Economy

India - Economy overview

Country profile

• India is the fifth largest economy in the world on the basis of nominal GDP, according to The World Bank GDP ranking. The Economic Survey 2021-22 predicts 9.2% growth in India’s real GDP in 2021-22, after contracting in 2020-21. The International Monetary Fund’s World Economic Outlook (April 2022) values India’s GDP at USD 3.53 thousand billion and GDP per capita at USD 2.52 thousand at current prices. 
• According to the OEC (Observatory of Economic Complexity), India is ranked as the 18th largest exporter in the world with a total export value of USD 284 billion in 2020 and as the 12th trade destination with total imports at USD 372 billion. 
• India ranks 63rd on the World Bank’s Ease of Doing Business index in 2020. 
• India attracted the highest ever total FDI inflow of USD 83.57 billion during 2020-21. FDI inflows increased by 23% post COVID.
• India is Australia’s 5th largest trading partner with trade in goods and services at AUD 29 billion representing 3.6% of Australia’s total trade in 2017-18, with exports at AUD 8 billion and imports at AUD 21 billion. 

Policies and initiatives

• The Government of India launched its Make in India initiative in 2014 to boost the country’s manufacturing sector and increase the purchasing power of the average Indian consumer, which would further drive demand and spur development and investment.
• The Digital India initiative launched in 2015 focuses on three core components: creating digital infrastructure, delivering services digitally and increasing digital literacy. 
• Atmanirbhar Bharat Abhiyaan or Self-Reliant India campaign was launched in May 2020 to support India’s domestic economic activities. Following the first COVID-19 wave, the government announced a special economic and comprehensive relief package of INR 20 trillion (approximately USD 260 billion), representing 10% of India's GDP under this campaign. Further measures for relief and credit support for businesses, especially MSMEs, during the COVID-19 pandemic, were implemented in 2020. Several monetary and micro-financial policies were also announced in 2020 in response to the COVID pandemic. 
• The Goods and Services Tax (GST), introduced on 1 July 2017 by the Government of India is a comprehensive, multistage, destination-based tax that has replaced a range of indirect taxes with a federated tax and is reshaping the country's economy.
• The Startup India initiative was launched on 16 January, 2016 to catalyse startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India. 
• A Smart Cities Mission was launched on 25 June, 2015 with an objective to drive economic growth and improve quality of life through comprehensive work on social, economic, physical and institutional pillars of a city. One hundred cities have been selected to be developed as Smart Cities through a two-stage competition.
• Skills India is an initiative launched in 2015 to train over 400 million Indians in different industry-related jobs with a vision to create an empowered workforce by 2022. Various schemes under this include PMKVY, PMKK, Apprenticeship Training, TITP. 
• Pradhan Mantri Awas Yojana (PMAY) was an initiative launched in 2015 to provide affordable housing to the urban poor. It has two components: Pradhan Mantri Awas Yojana (Urban) (PMAY-U) for the urban poor and Pradhan Mantri Awaas Yojana (Gramin) (PMAY-G) for rural areas.
• Innovation for Defence Excellence (iDEX), launched in 2018, engages with industries including MSMEs, start-ups, individual innovators, R&D institutes and academia to provide grants/funding and other support to carry out R&D, which has potential future implications for the Indian defence and aerospace sectors. 
• The Government of India revised and implemented a Consolidated Foreign Direct Investment Policy in October 2020 in order to supplement domestic capital, technology and skills for accelerated economic growth and development. 
• Various initiatives such as the Production Linked Incentive (PLI) Scheme, Remission of Duties and Taxes on Exported Products (RoDTEP), improvement in logistics infrastructure and digital initiatives have been undertaken to promote and strengthen exports. 
• In March 2021, the parliament passed the National Commission for Allied, Healthcare Professions Bill, 2021 to meet the sector's long-standing demands and increase professional employment opportunities.
   

Governance structure

The Ministry of Finance serves as the Indian Treasury Department with responsibility for the economy of India, including taxation, financial legislation, financial institutions, capital markets, centre and state finances, and the Union Budget. The Ministry of Finance is the apex controlling authority of the Indian Revenue Service, Indian Economic Service, Indian Cost Accounts Service and Indian Civil Accounts Service.

The Union Finance Ministry of India comprises five departments: Department of Economic Affairs, Department of Expenditure, Department of Revenue, Department of Financial Services and Department of Investment & Public Asset Management. The Department of Economic Affairs is the nodal agency of the Union Government to formulate and monitor India’s economic policies and programs having a bearing on domestic and international aspects of economic management.

Australia - Economy overview

Country profile

• Australia is the 13th largest economy in the world on the basis of nominal GDP, according to the World Bank GDP ranking. The International Monetary Fund’s World Economic Outlook (April 2022) values Australia’s GDP at current prices at USD 1.75 trillion and GDP per capita at current prices is USD 67.46 thousand.
• According to the Observatory of Economic Complexity (OEC), Australia is ranked as the 22nd largest exporter in the world with total exports valued at USD 250 billion in 2020 and as 24th in total imports with total imports value at USD 202 billion.
• Australia ranks 14th on the World Bank’s Ease of Doing Business index in 2020.
• In 2020, the total stock of Foreign Direct Investment (FDI) in Australia is valued at AUD 1 trillion, with an annual growth of about 8% since 2000.

