Malcom Turnbull failed to lock in a free trade deal on his trip to meet India's PM

Indian Prime Minister Narendra Modi (R) shakes hand with Australian Prime Minister Malcolm Turnbull before a delegation level meeting in New Delhi on April 10, 2017. Photo: Mondey Sharma/ AFP/ Getty Images.

Malcolm Turnbull has used a visit to New Delhi to forge closer security ties and make Australia the number one educator of Indian students but has played down the prospects of sealing the free-trade deal with India because of its heavily protected economy.

The Prime Minister said given the heavily protected Indian economy, especially its agriculture sector, and Australia’s difficulty in accommodating demand from India for greater access for its workers, the free trade agreement was unlikely to be sealed anytime soon.

“It’s a process that will take some time,” he said, adding it was not even worth putting a timeline on the FTA, nor signing a deal for the sake of it.

During a meeting late on Monday Mr Turnbull and his Indian counterpart Narendra Modi agreed the FTA had stalled and asked officials to have an urgent meeting to identify key areas of disagreement.This was portrayed as both sides being keen to get negotiations moving again, despite the hurdles.

The Australian Financial Review revealed on Monday that Mr Turnbull has commissioned an India Economic Strategy to explore other ways to maximise the economic relationship with the rapidly-growing power.

“We will pursue continued growth in trade between Australia and India,” he said.

Mr Turnbull said the new “priority” concerning India and trade was to complete the Chinese-led regional deal, the Regional Comprehensive Economic Partnership, which would involve India, and is a fallback to the collapsed Trans-Pacific Partnership.

The Prime Minister stated that Australia and India needed closer security ties in the region because the rise of China had resulted in “a sea change in our interest in each other” and, as like-minded democracies, had a mutual interest in upholding “the rule of law in the Indo-Pacific”.

“Of course we have so much in common – a solid foundation of shared democratic values, cultural, intellectual and sporting engagement and converging political, economic and strategic interests,” he said.

“Our mutual love of cricket, our fascination with Indian cuisine and culture both ancient and modern – from Buddhism to Bollywood – provides a great context, but the relationship is far stronger and deeper than that.

“It’s time for us to take our relationship to a new level. One in which Canberra and New Delhi are able to see eye to eye on the major issues confronting our region and the world.

“And one in which our shared economic interests grow and develop for the benefit of all Indians and Australians.”

Central to this will be education.

Australia lags only the US as the biggest exporter of education services to India and is seeking to exploit the current geopolitical climate to become number one.

Visa and immigration curbs being imposed or threatened by the United States and Europe are acting as a catalyst for an aggressive push by the Australian higher education sector to become the biggest exporter to India.

With the largest ever higher education delegation in India this week to coincide with a state visit by Mr Turnbull, trade and industry representatives told the Financial Review that uncertainty created by the presidency of Donald Trump, as well as Brexit-inspired curbs on immigration in the United Kingdom, which are affecting Indian students, put Australia in the box seat.

After coal, education is Australia’s most profitable export to India, currently worth $2.3 billion a year with more than 60,000 Indian students studying in Australia last year. This pales against the $5.7 billion made from educating Chinese students.

Mr Turnbull used a speech last night to further the push but he also heavily emphasised India stepping up as a security power, given the changes in the region over the past two decades.

“As India began to look east, Australia, too, was broadening its horizons, strategically and economically looking west as well as north and reframing our context as the Indo-Pacific rather than the Asia-Pacific,” he said.

Mr Turnbull said there was “massive room for improvement” and education was leading the way in deepening the relationship.

Mr Turnbull said on Monday night: “Our nations are bound together not just by centuries of history but by millions of people-to-people links,” he said.

“The 60,000 Indians who studied in Australia last year, the Australian entrepreneurs and educators who are bringing their expertise and investment to India. And the half a million Indian-Australians who call Australia home – the fastest growing culture in our multicultural success story.

India hopes to boost the skills of 400 million of its people by 2022.

Education Minister Simon Birmingham, in an interview with Sky News, would not be drawn on the strategy of exploiting fears over the UK and the US but did say Australia had an advantage insofar as it offered stability and a welcoming attitude to foreign students.

With plans for a broader free trade agreement between Australia and India stagnating, education, along with energy, is considered a key area where deals can be struck to the mutual economic benefit of each nation.

Mr Turnbull was also scheduled to meet on Monday night Gautam Adani whose multinational company wants to build the Carmichael coal mine in Queensland.

Adani has expressed interest in securing a $1 billion low-interest loan from the Northern Australia Infrastructure Fund to build a rail line linked to the mine. Mr Turnbull said that decision rested with the independent board which administered the fund.

But he re-emphasised he government’s support for the mine and said Australia would be a willing energy provider to India, be it gas, coal, uranium or renewable energy technology.

This article originally appeared on the Australian Financial Review. Read the original here, or follow the AFR on Facebook.

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