New Delhi: Australian Prime Minister Julia Gillard Wednesday aimed to rescript economic and strategic ties with India—previously strained by Canberra’s refusal to sell uranium and attacks on Indian students studying there—identifying Asia’s third-largest economy as one among “a handful of countries that matter most to Australia.”
Describing India as a “great democracy in Asia”, Gillard, who is on a three-day visit to India said “for Australia, our goal is that of a partnership with India which reflects your standing along with the US, Japan, China, Indonesia and the Republic of Korea.”
Noting the economic changes in Asia as a whole and seeking greater economic engagement with India, Gillard said India and Australia had set the target of doubling bilateral trade to $40 billion by 2015. In 2011-12, bilateral trade had grown by 13% to $20 billion largely in Australia’s favour given that Indian imports consisted of coal and other raw materials to fuel economic growth.
In bilateral investments, however, approvals for proposals from India had touched $11 billion in Australia, “a 100 fold increase from 10 years ago”, Gillard told a business meeting where India’s diversified GVK group, through its subsidiary Hancock Coal Infrastructure Pty. Ltd, signed a construction contract with Samsung C&T Corp., a subsidiary of the Korean conglomerate Samsung and Australia-based Smithbridge Group Pty. Ltd to build a terminal port for the Alpha Coal project in North Queensland. The “pit-to-port” project is being built at a cost of $10 billion. The first phase of the project involves a 30 mtpa mine, a 500km railway line and a 60 mtpa port, a GVK statement said.
The tone and tenor of Gillard’s present visit is a far cry from a visit in September 2009 when she as deputy prime minister and minister for education aimed to calm frayed nerves in India over a spate of alleged racial attacks on Indian students studying in Australia.
Ties were also strained over Gillard’s Labour Party refusing to consider uranium sales to India without New Delhi acceding to the nuclear non-proliferation treaty.
Both issues have now been sorted out with Australian authorities enhancing security for Indian students in Australia and the Labour Party in December overwhelmingly voting to overturn the longstanding ban on sales of uranium used as fuel in civilian nuclear power reactors to generate electricity. Australia is believed to have 40% of the world’s known uranium reserves but it sells uranium only for power generation under strict conditions.
Acknowlegding the ban on sales of uranium to India was a “barrier” in ties, Gillard said “Australia has opened the door for uranium sales to India....I look forward to discussing the next steps for our peaceful nuclear cooperation when I meet with Prime Minister Manmohan Singh” later in the day.
Gillard noted that Australia firms had expertise in transport, logistics, mining and environmental services, medical research, education and financial services. “So the next stage of our partnership should focus on collaboration which build on these strengths,” she said. “Our work on a truly liberalising Comprehensive Economic Cooperation Agreement (CECA) will change both of us.”
In the strategic arena, Gillard noted that India and Australia shared common views on cooperation in the Indo-Pacific region and called for closer defence cooperation including joint exercises by the navies in the future.
In his comments, Indian commerce minister Anand Sharma called on Australian businesses to investment in India’s infrastructure sector, which would require $1 trillion in the next five years. Despite the global economic downturn and its impact on the Indian economy, India was still “among the top-three investment destinations in the world” with sound economic fundamentals, he said. India’s manufacturing policy outlined last year allowed the opening of national investment and financial zones that are standalone green field integrated townships. “For the industry, the good news is the delays will be cut out and the ease of investing will be much more with a single window “ for clearances.
Giving a boost to strategic cooperation between the two countries, the two sides on Wednesday announced they would launch talks on civil nuclear cooperation that would pave the way for the sale of uranium by Australia to India.
A joint statement released after the talks between the Prime Ministers said this was a “prerequisite for uranium sales to other countries” by Australia.
The Prime Ministers welcomed the announcement that Air India would commence direct flights to Australia by the first quarter of 2013. To deepen energy security cooperation, the two countries agreed to hold an annual dialogue at the ministerial level, the statement said.