Policies and initiatives

• Through the 2021-22 Budget, the Australian Government announced its Digital Economy Strategy 2030 setting out how Australia will secure its future as a modern and leading digital economy and society by 2030.
• In response to the COVID-19 pandemic, the Australian Government delivered a fiscal stimulus package consisting of expenditure and revenue measures worth AUD 312 billion (15¾ percent of 2020 GDP) through to FY2025. Since the onset of the pandemic, the Reserve Bank of Australia (RBA) has announced a comprehensive package of monetary easing, including policy rate cuts, yield curve targets, term funding facilities, and government bond purchases.
• The 2020–25 National Health Reform Agreement (NHRA), announced in May 2020, is committed to improving health outcomes for Australians, by providing better coordinated care between Commonwealth, State and Territory governments (the States) to work in partnership to improve health outcomes for all Australians and ensure the sustainability of the Australian health system; 
• The Department of Industry, Science and Resources has launched several initiatives to address skills, inclusion, digital government, digital infrastructure, data, cyber security and regulation issues. 
• As part of the 2020-21 budget, the Australian Government released the 2020 Women’s Economic Security Statement which aims to create more opportunities and greater choice for women, supporting them to build financial security in the recovery from COVID-19.
• Australian federal, state and territory governments have taken several initiatives that actively encourage and support industry investment in Australia’s mineral resources sector.
• A Health Security Initiative for the Indo-Pacific region, launched in October 2017, contributes to the avoidance and containment of infectious disease threats with the potential to cause social and economic harms on a national, regional or global scale.

Governance structure

Treasury, the Australian Government’s pre-eminent economic adviser, is a central policy agency that provides advice to the Government to support the effective management of the Australian economy. The Treasury portfolio is comprised of several entities that undertake a range of activities aimed at achieving strong sustainable economic growth for the good of Australians. As a central agency of the Australian Government, the Department of Finance (Finance) plays an important role in supporting the government’s ongoing priorities through the Budget process and fosters leading practice through the public sector resource management, governance and accountability frameworks.

Bilateral frameworks for cooperation between India and Australia

• India and Australia signed an interim Economic Cooperation and Trade Agreement (ECTA) on 2 April 2022. The historic trade deal will eliminate tariffs on more than 85 per cent of Australian goods entering India and over 96 per cent of Indian goods entering Australia.
• Australia’s economic engagement with India is underpinned by its India Economic Strategy (IES). An Update to the India Economic Strategy to 2035: Navigating from Potential to Delivery represents "a five-year action plan for the Australian Government that responds to the evolving opportunities for both countries, changed global circumstances, the growing strength of the bilateral relationship, and key economic reforms in India."
• A Comprehensive Strategic Partnership (CSP) was announced during the India-Australia Leaders’ Virtual Summit in 2020 to encourage expanded trade and investment flows to the benefit of both economies.
• Australian and Indian Foreign Ministers meet regularly for the Foreign Ministers' Framework Dialogue, alternately held in Australia and India. 
• The Australia-India Council (AIC) was established by the Department of Foreign Affairs and Trade in 1992 to advance Australia's foreign and trade policy interests by building awareness and understanding between the peoples and institutions of Australia and India.
• India and Australia meet annually for the India-Australia '2+2' Foreign Secretaries and Defence Secretaries Dialogue to enhance foreign policy and security cooperation 
• India-Australia Economic Policy Dialogue is held between NITI Aayog (National Institution for Transforming India) and the Australian Treasury with the objective to share insights on key economic policy questions. 
• The Australia Economic Strategy Report, led by Ambassador Anil Wadhwa was launched at the Partnership Summit 2020 by the Government of India highlighting the strategic areas of bilateral opportunities and potential collaboration across diverse sectors.

Trade and investment opportunity

• Australia’s India Economic Strategy 2035 aims to seek and expand the growth potential to transform Australia's economic partnership with India to 2035 by outlining opportunities for enhancing trade in traditional areas of education, natural resources, pharmaceuticals, gems & jewellery, software & IT and the new emerging sectors of agricultural produce, mining equipment technology & services, and industrial goods & services.
• The India-Australia CEO Forum is a mechanism for business from both nations to engage directly on ways to build the bilateral trade and investment relationship in various sectors.
• The Australia India Business Exchange launched in June 2021, aims to deepen Australia trade and investment across various sectors including sustainable economic development, energy and resources. 
• The Australian Trade Commission (Austrade) is the Australian Government agency that promotes trade, investment and education, and develops tourism policy and research. Austrade has 6 offices in India, in New Delhi, Mumbai, Kolkata, Hyderabad, Chennai and Bangalore.
• The Australia India Business Council (AIBC) is a non-profit organisation aimed at fostering bi-lateral relations between the two countries with a mission to promote trade dialogue through nurturing and maintaining close relationships in both Australia and India, with federal and state government agencies, the diplomatic corporations and industry bodies.
• The Australia India Chamber of Commerce (AICC) is a non-governmental and not-for-profit organisation aimed at facilitating dialogue between businesses in Australia and India to foster advocacy, innovative exchange and collaboration.
• Indo-Australian Chamber of Commerce is an institution that brings together over 500 companies across the Indo-Australian business community to emerge as the single most premier platform for trade promotion between India and Australia.

Cooperation and collaborations

• In 2019, the University of Melbourne undertook a research project on the theme The environmental costs and benefits of special economic zones under the Discovery Early Career Researcher Award from Australian Research Council.