Australia Economic Strategy Report Australia Economic
Strategy Report
Chapter 7

Implementation Strategies

Previous chapters have focused on the myriad of opportunities
that exist in trade, scientific collaborations and investments in
both countries. The current chapter outlines implementation
strategies that are action points for the government, corporates
and industry associations to realize these potential opportunities.
The strategies are classified into three broad categories –

  1. Resolution of Important Issues with Government of Australia.
  2. Short term: Immediate action points, which are expected to have a direct and immediate impact on trade and investment between India and Australia.
  3. Long term: Implementation strategies targeted towards improving the India-Australia relationship in the long run.

A. Resolution of Important Issues with
Government of Australia

1. Streamlining visa processes

  • Australia currently offers two types of visas for Indian IT professionals in Australia:
    • Temporary Work Short Stay Specialist visa (subclass 400) that enables a person to carry out short term work in Australia (valid up to 3 months).
    • Temporary Skill Shortage (TSS) visa (subclass 482) that enables a person to work in Australia for a period of 24 to 48 months.
  • While there is a requirement for skilled Indian IT staff for projects based out of Australia, there is significant amount of documentation required for visa application, especially for the longer-term visa.
  • Streamlining the documentation requirement for the visa as well as reducing the visa processing time would enable easier movement of skilled staff from India to Australia, which will, in turn, have an impact on the project profitability and timelines of the Australian projects.
  • Currently, there is absence of an ‘intermediate term’ visa with a duration longer than the Subclass 400 visa but shorter than Subclass 482 visa. Introduction of such an intermediate term visa with lesser documentation requirement and shorter timelines for processing would enable easier staffing of skilled Indian IT professionals on short-duration projects of 6 months to a year thereby improving the project profitability and execution speed. This issue needs to be resolved at the Governmental level.

2. Addressing taxation concerns of Indian companies

  • Indian companies have raised concerns over double taxation issues faced by them.
  • Indian IT companies providing service to Australian clients, at times, provide a part of these services using their teams located in India.
  • The Australian Tax Authority (ATO) treats the income earned on these services, as ‘royalty’ and levies taxes on it under Article 12(3)(g) of the Double Taxation Avoidance Agreement between India and Australia. This follows a Federal Court of Australia ruling to treat such payments as ‘Royalties’.
  • Additionally, companies are also required to pay taxes in India as the services are rendered from India.
  • The relevant Ministries in India, along with Indian associations such as NASSCOM, need to resolve this issue with the Australian taxation authorities to facilitate appropriate credits and avoid double taxation.
  • Similar issues faced by Indian banks in Australia, where Indian banks are required to pay withholding taxes in Australia on borrowings from their Indian parent, need to be resolved.

3. Easing out regulations for Indian banks operating in Australia

  • The State Bank of India (SBI) has been denied the status of an Approved Security Provider under the Financial and Performance Management Standards 2009 (FPMS).
  • As per the FMPS 2009, minimum long-term credit rating of A-/A3 from an approved credit rating agency is required.
  • SBI has been denied this status on account of a lower rating of BBB-, which is due to the lower sovereign rating of India and not due to any company specific issues.
  • However, SBI is India’s largest public bank and is only one of three banks recognised as Domestic Systemically Important Banks (D-SIBs) by the Indian Government.
  • Under Section 41 of the FPMS, the Treasurer can provide exceptional approval to SBI as a Security Provider.
  • The two Governments should actively resolve this issue of an approval for SBI since the latter not getting the status of an Approved Security Provider significantly affects funding requirements of new Indian businesses operating in Australia.

B. Short-Term Implementation Strategies

4. Engaging with Australia as a key supply partner in line with India’s Critical Minerals Strategy for 2030

  • The Critical Minerals Strategy for India focuses on identifying minerals that would be essential for India’s resource requirements in 2030.
  • The Strategy has identified 49 minerals that will be vital for India’s economic growth, of which Australia has reserves of 21.
  • Indian companies and Government should evaluate entering into offtake agreements/ investments/ joint ventures with Australian mining assets / mining companies to secure access for India’s critical mineral requirements.

5. Investing in existing mines and resource exploration projects in Australia

  • Australia offers several investment opportunities for mining of resources such as coal, iron ore, copper, gold ,potash ,phosphate etc. and supports multiple entry options for an entity looking at such investments, including acquisitions, investments with off-take agreements, etc.
  • These investments will assist in securing India’s resource requirements for two of the Indian Government’s largest initiatives – ‘Make in India’ and the ‘National Mobility Mission’
  • India should invest in mining and exploration projects either independently or through partnerships to secure access to these resources.

