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Australia: ’India’s financial sector interests us’

Eocnomic Times | 24 Jan 2008

’India’s financial sector interests us’

Amiti Sen & G Ganapathy Subramaniam, TNN

The new Australian government would forge closer relationship with India and take the partnership forward in key areas like energy infrastructure, agriculture and food processing, feels Simon Crean, Australia’s minister for trade.

“My visit to India soon after the new government took over (in December) is a clear indication of the shape of things to come”, Mr Crean told ET. Excerpts from the interview:

How are talks on a possible free trade agreement (FTA) between India and Australia progressing?

The Indian government has suggested that we study the possibility of an FTA. We are very keen to respond positively to that. We want the pact to be comprehensive and include services and investment as well. We want to use the opportunity to not just get the framework right but to build and deepen relationship between the two countries.

Trade growth has been strong but can be much stronger. We also want to work with the Indian government to achieve a successful outcome in the Doha round. Success at the multilateral level will be the big break.

How are you planning to proceed with the FTA or CECA?

We are undertaking a feasibility study which will identify the benefits of the pact for both countries. Thereafter, if we decide to proceed, we will get into negotiations and set the timelines. The agreement should be comprehensive and should cover all sectors.

We understand that there are some special products and special circumstances that India needs to take care of. We have to talk about that. It should be an agreement which covers all sectors and in particular manufacturing and service sectors which provide the greatest opportunities for expanded trade.

You met the RBI deputy governor. What discussions did you have with him?

We want to see continuing progress in the reforms to your financial service sector. The Australian financial sector is very keen to get involved in banking, insurance and management. Australia has particular expertise in this area. We are interested to see how the government proceeds with the next phase of reforms in the financial sector that are due to be considered before 2009. This was the timetable that the Indian government had set for itself.

Are there any Australian banks scouting for greater opportunities in India?

We have four big Australian banks and all of them will like to expand their presence. At the moment they are limited in what they can do, because of the regulatory environment. ANZ Bank is seeking a licence and has submitted an application. Commonwealth Bank is also interested.

On the multilateral front, what are the chances of a successful conclusion of the WTO’s Doha round of talks?

If the Doha round has to be successful, it requires political will. We would be very keen to work with the Indian government to understand the nature of their concerns and how they can be addressed.

Australia is keen to see progress in all sectors be it agriculture, manufacturing or services. India clearly wants an outcome. We want to use the opportunities which our bilateral relationship provides to see if we can address multilateral concerns.

Why is it taking so much time?

Doha is a much more difficult round than Uruguay. It is a development round. It has got in excess of 150 countries. Therefore, if there is to be an outcome - and we believe there must be an outcome in the interest of global trade and the economic prosperity - it is going to depend very much on how the groupings, the alliances function and interact.

We chair the Cairns Group. India is a vital member of the G-20. So we should try and use the strength of the bilateral relationship, not just as an end in itself to promote just two-way trade. We should also use it to strengthen the partnership for the success of the Doha round - bigger objective, a bigger game.

Did the Indian leaders you met seek to know Australia’s position on supplying uranium to India?

The issue of uranium and its supply has not been raised by the politicians with me so far. Special envoy Shyam Saran went to Australia not to raise the issue of supply of uranium but to raise the question of better understanding by Australia of the position in relation to the 123 Agreement. We have, as a result of that effort, got a better understanding as to what it involves.

 source: Economic Times