trade Agreement (FTA). When such an agreement comes about, the State Government hopes to piggy back on its benefits expecting a boost in its exports, among other things, of almonds, chickpeas and wine.
Challenges
Even amidst these optimistic expectations, the new Strategy document talks about the ground realities of doing business with India that pose its own challenges. India ranks 142 out of 182 countries according to a World Bank study on the ease of doing business in India. Respondents to the AIBS affirm this by nominating India as one of the top five difficult, yet important, markets in which to operate. They place India ahead of Indonesia, China and Papua New Guinea in the hard basket. Even those companies for whom India is a leading revenue earner claim the market there is a hard one.
The ABIS survey reveals 23 per cent of companies earning their highest revenues from India claim their main mode of servicing India is by subsidiary, branch or joint venture. It ranks India as the leading market for an outward investment presence followed only by the US and UK. Taking note of this key point, the SA Government has taken some serious steps such as establishing a dedicated India Team in its Department of Development, opening a South Australia Club in Mumbai and also placing emphasis on two-way trade delegations on an annual basis.
 A future of possibilities
The strategy document cites a number of positives for South Australia to claim its close Indian link. In recent years, India is has been the top source country for skilled migrants to SA. From a mere three families in the late 1960s, there are now an estimated 30,000 Indians in this state. India is the second largest market for international students after China. Local educational institutions besides providing education to them, plan to offer offshore training in partnership with Indian counterparts as part of Modi’s “Skilling India’ agenda.
Tourists from India have increased four-fold from a mere 2500 in 2009 to more than 10,000 last year exceeding the national average of growth for Indian tourists to Australia.
Exports to India have increased from $300 million in 2009 to over $800m in 2011. After some fluctuations in the past two years it is back at the $800 million mark.
The most important aspect in the Engagement Strategy is to increase B-2-B contacts by organising trade delegations. After two trade missions in August 2014 and January 2015, the state’s serious attempt was its mission last August when 80 delegates representing business, education and public sector visited India. An inbound delegation came here last February coinciding with the Cricket World Cup. This kind of two-way exchange is now formalised and the next SA delegation is planned for this August: the Government is seeking expressions of interest from businesses in Australia desiring to export goods and services and also setting up collaborative ventures. The Development Department is holding three briefing sessions in the next several weeks for intending participants in the delegation.