Australia says trade with India to be driven by economic reform
Press Trust of India, February 04, 2014
Australia's ability to trade with and invest in India
will inevitably be driven in part by decisions the
Indian government makes on economic reform and financial
opening, a senior Australian official has said.
Speaking at the 30th anniversary of CUTS International
in Canberra yesterday, Peter Varghese, the secretary,
Australia'sDepartment of Foreign Affairs and Trade, said
India was going through a significant period of change
and its decisions on economic reform and financial
opening were vital for trade and investment.
"Australia's ability to trade with and invest in India
will inevitably be driven in part by decisions the
Indian Government makes on economic reform and financial
opening," said Varghese, the former high commissioner to
India.
"Businesses would know only too well that India's
economy has undergone a protracted slowdown since March
2011, marked by a slump in investment and industrial
output. GDP growth fell to 4.4 per cent in 2012-13. It
is forecast to remain somewhere in the 4.5 to 5.5 per
cent range over 2013-14 and many businesses are adopting
a 'wait and see' approach in the lead-up to national
elections due later this year," he said.
He also lauded Finance Minister P Chidambaram and RBI
Governor Raghuram Rajan for taking positive steps to
address key concerns, including curbing the fiscal and
current account deficits and shoring up capital flows.
He said even though the short term outlook may be below
par, India's strong medium-term fundamentals were
looking optimistic.
"Favourable demographics, prevailing trends of
urbanisation and industrialisation, and room for
productivity gains should enable India's economy to
achieve growth outcomes of 6-7 per cent over the next 20
years or more," he said. "Reaching a high growth
trajectory will depend on India getting its domestic
policy settings right and investing in infrastructure,
skills and institutions," he said.
Varghese said that Australia is well placed to partner
with India on both the infrastructure and skills agenda
and to share lessons learnt on policy reform. "Our key
energy exports also provide the necessary drivers for
further economic development in India, and we are
committed to a long-term, broad based energy supply
relationship."
There are signs that India's federal system is working
to show that good policy can also be good politics, as
more dynamic states compete to create a more favourable
environment for private and foreign investment, he said.
"Efforts by these states to cut through regulation and
bureaucracy, address infrastructure bottlenecks,
introduce tax incentives, and provide easy access to
land and power are leading to above-average growth in
some states, he added.
Elaborating on Australia's economy, he said the country
had comprehensive agreements with many nations and that
talks were on with other economic partners including
India. "All of these efforts are aimed at positioning
Australia at the leading edge of international economic
reform," he said, adding Australia is already working on
a Comprehensive Economic Cooperation Agreement with
India
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