Exploring synergy in Indo-Australian agribusiness trade post COVID-19

India’s economic growth is projected to remain one of the fastest and robust for a number of years to come. Australia has significant opportunities to benefit from India’s growth and has taken steps to establish multi-facet comprehensive strategic partnerships with India. One of the critical goal of this partnership is the Free Trade Agreement(FTA). Although, issues linked to agribusiness has slowed substantially FTA negotiation, there is natural synergy in Indo-Australia agribusiness trade as there are substantial offerings on both the sides in terms of technologies, products and solutions owing to counter seasonality and unique agro-ecological zones. As both the countries are gearing up for greater economic and social benefits to be reaped from agriculture and food sector, this trade synergy can be harnessed for mutual benefits of both the countries.

India remains an attractive destination in view of market size and dynamics. although the two-way trade between Australia and India has been only $30 billion in 2019 as compared to $200 billion with China. It is estimated that India is expected to add 148 million people by 2026 with the total population reaching upto 1.3 bn and a majority of it would constitute middle class and upper middle class. With rising incomes and changing sociodemographic patterns, the food consumption patterns are moving towards diverse, personalized, healthier and safer life-styles. Amidst favorable policy shifts, emerging consumer segments and technology push, there are substantial opportunities for Australia to cater to this market as the total agribusiness imports by India is on the rise.

It is quite evident that Australian capabilities in agriculture, food processing, agricultural research and education and supply chains could benefit India. Both countries would gain from one another via the innovations and technological expertise, access to foreign investment to make food supply chains robust and from additional corporate investment and access to emerging market segments on both sides. Australia's India Economic Strategy 2035 (IES 2035) launched in 2018 was a step towards exploring the trade synergies between the two countries thereby strengthening overall bilateral relationship. The strategy has set a target for India to become one of Australia's top three export markets, and also as its third-largest destination in Asia for Australian outward investment.

Prof Brajesh Singh, Global Centre for Land Based Innovation, Western Sydney University

Traditionally, India’s protectionist trade regime has focused on export controls and a highly restrictive import regime. Other government policies and trade barriers, including government involvement in aspects of marketing and procurement of agricultural goods, also limit India’s trading potential. High Indian agricultural tariffs, Sanitary and phyto-sanitary (SPS) measures restrict import of many products such as poultry, swine, dairy, and most grain and oilseed crops. Other nontariff barriers, including import bans, quality standards, and labeling and packaging rules, further limit India’s ability to import agricultural products from other countries.

Although there has been an increase in imports in recent years, post COVID -19 agricultural reforms 2020 ushered by Government of India focus on self-reliant India through ‘Atmanirbhar Bharat Abhiyan’. The ambitious strategy aims to empower its farmers to feed the domestic markets and occupy a larger market share in global agribusiness landscape. The three significant ordinances aim at deregulating the commodities such as cereals, edible oils, oilseeds, pulses, onions and potatoes. These new reforms give farmers the choice to produce, hold, distribute and supply and will lead to harnessing economies of scale and attract private sector/ foreign direct investment in agriculture thereby strengthening storage and other infrastructure. There are plans to formalize micro-food enterprises and cluster based farming and an additional push for fisheries, animal husbandry, herbal cultivation and bee-keeping. Three separate ordinances to push agriculture marketing and commodities trade reforms provide conducive environment for Indian farmers to leverage benefits of exporting to the other countries thereby multiplying theirincome opportunities. This is where Australian agribusiness has an opportunity to co-invest and benefit from development of infrastructure in agri-sectors in India.

Amidst covid-19 situation and policy push, India too is looking to leverage from bilateral agribusiness trade. Although selfreliant, the production systems still need interventions in terms of advanced technologies, climate resilient varieties, region-specific production models, quality inputs including the data availability to the farmers. The new marketing reforms are expected to empower farmers strengthening supply chains through private and foreign investment in innovative farm to gate infrastructure. Australia can be a reliable partner in technology and expertise exchange if it can gain better market access to some of its products which do not directly compete with Indian smallholding farmers (e.g. horticulture products - berries, etc).

In spite of the opportunities, market synergies, and policy push from both the sides, there are barriers in terms of market access, understanding consumer preferences and qualitative restrictions, which might hinder the interests on both the sides. It is hence advisable to strategize in terms of both short term and long term to cater to these markets. Previously, we recommended five-pronged approach engagement strategy for both the governments to move in this direction:

Prof Sapna Narula, School of Management, Nalanda University

• Develop an effective plan for joint technology development and sharing market access for shared prosperity

• Identify key niches for trade, policy and development goals in Agribusiness including in a) Infrastructure development, b) Intensification of trade in niche markets

• Create anetwork of key stakeholders for continuous scientific and policy advice

• Use strengths of research and trade partnership in agribusiness to support strategic partnerships in other fields

• Establish an Australia- India Centre of Excellence on Agribusiness to support 1 -4 points above (https://www. westernsydney.edu.au/data/ assets/pdf_file/0008/1472390/ Agribusiness-Round-Table_ Report.pdf)

In addition to this, there is a need for additional infra-structural (e.g. transport and storage for frozen products) cooperation to ensure that the trade is beneficial for both the countries. An intensification of bilateral meetings at different stakeholder levels have to be geared up in near future for encouraging bilateral trade. The recent bilateral summits of the two Prime Ministers and the signing of comprehensive strategic partnership should provide the much-needed impetus to realize the potential of agribusiness trade to become key promoter rather than a constraint of bilateral strategic relationship.

Professor Sapna Narula, School of Management, Nalanda University, India and Prof Brajesh Singh, Global Centre for Land Based Innovation, Western Sydney University, Australia