Business Relationships between Australia and India in 2014 - Research Paper Example

 Business Relationships between Australia and India in 2014 What are the main issues affecting business relationships between these two regions. How have these issues changed in the last 10 years? Based on your research, what will this relationship look like in 2024? Executive summary This paper aimed at addressing the current trade relations between India and Australia. The study intends to answer the question that has been of much interest amid global investors related to India and Australia partnership, concerning those factors restricting betterment of the relation amid the countries. From a historic perspective, the study thus assesses the changes observed in the relationship of India and Australia for the past 10 years, projecting the future of such relationship for the upcoming few years until 2024. As per the study findings, it is worth mentioning that communication gaps, giving rise to misunderstanding amid the two nations concerning their global objectives, acted as the major hindrance to their stagnant business relationship. However, from a futuristic perspective it was observed that such hindrances are steadily becoming obscure and contributing towards a much better relationship amid the two nations. Table of Contents Introduction 2 Main Issues Affecting Business 2 Communicating Issues 2 Views of Both the Nations towards Each Other 3 Issues in Operations 4 Change of These Issues in Last 10 Years 4 Alternative Policies 4 Accelerating Social Bonding 5 Stronger Ties between Indian and Australian Government 5 Future Business Relationship between Australia and India 6 Recommendations and Conclusions 7 Report Outline 7 References 9 Introduction The existing business relationship between Australia and India has ignited many benefits in building a communication with different cultures. To be mentioned in this context, the commonness in the strategic goals of the countries acted as a major boost to their enriched business relationship in the recent years (Brewster 2014). However, there are certain issues as well, those are inherent to the foreign trade dynamics of both these countries, having a toll on their developments. One of those issues can be identified as related with the often reported unrest in Australian geographic climate, when concerning the expatriates from India (Grare 2014). Nevertheless, through bilateral trade agreements and other forms of trade relations, these countries have witnessed massive changes in the recent decade, which will be discussed in the paper henceforth. Main Issues Affecting Business Communicating Issues Communication between the two countries has given rise to certain issues related to their business relationships. To be noted in this context, since the past 10 years, India and Australia were observed to having divergent goals defined for their strategic development. Partially owing to these strategic trajectories, both the nations were somewhat reluctant to enhance their trade relations, which indicate towards the communication gap existing amid the duo (Rao 2003). It was, but only in the year 2014, that the current Prime Ministers of both the nations took plunge in rebuilding the bilateral trade agreements that has enhanced communication between them (Grare 2014). Another major issue that had been hindering communication between the two nations was the fact that neither of the nations considered the other as a global power. Therefore, with lowered economic significance of both these nations, as was replicated to each other, the need for communication also became weak (Grare 2014). Views of Both the Nations towards Each Other Historically observing the pattern of trade relations conducted by India and Australia depict that the views of each of these nations towards each other as a global power were not quite positive. Where on one hand, Australia did not view India to rise as a promising economic power within the Asian continent; on the other hand, India was reluctant to be showcased as a pro-Western nation tying up with Australia that might have also fuelled suspicion in China regarding the geopolitical intentions of the country. In all these hindrances, the prime obstacle can be identified as related to the ambiguous security concerns of both the nations related to China as a global power (Tow & Wa 2009). On the economic front, Australia is quite dependent on the growth of the Chinese market as one of its most promising export sectors. However, when considered politically, the rise of Chinese military power was viewed as a potential threat for Australia wherein its aggressive move to rejuvenate Indian partnership through bilateral trade relations could have been treated negatively. Similarly, when concerning India’s perspective towards China, the inherent negative perceptions and their underlying reasons can be argued as more apparent to that of Australia. For instance, since the Second World War, India-China border relationship has been painful. Under such a political condition, India’s strengthening relationship with Australia (which is not to be overlooked as a prime partner of the US foreign trade) could have been reflected as an intention to grow pro-Western ties and rise as the next Asian power; therefore, affecting China’s perceived political reasoning (Grare 2014). Such ambiguity in relation to their political relations, often reflecting a degree of mistrust can be stated as a major reason of the obstructed trade affairs between India and Australia. Issues in Operations Operational issues, affected by the geographic locations of both the countries have also played a major role in keeping India and Australia reluctant to strengthen their industrial ties. It was primarily owing to the operational issues, which still remain ambiguous to an extent, that India and Australia have been into trade relations with relation to a few goods and services. Concerning the goods and services exports and imports of Australia to India and vice-versa, it becomes apparent that these transactions had taken shape in only a few sectors. One among these industry ties were the export of Indian labor force to Australia, making skilled manpower available to the latter at a much cheaper rate. Minerals and energy, education and training, Information Communication Technology (ICT), Travel and Tourism and Biotechnology are a few key areas where India and Australia have been interdependent. To be noted in this context, neither of these key areas can be identified as quite important for the economic development of the country or even its stability within the global front. Although at an onset, these trade sectors are observably more credible to reward sustainability, they have limited potential to become industrial competencies of economies. This particular aspect can also be regarded as an issue hindering the trade relations between India and Australia if emphasized their interdependency level that could have taken the relationship to a more diverse level (Government of India & Australian Government 2010). Change of These Issues in Last 10 Years Alternative Policies The alternative policies recently adopted in the business relationship between Australia and India has been much concentrated towards establishing a more transparent trade dimension between the countries. Bilateral agreements always have remained the base for trade relationship between India and Australia, wherein maritime affairs have played a pivotal role (Commonwealth of Australia, 2012). With India’s intentions getting transparent to Australia, the latter have began