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Speech to open the new Consulate-General in Chennai, India.

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Speech to open the new Consulate-General in Chennai, India 26 February 2007

Consul-General, Mr Aminur Rahman, the High Commissioner to India from Australia, HE Mr John McCarthy, the Minister for Higher Education, the Hon Dr Ponmudi, Mr Vinod Mammen, President of the Indo-Australian Chamber of Commerce, other distinguished guests present here today and ladies and gentlemen.

This is a very great pleasure and a very great honour to be meeting you today and to be participating in the official opening of our Consulate-General in Chennai.

It is my first visit to this city and I have to say I have been impressed by its vitality and its enthusiasm and the optimism of the south of India and for the country as a whole.

It’s said that when people are looking at the world, an optimist sees the best while the pessimist fears the worst.

But there are good reasons to join with the side of the optimists here in India: the economy is about to experience another year of 9 per cent growth and are estimates that the Indian economy could emerge as the world’s second-largest by the middle of this century. There has been sustained period of growth and therefore enormous opportunities for business and for everyone who lives works in these parts.

To borrow from India’s famous tourism slogan, this country’s economic prospects are “incredible”.

And I mean this in the most positive sense because it’s no longer enough to hear about India’s progress; you have to see it for yourself.

Today, many Australian investors understand this and that’s why our Government has opened this Consulate-General as another gateway to trade with India.

Australia has been in this city now for about 10 years through our trade and promotion marketing arm, Austrade. We regard Chennai, and the south of India more broadly, as a very attractive place in which to invest.

Consumer incomes are growing and infrastructure is improving and South India’s economy is expanding rapidly.

A large group of Australian business have been attracted to participate in this business delegation. In fact, some 63 Australian business organisations and companies are participating in this business delegation, one of the biggest delegations that we have assembled to visit another country.

This demonstrates the enthusiasm with which Australia is looking towards its relationship with India. We are experienced in dealing with some of the fastest growing countries and economies over the last century- Japan, Korea, China.

But now Australians find in India a land of opportunity, the place where business will grow and expand. And we are looking very much towards developing and strengthening our relationship. By

opening this Consulate-General in Chennai, we provide a front door to Australia and therefore an opportunity to build and strengthen this growing relationship.

The Tuticorin and Chennai ports are the closest to Australian shores in India and they handle most of Australia’s exports of pulses, coal and fresh produce.

As Australia’s Trade Minister, I see India as very important to our long term prosperity and it is my hope that India sees Australia the same way. To fully appreciate this ambition, can I talk a little bit about the economic and trade relationship and the way it stands at the present time.

India has been Australia’s fastest growing major export market over the last five years.

Two-way trade in goods and services now exceeds 12 billion dollars as you have already heard and India is now Australia’s seventh-largest export destination, taking roughly the same amount of our goods and services as the United Kingdom.

That statistic alone reflects the growing change in Australia’s trade and balance. Most of our major trading partners are now Asian and for that reason, we see our future inextricably linked with the growth of South Asia and East Asia and our determination to build our links with those fast growing economies.

To many Indians and many Australians our growing relationship has gone largely unnoticed. You can’t blame them because the most important thing that Australians know about Chennai is that we play cricket here once every five or six or eight years, and indeed our cricketing relationship is perhaps the thing that’s brought us closest together over a long period of time.

Talks between Trade Ministers and business people are far less significant to the newspapers and others than a visit by our cricketing teams. And what the cricket captains might be saying, or who is sick today, or who is in fact playing well. So that kind of traditional heritage and our links in the sporting field and in a range of other areas provide a wonderful personal basis for our relationship.

But I think that the momentum that we are building now in our economic relationship is creating an entirely different playing field. Long may cricket continue to be played, but for India and Australia, trade is the new game in town.

Growing trade in sectors like resources, education, tourism, information technology services, construction and agribusiness all contribute to the momentum in our economic relationship.

Digging down through these sectors reveals some striking details:

• Australia’s gold exports to India went from almost nil six years ago to more than $ 2.8 billion today; and gold is Australia’s most important export to India. And the remarkable thing of that export is that has created hundreds of thousands of jobs for jewellers in India. This is a classic example of what can happen when a market is freed up and trade is allowed to occur for benefits on both sides. The Australian gold mining industry is growing but hundreds of thousands of jobs are being created in an important industry also in India. • our coal trade is worth over 2 billion dollars US. • in education, nearly 39,000 Indian students enrolled in Australian educational institutions in

the past year, making Australia the number two study destination for Indian students after the United States. Again, the United Kingdom is being relegated to lower places in the pecking order as has happened in the cricket field. • Indian tourist arrivals to Australia grew by 23 per cent in 2006. • Millions of dollars worth of Australian diamonds are sold indirectly to India via Antwerp.

Here in Chennai, Leightons Australia built the Nokia plant and will soon start on the Motorola plant. All of Australia’s major banks are now located in India.

A big driver of this trade is, of course, India’s economic ascent. But we can’t just assume that a rising economy will carry our trade with it. It takes more than economic models to make markets.

In reality, trade often involves painstaking hard work by businesspeople and governments to turn opportunities into commercial reality.

I can tell you that Australia has plenty of this experience to share. We are a trading nation. Australia's trade in goods and services is valued at about 1 per cent of world trade; it's about the same as India’s. We both are at about 1 per cent of the world’s trade.

