Commerce minister Kamal Nath (centre) with Australian trade minister Warren Truss (right) and Ficci president Habil Khorakiwala in New Delhi on Thursday. Picture by by Prem Singh

New Delhi, March 1: India and Australia have agreed to substantially enhance bilateral trade and investment relations. Commerce minister Kamal Nath and Australian trade minister Warren Truss signed an agreement on the issue at the 10th India-Australia joint ministerial commission (JMC) meeting on Wednesday.

The two countries have decided to promote investment in the energy, mining, infrastructure, food processing, telecom, information and communications technology, tourism, biotechnology and financial sectors.

India informed the visiting Australian delegation about the steps taken to ease foreign direct investment (FDI) regulation, including easing of sectoral caps and simplification of procedures. The huge potential for investment between the two countries was emphasised in the JMC meeting.

Indo-Australian trade has registered a record increase from $1.4 billion in 2000-01 to $5.7 billion in 2005-06, with India’s exports to Australia at $0.8 billion and Australia’s exports at $4.9 billion. Hailing India’s emergence as Australia’s fastest growing trading partner, Truss said, “India is the new kid on the block and everyone is interested.”

Addressing the 16th meeting of the Indo-Australian joint business council this morning, Nath said he was happy that more than 17 Australian companies were engaged in business process outsourcing in India, led by Telstra, Australia's largest telecommunications carrier. A number of Australian banks were also interested.

Inviting Australia to invest in India, especially in mining, farm and education, Nath said, “The mining sector should be of great interest to many of you. The economies of India’s traditionally backward states, Chhattisgarh, Jharkhand and Orissa, have the potential to grow from $30 billion in 2003 to $75 billion by 2015 if they tap their mineral wealth.

“In the coming years, I expect Australian companies, with their clean coal and mining technologies, to play a huge role in developing the wealth of these states.”

“Farm sector stakeholders in Australia, I believe, might have a lot to offer counterparts in India with regard to the latest farming methods and cropping patterns,” he added.

India is now in the process of upgrading its farm sector, and is seeking massive investments in processing capacities and cold chains; it is also looking to diversity its crop mix.

“I also believe that Australian food processing companies can play a huge role in developing boutique crops in India such as canola, Chinese vegetable, grapes, organic wheat and berries,” Nath said.

The education sector has a huge potential for Australian firms and institutions.

The Australian minister also met India’s mines minister Sis Ram Ola and discussed the prospects of Australian companies undertaking mining operations in India.