Speech to the Australia-India Chamber of Commerce

I should thank the Indo-Australian Chamber of Commerce for hosting this meeting this evening and it is a great honor and a great pleasure to meet so many of you here tonight.

It is a pleasure to be in India, this time entering through its Southern gateway. I have to confess to being a bit of an Indophile myself. I first came to India when I was seven years old when I was in Calcutta. I have been to many other parts of the country and to Chennai once before, which was a transit stop. And so I am delighted to have the opportunity to spend a bit of time here today. India is such a wonderful and such an exciting country and one of the truly great nations of the world. I always get a lot out of it whenever I come here. This morning for example, we visited the Shore Temple; it's enriching being exposed to such examples of Dravidian culture and Tamil civilization.

Coming to Chennai, as I do, in the aftermath of the tsunami- I just want to take a moment to express my sympathies and the sympathies of the Australian government to the families of all those in Tamil Nadu who lost their lives. And my admiration for the courage and determination with which many ruined communities resolved to rebuild their lives. And I said this to the Chief Minister this morning. And I know that in saying this to her and to you, I think I speak for all Australians.

Let me tell you a little bit why I am in India and then about why I happen to be in the South of India.

Australia and India have a strong, and, what you might call, a traditional relationship. We are both members of the Commonwealth and so as a result of that -that tells you something about the common history that we have. We are both democracies. Australia is the world's sixth oldest continuously operating democracy. India is the world's largest democracy. We both speak English and we both play cricket. And we enjoy our cricket. In fact, being in this city here today, it reminds me of some great cricketing moments in the Australia-India relationship which have taken place in Chennai. And judging by discussions with some of your corporate leaders, I think it's probably best to say that you believe in Tamil Nadu that you play the best cricket in India.

But quite apart from our traditional links, India is currently becoming more and more important to us.

First, India is a more important country, these days, both globally and regionally. That is a product of India's strong economic growth resulting from economic reforms which took place since 1991. But also, its skillful external policies it's pursued in the last few years and then attracting in the process both global attention and global respect. This is testified to by the successes of recent visits to India by senior officials from China, Japan and the United States.

Second, India's economy will continue to grow with few observers doubting its capacity to grow at least 6 percent per annum. And I think in Tamil Nadu, your economy is growing at a greater rate that that; that's around 8 percent according to the Chief Minister. And I think it's possible that the Indian economy overall, could grow at a faster rate than it is at the moment.

Third, India is increasingly expanding its interests and also its diplomatic reach into Australia's areas of particular economic and strategic interest, mainly North East Asia and South East Asia.

India, in other words, simply matters a lot more to us today than it did decades ago.

Let me talk to you, as business people, about why India does matter so much.

We, as Australians, are a trading nation. Australia's trade in goods and services is valued at 1 per cent of world trade, which is about the same as India's. This year India became our sixth biggest export market, overtaking the United Kingdom as an export market.

The five year trend in growth of our exports to India is about 25 per cent per annum and in the year to the end of 2004, total trade with India grew by over 62 per cent.

The natural complementarity between the Australian and the Indian economies gives the economic relationship between the two countries room to grow further.

That is why our two Trade Ministers, Mark Vaile and Mr Nath, agreed to negotiate a Trade and Economic framework in Sydney, when they met a couple of weeks ago.

The strongest prospects for future trade and investment between Australia and India are commodities and services.

Australian energy resources such as coal and associated technology and infrastructure, copper and other resources fuel India's growing economy and are important and growing components of the bilateral economic relationship.

We can offer advanced technology and services to contribute to India's continued economic expansion and India stands to benefit very substantially, from Australian investment. Particularly in the areas of energy resources, infrastructure development, agricultural services and food processing.

How do we see the South of India?

Well, Australian companies are becoming increasingly interested in South India, with its high rates of growth and as a large and growing consumer market with high disposable incomes. And Australia's official presence is growing to help advance our interests here.

The Australian Government's export promotion and marketing arm, Austrade, has had an office in Chennai since 1996. This is currently expanding and will include a sharing arrangement with the state of South Australia. Queensland has opened an office in Bangalore and the state of Victoria plans also to do so.

Tuticorin and Chennai in South India are the closest Indian ports to Australia and handle most of Australia's exports of pulses, coal and fresh produce.

The South has relatively better infrastructure ... that can assist Australian perishables to penetrate into interior markets.

Due to a relatively higher level of industrialisation in the South, there will be a growing demand for energy that has been met mainly by coal - some of which, by the way, is imported from Australia.

-LNG terminals (Liquefied Natural Gas Terminals) are being planned near Chennai and Cochin.

-General Motors in India is sourcing engines from General Motors Holden in my hometown of Adelaide.

-Ford India's new car project, we are told, is entirely designed and engineered in Melbourne.

-There are more opportunities for Australian auto companies in India than ever in components, technology, tooling and other after-market products.

South India is also headquarters to India's largest retail chains such as Metro Cash and Carry, Dairy Farm International, Food World, Nilgiris and so on.

