SOUTH AUSTRALIA – INDIA ENGAGEMENT STRATEGYstatedevelopment.sa.gov.au/upload/india/india-strategy.pdf · and business, education, sport, culture, the arts and sciences, including

SOUTH AUSTRALIA – INDIA ENGAGEMENT STRATEGYJuly 2014 www.statedevelopment.sa.gov.au

P 2 SOUTH AUSTRALIA – INDIA ENGAGEMENT STRATEGYP 2 SOUTH AUSTRALIA – INDIA ENGAGEMENT STRATEGY

SOUTH AUSTRALIA – INDIA ENGAGEMENT STRATEGY

WHERE WE ARE NOW

• South Australia and India share legal, political, cultural, linguistic and sporting ties that stem from common British historical links. Both are strong democracies.

• These similarities and some of our differences provide opportunities for respectful, sustained and mutually beneficial engagement between South Australia and India.

• An important economic relationship already exists through trade in resources and attraction of Indian students to our state.

• As South Australia’s engagement with India grows, there will be more opportunities to diversify and expand the relationship.

WHERE WE WANT TO BE

• By 2030 India will be the world’s third largest economy and South Australia can be a significant partner in India’s economic and social development.

• South Australia can assist India’s rapid development as a knowledge economy by sharing expertise in our strengths such as resources, clean technology, education, aerospace and defence, agri-food and wine and health services.

• South Australia seeks a long-term mutual partnership with India encompassing investment, trade and business, education, sport, culture, the arts and sciences, including an exchange of people, skills and ideas.

HOW WE WILL GET THERE

• Guided by a long-term strategy and committed to working with partners locally and abroad, South Australia can engage with India in a way that benefits both.

• This phased 10-year Strategy identifies opportunities within four initial sectors:

- Aerospace and defence - Energy and natural resources - Education and training - Clean technology. Analysis on other opportunities to follow.

• A South Australia–India Council of business and government leaders will ensure the strategy is implemented and embedded across government and key stakeholders.

• An expert ‘India team’, including staff with expertise in sectors directly relevant to India’s demands, will be dedicated to building engagement with India.

DEPARTMENT OF STATE DEVELOPMENT P 3

A MESSAGE FROM JAY WEATHERILL AND MARTIN HAMILTON-SMITH P 4

A MESSAGE FROM SOUTH AUSTRALIA’S ECONOMIC DEVELOPMENT BOARD P 6

1 INTRODUCTION P 8

2 NATIONAL IDENTITIES P 10

2.1 Themes defining India’s national identity P 10 2.2 Themes defining South Australia’s identity P 11 2.3 India and South Australia – Similarities and differences in national identities P 11 2.3.1 India – Opportunities and challenges P 12 2.3.2 South Australia – Opportunities and challenges P 12

3 COMMON AND DIFFERENT VALUES AND KEY OPPORTUNITIES FOR ENGAGEMENT P 14

3.1 Key themes for broader engagement P 14

4 THE FRAMEWORK FOR ECONOMIC ENGAGEMENT P 16

4.1 Precursor – the Directions Paper P 16 4.1.1 How has the Directions Paper informed the South Australia-India Engagement Strategy? P 17 4.2 Structure of the Strategy P 17 4.3 Structure of Phase 1 of the Strategy P 18 4.4 Methodology P 19 4.4.1 Economic engagement with India P 20

5 OPPORTUNITIES FOR ECONOMIC ENGAGEMENT AND STRATEGIES FOR CONVERSION OF OPPORTUNITIES P 22

5.1 Aerospace and defence P 22 5.2 Energy and natural resources P 23 5.2.1 South Australian businesses participating in the Indian market P 23 5.2.2 Indian investments in South Australia P 24 5.3 Education P 25 5.4 Clean technology (including renewable energy, water and wastewater sector) P 26 5.4.1 Water and wastewater management P 26 5.4.2 Renewable energy (solar and wind power) P 27

6 INSTITUTIONALISING AND DELIVERING THE STRATEGY P 28

6.1 The role of the South Australian Government in facilitating economic engagement P 28 6.2 Delivery approaches P 29 6.3 Institutionalising the Strategy – South Australia-India Council P 29

CONTENTS

P 4 SOUTH AUSTRALIA – INDIA ENGAGEMENT STRATEGY

By recognising India as the largest democracy in the world and a burgeoning superpower, South Australia is well positioned to support India’s growth, and also to benefit from it.

South Australia and India have developed a strong partnership in recent years, built on close cultural, educational and investment ties. Our present friendship provides a sound foundation for the future growth of our economies to be linked.

