Australian official pitches for more direct trade, aviation links with India

Mumbai, Mar 5 (PTI) Pitching for more direct trade, including aviation, the Consul-General of Australia in Mumbai, Paul Murphy, on Thursday said that the free trade deal between the two countries has yielded "good growth." Murphy also expressed hope that the situation in the Middle East gets "resolved quickly" and things can go back to normal for the airspace.

"We want to see more direct trade between Australia and India and that includes aviation. We want to see goods and people flowing directly between the two countries because that's the most efficient way to do it. And the countries are large enough and important enough to each other to see that," Murphy told PTI on the sidelines of an event "Indo-Pacific Connectivity: Building Bridges between India and Western Australia," hosted by the University of Western Australia (UWA) here.

Stating that there is a "keen interest" from Western Australia in supporting the establishment of direct air routes to India, he said, "We are hopeful and ambitious around the provision of those routes." Acknowledging the capacity constraints in the airlines' industry, particularly in servicing routes, he said, "but we're determined to see those routes come on as quickly as possible.

Currently, Sydney and Melbourne have direct connectivity from India.

According to the Bureau of Research on Industry & Economic Fundamental (BRIEF), there is an economic and strategic case in having direct air connectivity between Perth (Western Australia) and India.

As per BRIEF, India-Australia bilateral trade has doubled to USD 24 billion in four years and the target is to take it to USD 100-billion by2030 under the free trade deal'”ECTA and the proposed comprehensive Economic Cooperation Agreement (CECA).

It may be mentioned here that the two countries are negotiating to expand the scope of the Economic Cooperation and Trade Agreement (ECTA), which was signed on April 2, 2022 and came into force on December 29, 2022.

Direct flights enable faster movement of high value and perishable cargo at the same time tourism, students, disapora and business travel provide base demand while improved connectivity reinforce trade, investment and partnership, according to BRIEF.

With close to 10 per cent annual growth, India is one of Western Australia's biggest tourist markets and its 8th largest international market by arrivals in 2024-25.

"We've just got to see more investment in those routes. Australian states are willing to be involved in helping solve that," said Murphy.

Expressing hope that the "situation in the Middle East is resolved quickly" and things can go back to normal for airspace, he said it also highlights the stability of the routes to Australia.

"We do know that the planes are fairly full going to Australia directly from India, so we've heard of loads of around 85-90% full loads. But also when direct routes come on, there can be some fierce competition from those indirect routes as third countries seek to protect their provision of services between Australia and India. But we see the same on lithium as well," he added.

"We've seen good growth in trade since we've done our trade agreement, but it is volatile. Some of the volatility, for example, is around energy and gold prices. Some of the largest items that are traded between Australia and India remain energy. That's coal from Australia, it's refined petroleum from India. So those sorts of prices can affect the overall trade," he said.

But what is really encouraging is we've seen trade in items beyond those large, bulky items increasing steadily post the trade agreement, including around about 100 per cent increase in car exports from India to Australia, he said.

"And I think we'll continue to see that sort of growth," he added. "We're also seeing a large increase in Indian agribusiness products, processed food imports into Australia," he said.

"We still have an amazing capacity to satisfy Indians' requirements on that agriculture side," he said.

Cotton's another area where we've got a lot of demand, particularly at the moment from Indian manufacturers where they're facing challenges out of the Middle East, Murphy said. PTI IAS MR