-With Foreign Direct Investment likely to be allowed soon in the retail sector, and I very much hope that it is going to happen, we expect that the Australian retail industry will enter into ventures here.

Our food industry is increasingly conscious of the opportunities that are available here in southern India.

Of course, South India is rightly famous for its software and IT industry. With nearly 25 Indian IT companies in Australia, including, for example, Infosys from Bangalore, Satyam from Hyderabad and Polaris from Chennai, there are opportunities to take up joint development work and for Indian companies to market Australian ICT products in India and third country markets.

South India accounts for over a third of the 21000 Indian students who studied in Australia last year. Now this number of students, 21,000 may not sound very many to you, but this number is growing every year.

In addition there are a number of Australian Universities which are exploring twinning opportunities with Indian Universities as well as establishing a direct marketing presence.

And I am told that Tamil Nadu has a vibrant film industry, apparently known as "Kollywood". Never heard of that one before but I'll take that home to Australians. We have heard of "Bollywood", now I've heard of "Kollywood" and I gather there is "Tollywood" as well. But anyway, around here, there is "Kollywood" and it's known for making technically superior films and I'm pleased to note that ... some of them have been shot in Australia. I think I'm right in saying that something like 40 Indian films have actually been made in Australia.

So my point is that Australians see enormous opportunity and great promise here in southern India and we would like to do more with you in the months and years ahead.

Now, I want to acknowledge the work that you as Indian business people have undertaken, to further our economic links just as I would like to thank the Australian Studies Centre at the University of Madras for its interest in my country, and Mr. K. V. Mathew, President of the Indo-Australian Association, for all he has done for our relationship.

As Australian Foreign Minister I would simply like to say, thank you to all of you who have been involved in building a relationship between our two countries.

Millions of years ago, South India and Australia were part of the same land mass, the great land continent of Gondwana.

Now it's separated by the continental drift. Now we are going to have to do a bit of reversing of direction in the years ahead.

Well, I'm sure with all those historic ties that we have, with the common institutions that we have in the countries and now with the burgeoning Indian economy, that our relationship will become more than closer.

I really think you'll find that Australians are getting increasingly excited about building links with India.

I just want to end with one brief comment, and that's this, that during our lunch today, I was asked what Australians perceptions of India are. What do Australians think about India? I thought I might pass this on to you more generally that I think Australians have a very positive perception of India. I think Australians see India as a free country, they see it as a democratic country and they see India as a country which in lots of different ways has been involved in the Australian story. And we see India as a partner and a country we can really build relationships with in the future.

So, it is a great pleasure that I am here and thank you very much for having me.

Question and answer session:

Question: When do you think will you have a direct flight link from Chennai to Australia?

Minister: Well, I'm not saying to you that the direct flights between India and Australia are too limited, and we need to encourage the airlines to take up the opportunity that the air services agreement between Australia and India provides... I think the fact that we only have one direct service between Australia and India, which is through Bombay or Mumbai, and that's pretty disappointing. When I was a child, we had more Qantas flights coming to India than we have today. I'd like to see that reversed and obviously there is a very strong argument for there being a direct service to Chennai as well as to Mumbai and no doubt to a lot of other places in India as well. And you know, as the student numbers grow, the tourism numbers grow, the business links expand and then inevitably the demand in the air services will increase and the air services will begin to grow. So, I hope that will happen before too long.

Question: (inaudible)

Minister: Look, I'm not.... I'll ask the High Commissioner to say something about this because I'm not sure about there being any problems with the longevity of the business visas. But if there are, then of course that's always something we will have to look at.

Just to get the High Commissioner to say a little bit more, to try to let a little bit more of business visas but I do get the impression that he has been asked this question before.

High Commissioner: We are aware of this issue that ... I would argue that the speed of issue of visas and the lack of visas has been considerably improved over the last two years. What we are ready to propose is that members of our Immigration Office come down here again to Chennai to look at what more can be done to improve visa issues, including on the basis of recommendations from the Chamber or other reputable and significant organisations. That is a work in progress, we'll do it better and faster. We appreciate the problem.

Q. We'd like to know the earliest opportunity of opening a consulate in Madras for the benefit of students and the business community....?

Minister: I take your point on the board. I'll be frank with you; the High Commissioner has already raised this with me and its something that we are having a look at. We of course already have Austrade here and the Australian Trade Commission Office and I think they're doing a very good job indeed. I am advised that the Australian Trade Commission Office here has been awarded the prize for the best in the region. So that is quite impressive. But having said that, obviously to have a Consulate would be to put more resources in here and we'll have to weigh that out against other competing demands for resources. But as I see - let me make this broad point to you - as I see the relationship with India now expanding so quickly. And my prediction is that it will continue to expand at a very high rate. I think the demand for a Consulate here will grow, and I can see a time in the future when we certainly will have a Consulate General and a Consul as well as a Trade Commission Office here in Chennai.