Josh Wilson (Fremantle, Australian Labor Party) Share this | Hansard source

by leave—Like the member for Wannon, I'm really glad to make some remarks on Report 202: Australia-India Economic Cooperation and Trade Agreement from the Joint Standing Committee on Treaties, which recommends that Australia ratify the agreement. Indeed, that's already occurred, and the enabling legislation has passed through the House. It's a very significant agreement, as the member for Wannon was saying, and I acknowledge that he was the minister in government when the agreement was signed.

It's the first agreement of its kind in 10 years that India has settled with a developed nation like Australia. It does include most favoured nation clauses, which will have the effect of ensuring that, when India settles some other trade agreements that it has under contemplation, Australia will have the same kinds of benefits that might be extended to Canada and other nations, in addition to what's been achieved by this agreement.

It has been referred to as an 'early harvest' agreement. It's called an economic cooperation and trade agreement rather than a full-blown free trade agreement, and that is in acknowledgement that there's a fair bit more that can be achieved. But it is significant, and that's because India is incredibly significant on its own terms in our region and globally—but particularly for Australia. India's currently the fifth-largest economy. There's some speculation that it could overtake Germany in the course of the next year or so to become the fourth-largest economy. There's no doubt that it will become the second-largest economy in due course; it's just a matter of time. It's already the second-most populous country and will become the most populous country.

The scale of India's market and economy is therefore enormous, and so the opportunities for Australian investment and export in goods and services are enormous. At this stage we have barely tapped the potential. India is, I think, our seventh-largest two-way trading partner, and there's a lot of upside in lots of areas. One example would be wine. We did have wine exports to China that were in the order of $1 billion annually, until China decided to shut that particular door. After a long, painstaking effort by wine producers and exporters in Australia, the quantum of our exports to that market still sits at only about $20 million per annum, so that gives you a sense of just how much it could grow.

There are some other things about India that are significant, in relation to the nature of its population. I'm sure that people who have an interest in this trade agreement and our economic relations with India would have paid regard to the An India economic strategy to 2035 report that Peter Varghese produced in 2018. That speaks to the specific characteristics of India as a nation, in addition to its scale, that make it significant. From that report:

The drivers of Indian growth are deeply structural which suggests they are also sustainable. They include the urbanisation of the world's largest rural population, the gradual movement of the informal economy, currently comprising 90 per cent of India's workers, into the formal economy, a young demographic with a mean age of 27, considerable investment in infrastructure, and the beginnings of an ambitious program to upskill 400 million Indians.

That gives you a sense of how the growth that India currently experiences—somewhere in the order of six to eight per cent per annum—can be expected to be maintained for the next 20 years. The fact that they have a relatively young and unskilled population gives them some very, very significant productivity upsides but also creates some opportunities for us.

Obviously, our two key service exports are tourism and education. People often think of education in terms of university education, but it includes the TAFE sector as well. India is already a significant participant in both of those, particularly education, but the scope for that to grow is really enormous. The Varghese report suggested that we could see inbound tourism from India quadruple by 2035 to 1.2 million visitors annually. That would be really significant.

As the member for Wannon mentioned, there is a structural complementarity between the Australian economy and the Indian economy. Again, I'll quote from the Varghese report:

Scale encourages ambition but it is the structural complementarity between the Indian and Australian economies which is the key to translating ambition into opportunities. Put simply, a growing Indian economy will need more of the things Australia is well placed to provide from education services to resources and energy; from food to health care; from tourist destinations to expertise in water and environmental management. Indeed services are likely to be the fastest growing segment of our future economic relationship with India.

That's very welcome. It's quite an achievement for us to have service exports like tourism and education, but we need them to keep growing and becoming stronger over time.

It's timely to make a contribution to this debate when, as the member for Wannon said, the Prime Minister is in India. It's a sign of our commitment to strengthening and advancing that relationship. The relationship doesn't just consist of an economic or trading relationship; obviously, there have been very significant people-to-people links for a long time, and they are also growing. India is not only a significant source of income and tourists but also a very significant source of migration. In most state and territory jurisdictions, India is the largest or the second-largest source of incoming migrants presently, and that's only going to make those links stronger.

There are challenges in investing in and trading with India, and they haven't all been overcome through this agreement. India has a history of being wary of the impact of liberalisation, and that continues. The fact that this is the first agreement of its kind with a developed country in 10 years tells you a little bit about that. It's also the case that India, like Australia, has a federal structure, and so to some degree businesses operating in India and wanting to export into India have to manage regulations and requirements at both the national level and the state level. Some of those are difficult to deal with through agreements like this, which are negotiated and settled between the two national governments.

There's no question that we have a lot to gain from a stronger economic, social, people-to-people, diplomatic, development, assistance, regional cooperation, disarmament and peace relationship with India. They are already one of the most significant nations in the Indo-Pacific. We perhaps don't talk enough about India and Indonesia with the Indo-Pacific because of the extent to which we talk about China, which is understandable up to a point. But we need to maintain our focus looking west; I say that as a Western Australian on the Indian Ocean coast. The more we can explore and strengthen the existing and future potential parts of our relationship with India, the better it will be for Australia's national interest.

I'm grateful for the opportunity to speak again on this report. I welcome the recommendations that it made. As I say, we have already ratified the agreement and the enabling legislation has already passed the House.

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