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Tuesday, 3 May 1994
Page: 12

Senator CHRIS EVANS —I direct a question to the Minister for Trade. I note that the minister recently launched a report entitled India's economy at the midnight hour: Australia's India strategy. Can the minister comment on this report and the implications for the growth of Australia's trade with India and, indeed, the broader Indian Ocean region? On a parochial note, what opportunities does the minister see for Western Australia in this `Looking West' strategy?

Senator McMULLAN —I am shocked that Senator Chris Evans should inject a parochial note into these matters of great international moment, but it is very important for Western Australia, and I hope to have the opportunity to return to that part of the question in conclusion. The study that was launched last week is really the first and most comprehensive study undertaken in this department about prospects for trade and investment with India, and it highlights some very substantial and potentially very important commercial opportunities.

  The Indian government has been very courageous in its economic reforms, and the prospects are that as a consequence of those reforms there will be a substantial degree of economic growth in that already very large economy. When one gets projections of economic growth of six per cent plus in an economy the size of India's, with a middle class of 120 million people already, one realises that one is creating new demand of enormous proportions and, therefore, an opportunity for Australia and Australian business to succeed and to make significant increases in our trade.

  In launching that report, the ambition we have set for ourselves—which I think is a legitimate one and which is raised in the report—is to take our current share of three per cent of India's total imports and raise it to 3.5 per cent over the next five years. That does not sound like a big increase, but one should realise that it is a proposal at a time when it is expected that India's imports will double, with the growth being emphasised in areas that are not Australia's traditional strengths in its trade with India. So we will need to work very hard to achieve that objective but, if we do, Australia's exports to India will increase by more than $1 billion in that five-year period. That is the magnitude of the potential that exists.

  The launch of the report highlighting that significant aspect fits in very well with the potential trade opportunities not just in India, but in the Indian Ocean region. It reflects the need for us to look west across the Indian Ocean in our trade policy and promotion efforts, not just to India and the subcontinent but to the Middle East and Africa, particularly southern Africa.

  This does not mean we should shift our focus away from north and South-East Asia, an area of our economic activity that we have given so much attention to, because that will remain our most significant trading relationship, but it is an important and new area of attention. India is at the centre of this region—it is the most powerful economy in the region—and it has emerging demands for infrastructure projects, telecommunications, processed foods and a wide range of services to which Australian business has the capacity effectively to contribute. If we can achieve our objectives, I think we will make a very substantial contribution to our economic growth.

  It is particularly important for Western Australia. One-third of our exports to India now are sourced from Western Australia. The commercial relationship between India and WA is solid and in good shape. The report recommended the identification of Perth as the gateway to India. While it is not for the government to determine what is the gateway to India and which companies should operate and focus on which markets, the opening up of the Indian Ocean and the Indian Ocean trade links and the recognition of Australia as a two-ocean nation—which is too often underestimated—is a very important opportunity for Western Australia. With trade missions, seminars and other promotions, the government has every intention of seeking to give priority to this Indian Ocean region as a new element in our strategy. It has every intention of encouraging all Australian businesses, particularly those with a western orientation, to focus on the potential there. It has an enormous capacity to contribute to our overall trade balance and our economic success.