Highlights
- Australian two-way agricultural trade with India was valued at over $1 billion in 2018
- India is Australia's eighth-largest trading partner
- Australia will soon be importing barley and fruits to India
Last week, while China was threatening to increase tariff on Australian barley, Agriculture Minister David Littleproud announced they had reached a breakthrough with India.
Australia had negotiated new biosecurity arrangements opening the door for more export opportunities with India for Australian barley and fruit growers.
India’s approval of phosphine fumigation of malting barley and in-transit cold treatment of a variety of fruits is a major breakthrough for Australian farmers, Minister Littleproud announced.
“We can now export malting barley to India using phosphine fumigation, opening market access opportunities for our barley growers especially in global beer production,” he said.
Minister for Agriculture David Littleproud at a press conference at Parliament House. Source: AAP
“This is a massive market of young, health-conscious and vegetarian consumers seeking high quality fresh and safe fruit and vegetables.
“The main benefit of cold treating products in-transit compared to onshore in Australia is that better quality fruit arrives in the destination country,” Minister Littleproud said.
“As the product is treated as it is transported, it gets to the market quicker and the exporter can charge a premium based on increased freshness,” he said.
Australian two-way agricultural trade with India was valued at over $1 billion in 2018, with Australia exporting $664 million of agriculture, fisheries and forestry products.
In 2019 Australia exported to India $830k worth of table grapes, $352k apples and pears and $180k summer fruit.
Can India replace China as Australia’s trading partner?
China, with a population of 1.4 billion people, is Australia’s largest trading partner with a two-way trade valued at $235 billion in 2018-19.
Compared to that, India ranks eighth on the list with two-way trade valued at $30.3 billion in 2018-19.
Australia is acutely aware of the size of the Indian market, home to world’s second-largest population and it, perhaps, hopes the country with 1.3 billion people will be able to solve some of their growing trade problems with China, starting with barley.
PM Scott Morrison and Treasurer Josh Frydenberg (AAP) Source: AAP
Minister Littleproud said he hoped Australia to tap into this market and gain a fair proportion of it in 2021.
“The Indian malt market is estimated at 500,000 tonnes, worth over $100 million dollars, and it is anticipated Australia could gain a fair proportion of that market in 2021,” Minister Littleproud said.
“There has been growth in the consumption of beer in India and Australia is known worldwide for its high-quality malting barley. We are helping to position our farmers to tap into this huge export potential and play an important role in India’s food security.”
But can India be the answer to Australia’s trade war with China?
No, says Dr Pradeep Taneja, who lectures in Chinese politics, political economy and international relations at the University of Melbourne and is also a Fellow of the Australia India Institute.
“Before China imposed an 80 per cent tariff on Australian barley set to last for five years, they stopped buying beef from four Australian abattoirs which represent 35 per cent of beef exports to China. India may buy barley from us, but it is not likely to buy beef, due to the country’s cultural fabric,” Dr Taneja says.
“India cannot replace China because it is a very different market,” he says.
China is Australia’s largest barley consumer and India may look to buy barley, but it will not be the same amount.
“India’s beer consumption is much lower than in East Asian countries. Barley is primarily used for producing beer. It can be used it in bread and biscuits, but the scope is limited,” he explains.
But Dr Taneja says India definitely offers an opportunity to Australia to diversify.
“India is a huge market. And a lot can be done if Australian producers focus on producing products specifically for the Indian market. Australian companies need to do their research to create a new market,” he says.
Prime Minister Scott Morrison and Indian Prime Minister Narendra Modi will hold a virtual summit on June 4.
People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits.
Testing for coronavirus is now widely available across Australia. If you are experiencing cold or flu symptoms, arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080.
The federal government's coronavirus tracing app COVIDSafe is available for download from your phone's app store.
SBS is committed to informing Australia’s diverse communities about the latest COVID-19 developments. News and information is available in 63 languages at sbs.com.au/coronavirus
