Everyone wants a piece of India lately. No surprises there! The Indian economy has become stronger and stronger. Indian Prime Minister Narendra Modi has an ambitious agenda to promote production in India, a cornerstone of his long-term economic strategy. This plan is called “Make in India” and aims to attract investment in the Indian manufacturing sector. It is essentially a replication of the export-oriented growth model, followed by different East Asian economies in the 1960s and 1970s. China is a recent example of economic growth pursued by an export-oriented strategy. However, the complication stems from India`s accession to the World Trade Organization (WTO) and the question: how will India expand its production base while remaining within the framework of the WTO? Fifth, for India, Australia has never been at the top of India`s international agenda, the focus has been on its neighbourhood and, subsequently, on the major powers. That has to change. Australia`s hybrid character offers India a unique combination of strategic and economic collaborator qualities – Western, but increasingly Asian, with massive natural resources and yet a developed economy. Australia associates proximity as a neighbour to the Indian Ocean with deep interdependence with other parts of the world.
The two countries have much more to gain from closer ties. In addition to CECAF, Australia and India are participating in the negotiations on the Regional Comprehensive Economic Partnership – a proposal for an ASEAN-centric free trade area, which would first include the ten ASEAN member countries and countries that have existing free trade agreements with ASEAN. It is precisely against this strategy that the WTO Dispute Settlement Group has decided. India`s strategy to allow SPDs to benefit from feed-in tariffs by incentivizing the use of local inputs is contrary to the WTO Agreement on Trade-Related Investment Measures (TRIMS). However, despite the WTO oilseed rape on the ankles, India was not discouraged when it announced the decision to appeal to the WTO Appellate Body. The wto dispute settlement panel`s ruling was made public at the end of February 2016. Although the decision was taken at a time when negotiations between India and Australia were already at an advanced stage, the decision offers Australian investors and producers the opportunity to streamline their strategy towards India. The main result of the “India – Solar Panels” decision is that India cannot insist on the use of local inputs as a precondition for transactions with foreign investors or manufacturers, as this would constitute a violation of the TRIMS agreement.
This gives Australian negotiators an additional advantage in concluding the trade deal with India. Formal negotiations for the CACE began in 2011 and continued in 2014, when Prime Ministers Abbott and Modi renewed the commitment of both countries to quickly conclude a balanced and mutually beneficial agreement. In April 2015, Andrew Robb, then Australia`s trade minister, visited India. Another interesting observation is the impact of a free trade agreement on the Australian manufacturing sector (notably the steel and tomato industry). These two sectors were the subject of a case study in a recent report by the Productivity Commission (CP). The PC recommended several system changes, for example. B the increase in the dumping margin to 5% or more. The report also proposes to change the way the Australian Anti-Dumping Commission calculates the full cost of the economy when imposing sanctions on imports.
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