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India – Australia government ties

India - Australia government ties

Overview

The Republic of India and the Commonwealth of Australia share political, economic, security, linguistic and sporting ties. Before independence, Australia and India were both part of the British Empire and today both countries are members of the Commonwealth of Nations. The relationship between the two countries is sometimes tense, but long established – it started immediately following the European founding of the penal colony of New South Wales, where trade was controlled by the British East India Company. Diplomatic relations were later established in the pre-Independence period, when the Consulate General of India was first opened as a Trade Office in Sydney in 1941.

Further historical ties between the two countries include the Western Australia town of Australind, which is named after Australia and India, and the towns of Cervantes, Northampton, and Madura, which were used for breeding cavalry horses for British Indian Army during the late 19th century. Years later, after World War II, the Australian government of Ben Chifley supported the independence of India from the United Kingdom.

Today, Australia has placed India near the top of its international partnerships. Both countries recognise the potential for further cooperation.

Political overview

One of the most significant ties between Australia and India is their shared love of cricket and field hockey, the latter of which came to both countries with the British military. Field hockey teams from both countries have ranked among the best in the world for many years have frequently competed on the hockey field. The same applies to the game of cricket – though the competition between the two countries on that field has been historically tense and marred by controversy. Still, Australian cricketers like Shane Warne, Adam Gilchrist and Brett Lee are popular among Indian cricket lovers.

Another important area to the bilateral relationship between Australia and India is in the education sector. In the 1950s and 1960s, many Indian students were sponsored to come and study abroad in Australia as part of the Colombo Plan. In more recent years, Australia has continued to be a major destination for Indian students who recognise the high quality and cost competitiveness of Australian education services. Enrolments of Indian students in Australia have increased at an average annual rate of around 41 per cent since 2002. In 2009, there were 120,569 Indian students enrolled in Australian schools. However, also in 2009, relations between the two nations were strained by attacks on Indian students in Australia. Police denied that the attacks were racially motivated, but the government in India had a different view, leading to high-level meetings with Australian officials.

Economic overview

The trade relationship between Australia and India can be traced back to late 18th century, when coal from Sydney and horses from NSW were exported to India. In recent years, that economic relationship has grown steadily – and has the potential to grow considerably more as India’s economic expansion continues, and their industrial and consumer demands grow.

Two-way goods and services trade added up to $22.3 billion in 2009-10. That year, India was Australia’s third largest export market, which was up from fourth largest the year before. Major Australian exports to India include non-monetary gold, coal, crude petroleum, and copper ores and concentrates.

Although the pair’s trade relationship consists primarily of merchandise trade, the services trade is not to be undervalued. In 2009-10, Australia exported $3.6 billion worth of services to India. That number is poised to grow as new prospects emerge in sectors like biotechnology, tourism, health, film, insurance, and – as mentioned above – education. Education exports to India in 2009-10 totalled $3.1 billion, with India the second largest source of international students studying in Australia.

In 2009, Australia’s total investment in India accounted for over $3 billion, including $278 million in direct investment and around $2 billion in portfolio investment assets. This investment covers many sectors, including manufacturing, minerals processing, food processing, telecommunications, hotels, automotive, and oil and gas.

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