I believe these companies have greater potential to contribute in Australia in IT skills and capacity development, by partnering with our universities and TAFE colleges. Opening borders to skilled workers will help the acute shortage of IT expertise in this country.
Indian IT companies will be able to move their people back and forth freely again. Qantas recently announced direct flights from Sydney and Melbourne to New Delhi.
But we need to look ahead and take action to develop fundamental IT capabilities for our medium and long-term needs.
Migration should also apply to students. KPMG’s economic analysis has shown how the loss of students and young skilled workers can hurt GDP in the long run, and we’ve advocated incentives for students, including easier pathways to residency. Australia needs a concerted effort in this area if it is to compete with the US and Canada, which are now preferred by Indian students.
Creating momentum for the bilateral relationship requires a focus on sectors that address both economic and social impact agendas: technology, renewable energy and climate change; health and life sciences. There are already several important initiatives showing that Canberra’s mindset is positive.
The steps to a prosperous partnership
First, the government is considering DFAT’s recent assessment of Australia’s India’s Economic Strategy to 2035 from 2018. The key here is to strengthen the bilateral architecture through the establishment of a new umbrella organization in Australia, enabling greater engagement with the Indian diaspora and to promote ‘India literacy’ in Australian boardrooms about the untapped potential of improve the relationship.
This organization must be endorsed and supported by the government while leveraging the private sector.
While the government is to be commended for its current map of the Indian diaspora across Australia, we need a sustainable program with tailored strategies to leverage and unlock their assets. This should be a nationally coordinated project of federal and state governments, businesses and the community, and should be one of the cornerstones of the proposed new organization. This will help boost the bilateral economic relationship and hopefully also institutionalize diaspora philanthropy in India for continued development and change.
The need for literacy in India is not limited to large Australian companies. It extends to start-ups and SMEs that are equally well positioned to seize the Indian opportunity; in 2021 India saw the birth of 42 unicorns and the establishment of a thriving start-up ecosystem for growth and access to IP, know-how, talent and capital.
Second, an interim Comprehensive Economic Cooperation Agreement is nearing completion, which will be an important step towards a full CECA by the end of 2022.
Third, negotiations on a new tax treaty between the two countries are now well advanced. This could remove a significant Australian tax on Indian IT companies. It would be a victory not only for the Indian IT companies in Australia, but for all Indian technical services providers supplying this country.
And fourth, the federal government’s proposed creation of the new Australia India Infrastructure Forum is an excellent initiative to help accelerate and improve the bilateral investment relationship in a critical sector. Infrastructure development is key to India’s economic revival stemming from COVID-19, offering many opportunities for Australian businesses and pension funds.
The old days of a relationship based on cricket, curry and the Commonwealth must be pushed firmly into history. At an unprecedented level of geostrategic and political tensions, we need to forge new and stronger trade and investment ties.
There’s no better time than 2022 as India is projected to grow 9.5 percent as it celebrates 75 years of independence and sheds light on its diaspora and their achievements.
Jai Patel is Head of India Business Practice at KPMG Australia.