6. Developing funds to promote Entrepreneurship, Humanities and Social Sciences, Start-ups across both countries

  • Australia India Strategic Research Fund (AISRF) is an example of a successful research fund set up between India and Australia. Both countries should further commit to contributing USD 20 million (AUD 29.8 million), each over a period of five years.
  • On the lines of AISRF, joint funds should be set up between the two countries for the following:
    • A joint Start-up and Innovation Fund with a contribution of USD 10 million by each country over five years
    • A joint research fund to promote the humanities and social sciences sector with a contribution of USD 10 million by each country over five years
  • Further, under the Start-up India programme, joint entrepreneurship programs for start-ups should be organized and facilitation centers such as research parks, incubator precincts, etc. should be established to provide a boost to the start-up environment. Australia has a precedence of successfully establishing such precincts and can collaborate with the Indian Government in this regard.

7. Encouraging investments by Australian Super Funds

  • The Indian Government should engage with Australian super funds to encourage investments in Indian infrastructure projects.
  • This will require conducting awareness initiatives in Australia to provide information on regulatory policies in the country, execution potential of the projects, returns on investments, tax structures, etc.

8. Enhancing cooperation and research collaboration under the Scheme of Promotion of Academic and Research Collaboration

  • The Scheme for Promotion of Academic and Research Collaboration (SPARC), an initiative of the Ministry of Human Resource Development (MHRD) of India aims at upgrading the research capabilities of India’s higher educational institutions by enabling research collaborations between Indian and foreign Institutions.
  • Top 500 universities from 28 nations (including Australia) will be selected for such research collaborations.
  • This Scheme supports various areas of development of research environment that include facilitating visits by international faculty to India, organising visits by Indian students to international universities and joint development of courses.

9. Setting up a Sports University in India

  • India should work with Australia to set up a sports university to support the development of diverse sports and to improve access to infrastructure / sports-related specializations for upcoming athletes and students in India.
  • This proposition was included in the Joint Statement made by the respective countries’ Prime Ministers in 2015.
  • A cohesive action plan should be initiated by the Ministry of Youth Affairs and Sports in India, in correspondence with the relevant Australian universities and institutions.

10. Collaborating on Phytosanitary measures

  • Inadequate understanding on Australian sanitary and phytosanitary (SPS) regulations is negatively affecting India’s export potential for agricultural products. Indian agencies can work with Australian counterparts to communicate and educate Indian exporters and corporates about the Australian requirements in this field so that they can gain access to the Australian market.
  • Indian companies should seek assistance from Australian agencies in understanding and meeting the SPS requirements of Australian markets for identified products. A mechanism to facilitate an increase in Indian agriculture and marine exports to Australia should be initiated by the two governments.

11. Re-establishing the MoU between India and Australia for cooperation on tourism

  • The MoU was signed between the two countries for tourism in 2014 which has now lapsed and should be re-established to encourage partnerships between the two countries.
  • Under the MOU, Australia and India shared information on tourism policy and encouraged cooperation between stakeholders involved in the tourism sector in both countries. A joint Australia–India working group (JWG) on tourism met across cities such as Sydney and New Delhi to discuss visas, aviation links, traveller safety and opportunities for collaboration on tourism research.

12. Encouraging participation of Australia under Study in India

  • The ‘Study in India’ program was announced in the 2020 Union Budget of India in order to attract foreign students to Indian universities.
  • The program aims to offer seats in select reputed Indian universities and Institutes via fee waivers and scholarships to meritorious students.
  • A centralized web portal has also been launched to facilitate single-window admissions of foreign students to more than 160 private and public Indian universities.
  • This program can also be extended to include Australia in order to increase inflow of Australian students to India.

13. Regular interaction between Indian and Australian defence industries via exhibitions in the respective countries, industry associations etc. should be encouraged. Regular meetings of joint working groups should also be held. Visits by team experts of Australian shipyards to Indian shipyards can also be held.

C. Long-term Implementation Strategies

14. Encouraging partnerships on mining with Australian institutions

  • Indian institutes / corporates and Government bodies should encourage partnerships with Australian institutes to facilitate joint research and training and knowledge transfer programs in the following areas:
    • Mine safety and technology applications
    • Mine exploration and mapping in India
    • Student exchanges between Indian institutes such as IIT-ISM and Australia’s mining universities
    • Encouraging two-way consultation programs for specific mining applications and issues

15. Collaborating on curriculum development, vocational education and training

  • Australian Technical and Further Education (TAFE) and other Australian bodies such as Australian Curriculum, Assessment and Reporting Authority (ACARA) and Australia Institute for Teaching and School leadership (AITSL).
  • Mutual recognition of recognition of Academic Qualifications in Higher Education should be considered by both countries.
  • Indian institutes such as National Council of Educational Research and Training (NCERT) and National Assessment and Accreditation Council (NAAC) should collaborate with Australian institutes such as Tertiary Education Quality and Standards Agency (TEQSA) as well as regional educational boards such as Study Adelaide, Study Perth etc. for curriculum development programs.
  • Indian agencies such as National Council for Teacher Education (NCTE) should collaborate with their Australian counterparts to exchange teaching tools, methodologies and to share teacher training resources.