considering India as a prospective and supposedly most vital trade partner in maritime agreements. Unlike the previously observed hindrances to overlook India as a global power, post occurrence of the financial crisis, Australia now views the Asian nation in a more positive way that has encouraged the ties between the two economies in the recent decade. This shift in Australia’s perspective is much visible through its change in policies related to the importance of Indian Ocean and India as one of the Sea lines of Communications (SLOCs) (Hall 2014). Accelerating Social Bonding Ties between India and Australia on the education front have received much attention from both the parties in the recent decade. Wherein education and training received immense attention from the nations, exchange in the form of manpower has led to greater diversity in their trade relations. Nevertheless, the countries have been facing certain social issues that have been obstructing the growth of India and Australia wherein most of the conflicts rooted to social divergences and racial diversities. It was in this context that Australian government adopted more widespread public democratic strategies, which enriched the safety of expatriates within the nation. Such bonding at the governmental level contributed to the social association of India and Australia helping in better conduct of business policies (Commonwealth of Australia, 2012). Stronger Ties between Indian and Australian Government In the recent years, apparently since the coronation of Indian PM Narendra Modi, ties have become increasingly strong between the two economies. Frequent visits at the ministerial levels of the two nations have been a major highlight to the aspect wherein protection of international investors and relaxations on trade affairs between the economies. Technology enhancements and innovation in the clean energy sector have thus far emerged as a vital platform to enrich the trade relations of these nations. It must also be mentioned in this context that frequent ministerial meetings between India and Australia have also rectified many ambiguities persistent when concerning the views of these nations towards each other. A major leap taken by the Indian government was the abolition of restrictive rules and regulations those were of limited significance and if omitted, could result in better trade flow between India and Australia. Correspondingly, with the rise of India as a global power from the Asian continent, and it’s much apparent goal that restrained from making any revolting arguments with China have certainly imposed a strong positive influence on Australia’s view towards the nation as a trade partner (Grare 2014). Future Business Relationship between Australia and India The business relationship between Australia and India is growing rapidly owing to the recent steps taken by the governments of both these nations. As was noted in the recent affairs of both the nations, governments have been much inclined towards upholding their trade relations facilitating their interdependency to a greater extent. To these policy amendments, the major aim was to enrich the Free Trade Agreements (FTA) currently practiced by the nations along with the Comprehensive Economic Cooperation Agreement (CECA), which have been much significant in reassuring trust amid the two economies. In future, as analysts argue, bilateralism will gain much significance in the trade relations of both the countries owing to which, the degree of interdependency between the two will rejuvenate. In addition, exchange of manpower and tradable goods are likely to increase in volume that would result in augmented trade partnership through the sea routs between India and Australia. Australia viewing India as another major global power with likely more opportunities to grow in the global platform, it is likely that the long persistent mistrust will get faded in the years to come for the recent future (Venaik & Brewer 2015). Therefore, by 2024, it is expected that India will have a stronger tie with Australia, with most of its imports and exports sourced through each other. Misunderstandings persistent within the two nations are also likely to be reduced to a negligible extent provided the two nations keep working on their relations at the ministerial level. Recommendations and Conclusions Drawing from the discussion conducted above, it can be inferred that historically, it was the ambiguity between the communicative ends of both the countries that caused a degree of mistrust amid the two nations giving rise to hindrances for further development of their trade relations. While on one hand Australia’s view towards India as a less potential economy to grow in terms of global power as well as its inability to ensure national stability owing to the continuous military threats in its borders areas and within also hindered aggressive move from the nation to build its trade relation with India. Similarly, India’s perception, that building stronger tie-ups with Australia through sea-route might indicate its pro-Western approach and therefore, put its relationship with China at stake after all the conflicts in the Indo-Chinese border region, had also imposed a negative influence on its trade relationship with Australia. Nevertheless, both the nations have overcome such inhibitions that restricted better flow of trade within their economic dimensions. The future possibilities have also been identified to be quite positive for both the countries. It is in this context that inventing new trade potentials, the countries should focus on opening up broader collaboration opportunities, wherein setting up new trends and allowing trade relaxations shall be quite effective. However, it must also be ensured that high degree of transparency is maintained in the collaborations built so that misunderstandings between India and Australia can be avoided. Report Outline Background: The business relationships between India and Australia have changed in this modern day context due to certain changes observed in the industry, technical or operational domain. Issue/Problem: The prime issue or the problem is the increased level of deteriorating business relationship between India and Australia. Question: What approaches may address the issue of affecting the business relationship between India and Australia? References Brewster, D. (2014). The India-Australia Security and Defence Relationship: Developments, Constraints and Prospects. Security Challenges, 10(1), 65-86. Commonwealth of Australia. (2012). Australia in the Asian century. Australian government, 1-312. Government of India & Australian Government. (2010). India and Australia: Joint Free Trade Agreement (FTA) Feasibility Study. Department of Foreign Affairs and Trade. Grare, F. (2014). The India-Australia Strategic Relationship Defining Realistic Expectations. Carnegie Endowment for International Peace, 1-32. Hall, I. (2014). The Engagement of India: Strategies and Responses. USA: Georgetown University Press. Minister for Trade and Investment. (2015). Robb: Australia India trade ties closer than ever. Retrieved from http://www.trademinister.gov.au/releases/Pages/2015/ar_mr_150116.aspx Rao, P.V. (2003). India and Australia: New Horizons. New Delhi: Mittal Publications. Tow, W.T. & Wa, C. K. (2009). ASEAN-India-Australia: Towards Closer Engagement in a New Asia. Singapore: Institute of Southeast Asian Studies. Venaik, S. & Brewer, P. (2015). India-Australia trade push another win for bilateralism. Retrieved from http://theconversation.com/india-australia-trade-push-another-win-for-bilateralism-36286 Read More