BY Amanda Hodge
South Asia Correspondent, New Delhi
TRADE Minister Andrew Robb says he will keep returning to New Delhi this year until negotiations over a free trade agreement with India, the fourth under his tenure, are concluded.
Mr Robb finalised a free trade agreement with China last year, as well as deals with Japan and Korea, but told The Australian he did not underestimate the difficulties in resolving sticking points over easing India’s tight agricultural industry protections and investment barriers.
“Every negotiation is different and I am only at the start of this one,” he said, adding that closing the deal with India was his “No 1 priority”.
“I went to China nine times and also met my counterpart elsewhere in the world on other occasions,” he said. “We had a lot of contact. During that time I was also negotiating Japan and Korea and maintaining a similar level of personal contact.
“All of the things (now being said about the Indian negotiations) were said about China; ‘They won’t give ground on anything, they might sign an agreement but we will be taken to the cleaners …’
“It was not a walk in the park but I do feel if you keep turning up you stay top of mind and if there are issues and you treat people with respect and keep coming back to try and resolve those issues, more often than not you succeed.”
Mr Robb is in India this week leading Australia’s largest ever business delegation of 450 business representatives across 14 sectors, including mining, tele-communications, education and training, health, water management, pharmaceuticals, sport and tourism, though it is the energy sector that has attracted the delegation’s biggest names.
Mining heavyweights Sam Walsh of Rio Tinto, Hancock’s Gina Rinehart and Woodside’s Peter Coleman have all joined this week’s tour, alongside green energy companies and smaller miners seeking a foothold in India’s notoriously difficult coal sector — reflecting Australia’s ambitions to become India’s primary energy fuel provider as it seeks to roll power out to 90 per cent of its population.
Two-way trade between Australia and India stands at just $15 billion a year, compared with $150bn between Australia and China.
Under the FTA with China, 95 per cent of Australian goods exported there will be tariff free.
While Beijing and Canberra negotiated a deal over 10 years, FTA talks with New Delhi began only in 2011.
Six rounds of talks have since been held on further liberalising and broadening the base of merchandise trade, removing non-tariff barriers and encouraging investments.
But after almost four years of often difficult negotiations with the former United Progressive Alliance government, led by the left-leaning Congress Party, India’s business-friendly Prime Minister Narendra Modi’s stated desire to sign off on an FTA deal with Australia before the end of this year has sparked optimism in Canberra.
Mr Modi has spent a good deal of time since his election in May last year talking up India’s new business-friendly climate and his “Make in India” initiative.
Just yesterday his finance minister, Arun Jaitley, told an Invest in India summit in Mr Modi’s home state of Gujarat that the government was committed to providing stable policy for foreign investors and stepping up public investment in infrastructure and manufacturing to help lure public private partnerships.
Much depends on how much political force Mr Modi can wield against a parliamentary opposition determined to stymie his intended reforms of the land acquisition act — currently skewed in favour of poor landholders — and ease regulatory barriers to foreign direct investment.
In recent weeks Mr Modi has signed numerous ordinances lifting barriers to trade and investment to signal to the market his commitment to improving India’s notoriously restrictive and bureaucratic business climate.
But they are temporary measures that must eventually pass through parliament to have lasting impact and are unlikely to spur action among many big investors still waiting to see whether Mr Modi has the clout to follow through on his liberalisation agenda.
“A lot of it is a question of how long it takes to wind back protections,” Mr Robb said of Australia’s negotiations.
“We have to make some serious progress on tariffs and on the investment side but I am really quite excited at what can be achieved because of the strong support of both prime ministers and I think if I keep coming back — as I intend to — we will work through the difficult issues.
“The pre-conditions for finishing this year are certainly in place. Prime Minister Modi indicated to me directly his absolute intent on this.”