16. Setting up a specialized Agri-university/Agri-universities in India

  • India should leverage Australia’s experience and expertise in agriculture by encouraging Australian institutions to set up a specialized agri-university in the country or assist with upgrading existing agri-universities in India.

17. Scaling up Australian med-tech start-ups in India

  • Australian has innovative med-tech start-ups that should be invited to operate in India.
  • India provides a competitive market for Australian start-ups. Indian companies could explore partnering with Australian start-ups and supporting them with funding requirements for large scale commercialization to target global markets.
  • This could be done by way of signing MoUs between Indian and Australian companies as well as setting up med-tech parks.
  • Additionally, Australian companies and start-ups should be encouraged to access infrastructure provided by med tech zones in India.
  • A pharmaceutical group involving representation from the Departments of Pharmaceuticals in India and Australia should be set up to discuss potential partnerships between Australian and Indian companies and attracting investments by Australian companies into India.

18. Setting up medical tourism infrastructure in India

  • To promote Indian medical tourism in Australia, the Indian Government should establish a medical tourism framework with support infrastructure to ensure a comfortable stay for Australian visitors who come to India for procedures such as dental care, major and minor cosmetic surgeries, etc.
  • Large private hospitals, in collaboration with the Indian Ministry of Tourism, need to develop a one-stop service that will provide travel, lodging, cashless direct billing, efficient customer service and post-hospital care for Australian medical tourists.

19. Adopting Australia’s best practices in Tourism

  • India’s tourism bodies such as the India Tourism Development Corporation (ITDC), set up by the Ministry of Tourism, should enter into a collaborative arrangement with Tourism Australia to adopt best practices and strategies for promoting India as a tourist hub, both in Australia and in the rest of the world.
  • In addition, this collaboration should also involve upgrading regional tourist campaigns in India.

20. Addressing common challenges in areas such as Water Management

  • There is a need to encourage collaboration on research programs with Australian agencies such as International Centre of Excellence in Water Resources Management (ICEWaRM), CSIRO, etc. on common water management challenges faced by India and Australia.

21. Both governments can jointly sponsor design and development of niche technologies in Artificial Intelligence applications and for modular construction for ships and submarines

D. Facilitative Recommendations (Timeline: Short term)

22. Setting up a coordination mechanism through a consultative inter-ministerial approach

  • There should be a joint team led by the Ministry of Commerce and Industry and the Ministry of External Affairs at the senior officials’ level, overseen by the Minister of Commerce and Industry along with appropriate representation from other ministries and chambers of commerce. A follow up mechanism should be built in to launch, adopt and publicize the report amongst key stake holders including State Governments.
  • Budgetary support should be extended by the Ministry of Commerce for developing the report, including dissemination of the contents of the report both in India and Australia, and drawing up a time table over the next two years for the implementation and utilization of the report.
  • A review mechanism between the Australian and Indian Governments to jointly oversee the implementation of the Australian and Indian economic strategy reports in both countries over a six-month basis at the senior official level from the Ministry of Commerce and Industry and The Ministry of External Affairs with appropriate representation from other Ministries is required.
  • The report should be launched and publicized through a series of events organized by CII.

23. Commencing direct flights

  • Direct flights between Indian cities such as Mumbai, Bangalore, Hyderabad, Chennai, Kolkata etc. to Australian cities like Sydney, Melbourne, Perth, Brisbane, Adelaide, Darwin, etc. will be a key enabler to improve tourism, business and trade relationships.
  • Direct flights would significantly improve the bi-directional flow of tourists between the countries.
  • India could be an ideal transit destination for Australian visitors, travelling to European countries, which will also benefit Australian airlines.

E. Other Measures

24. The Indian Consulate presence in Australia should be increased with new Consulates in Brisbane and Adelaide.

25. India should restore the office of the Ministry of Tourism in Australia.

26. Presence of offices of business associations, such as CII, should also be increased in cities other than Melbourne and Sydney. Australia India Business leaders
forum should be reactivated and should meet regularly with a specific agenda, and discussions between industry clusters should be held twice a year – once in India and once in Australia. Also, Indian Chambers of Commerce, the Indian High Commission and the Consulates must engage actively with all chambers of commerce in Australia including Business Council of Australia (BCA).

27. Explore the possibility of a Free Trade Agreement (FTA) between India and Australia.