So, there’s plenty of room to grow. Australia has a relatively small population which means we must trade with other parts of the world; otherwise we would have no hope of developing world-scale industry. On the other hand, India has a very large population and trades with other parts of

the world because of it's enormous capacity to produce goods that would be in demand in other places.

So, I think there is enormous opportunity for us to expand our bilateral trade links. And with our experience with India and our experience with China, that expansion can be rapid and very advantageous to both countries.

The value of Australia’s two-way merchandise trade with China was 6.3 billion dollars US in 1996.

Today it’s US$36 billion. I can’t see any reason why the growth of our trade with India cannot match that experience.

A critical factor in expanding our trade will be energy and resources. Just as East Asia’s rapidly growing economy has been fed by Australian resources, we believe India can look to us also as a reliable long-term supplier as its economy grows. It has been said before that our economies complement each other very well.

India’s projected energy needs and resources requirements are enormous. India is already the world’s sixth-largest energy consumer, and demand for oil, gas and coal is surging.

However, Australia is a net energy exporter. We have 5 per cent of the world’s black coal reserves and we are the world’s largest coal exporter. We have 19 per cent of the proven recoverable reserves of liquid natural gas in the Asia-Pacific region.

Indeed, one of the biggest prospects in our energy trade is LNG and the first cargo supplied to India has arrived in Hazira.

Our current LNG trade has been carried out mainly through spot sales but I know there is strong interest in Australia to become a long term LNG supplier to India.

Although we have many years to go before Australia becomes a substantial LNG supplier to India, it would be wrong to ignore this potential.

It’s important that when we discuss energy, we also think about practical ways to make it cleaner. India and Australia are founding members of the Asia-Pacific Partnership on Clean Development and Climate, or the AP6.

AP6 Partners are working together to better meet increased energy needs and address energy security as well as air pollution and greenhouse gas emissions.

The AP6 approach focuses on practical, technology-driven action, economic development and poverty reduction. It is an innovative initiative that also looks to the power of public-private partnerships to drive growth while addressing climate objectives.

Australia is testing technology to capture and store carbon dioxide from power plants throughout AP6 countries. This will advance the development of power stations that are more efficient, burn less coal and emit less carbon dioxide.

These new technologies create opportunities for countries to secure energy resources and reduce greenhouse gas emissions from the use of fossil fuels.

Cleaner coal technology will benefit India, which will depend on coal for many years; it will also benefit coal exporters like Australia; and it will certainly benefit the world’s climate.

Australia very much prizes its work in the AP6 with India. Between us, we have the capacity with the other members to do something really worthwhile about global warming, and about addressing the greenhouse challenges.

AP6 is not about slogans and documents but about actually achieving real results. Our work together has a real opportunity to help us make a real contribution towards improving the environment for our globe.

Energy is one of the important sectors that Australia and India have identified in our Trade and Economic Framework and I am looking forward to meeting again with my Indian counterpart, Kamal Nath later this week to discuss trade in energy and other ways to further our economic engagement.

Open markets for energy and resources

I know that for India, energy security is a major concern. And for this reason it’s important that we examine our capacity again to work constructively together.

Australia believes the best path to energy security involves efficient energy markets aided by open trade, sound regulatory frameworks for investment and strong regional co-operation.

Trade carried out openly reveals the prices to all players. And a long term contract for energy is the surest sign of how much buyers and sellers value a resource.

Globalisation is a force for good

This approach underlines our confidence in markets. I know that in parts of the West and in India, some people worry about, and even fear, the power of markets and globalisation. That anxiety also exists in Australia.

To these groups, I say that the evidence is overwhelming and it shows that global economic integration can be, and is, a force for good. Can I explain this with an example or two.

Indian winemaker Champagne Indage recently bought Tandou Wines of South Australia, a deal which gives Indage a base in Australia and access to winemaking know-how which can potentially develop the Indian industry.

Indian companies are now exploring for oil and gas in Australia and Indian companies have bought two copper mines and three coal mines in Australia over the past few years.

Similarly, Australian oil and gas major Santos recently won two offshore deepwater exploration licenses in the Bay of Bengal. Australian companies also want the opportunity to invest in India’s mining sector.

Here in Chennai, the Australian manufacturing company Trident Tooling is investing 1.6 million US in a joint venture tool manufacturing unit for the automotive industry.

And of course, I am impressed by the work of Bluescope Steel and Tata Steel in setting up manufacturing plants. Their joint ventures will make world class steel products for the building and construction sectors. So, it is clearly an illustration of the fact that Australia and India can work cooperatively together.

In the food processing sector, Australia is currently assessing opportunities to invest in India’s food industry.

And of course India’s incredible IT companies, which so clearly illustrate the benefits of globalisation, are prominent investors in Australia and we look forward to continuing that kind of cooperative relationship.


Can I finally say that the benefits of our economic engagement as nations are already clear. I am optimistic that so much more can be done to enhance the economic and trade relationship.

To the distinguished members of the Indo-Australian Chamber of Commerce, can I say to you that I appreciate very much the contribution that you are making towards building the relationship.

And I hope every time that you see our Consulate-General here in Chennai, you will know that we mean business. We are serious about building our relationship with Southern India and the opening of this Consulate-General, without doubt, is a practical demonstration of the closeness of our relationship and our determination to work well together.

So I am pleased today to officially declare the Consulate open and I wish you all well in promoting trade and investment opportunities between India and Australia.

Thank you