This South Australia-India Engagement Strategy provides the roadmap to achieve this.

Enduring bilateral relations – recognisable through established trade and investment ties – can only prosper if supported by an understanding of Indian culture, values and society.

We can help India to achieve its social and economic goals by leveraging our industry strengths to respond to India’s bilateral trade demands.

For many years, we have exported increasing volumes of commodities to India – mainly minerals.

India is now Australia’s eighth largest trading partner for two-way trade in goods and services, and is South Australia’s fourth largest goods export market.

Our diverse, knowledge-rich economy boasts key strengths that appeal to India as a trading partner.

While we plan for minerals to remain a significant export for South Australia, it is important that we recognise India’s needs in other sectors, including education, energy, water and clean technologies.

Education is particularly important to both communities, a shared value. The education partnership we have forged, based around our world-class institutions and safe and supportive environment, underpins the role of higher education in India’s continuing growth and development. Education helps build the long-term friendships, understanding and respect that are important to our trade, investment and economic strategies.

The success of our partnership with India depends on collaboration – locally and abroad – between government, industry, the education sector and the broader community.

Given the strengths and abilities of both of our communities, we are confident that our relationship can benefit both societies well into the future.

Jay Weatherill Premier of South Australia

Martin Hamilton-Smith Minister for Investment and Trade

A MESSAGE FROM JAY WEATHERILL AND MARTIN HAMILTON-SMITH

South Australia is committed to strengthening our long-standing relationship with India.

DEPARTMENT OF STATE DEVELOPMENT P 5P 5

Our diverse, knowledge-rich economy boasts key strengths that appeal to India as a trading partner.


Our state’s participation in the global economy is essential to securing economic success. South Australia’s links with India, especially given its path to becoming the world’s third largest economy within the next two decades, must be central to this.

The South Australian Government’s Strategy for engagement with India is unique within Australia. There is a clear focus on trade and investment opportunities sustained by long-term engagement, including building on South Australia’s industry strengths in areas like resources, cleantech, aerospace and defence and education.

The rapid growth of South Australia’s resources sector can provide a comprehensive economic and social framework that will sustain prosperity.

There is opportunity for increased direct investment of Indian companies in mining and the support offered by South Australia’s Department of State Development has been recognised internationally as best in the world.

Building strategic partnerships between local and Indian companies not only creates export goods, expertise or services to India but also develops core competencies within the partnerships that can lead to the export of goods and services globally.

As well as promoting our resources sector, the Economic Development Board is a leading advocate on the future of manufacturing in South Australia and the evolution of our manufacturing base up the value chain.

Manufacturing is the largest segment of world trade. There are huge amounts of industrial research and development and consumer services invested in it. South Australia has identified manufacturing as a crucial component of its international knowledge economy.

The opportunities for long-term economic co-operation between India and South Australia are there for us to seize.

There are many opportunities for South Australian businesses to form partnerships with Indian companies to deliver world-class products and services here, in India and internationally.

Now is the time to make this happen.

Raymond Spencer Chair, Economic Development Board

Building strong relationships with India is vital if we are to secure new opportunities for South Australian businesses, as well as be a significant partner in India’s economic growth.

A MESSAGE FROM SOUTH AUSTRALIA’S ECONOMIC DEVELOPMENT BOARD

DEPARTMENT OF STATE DEVELOPMENT P 7DEPARTMENT OF STATE DEVELOPMENT P 7

The opportunities for long-term economic co-operation between India and South Australia are there for us to seize.


The South Australian Government released its Economic Development Directions Paper (“the Directions Paper”) for India in January 2012. The Directions Paper served as a platform for discussion on the issues and ideas South Australia must consider in developing a strategic approach to building long-term and meaningful trade, investment, education and cultural partnerships with India. The impetus for a strategic approach stemmed from India’s growing economic, political and geo-strategic importance in the world, and more specifically in respect of Australia’s and South Australia’s long-term economic well-being.

As highlighted in the message from the Premier in the Directions Paper,

“Unquestionably, India is poised to be a leader in our region – and while we would like to assume that our partner’s growth will also be our growth, this is by no means a given. We will need a range of initiatives to strengthen our partnership.”

The Directions Paper emphasised the need for a relationship with India which is broader than the current commodities-focused trade relationship between Australia and India. Along with its minerals and energy resources, South Australia is keen to harness the enormous potential for a broadly based alliance across multiple sectors. In particular, South Australia’s knowledge-rich economy now reflects many elements that hold appeal for India: education, energy, water, mining services, clean technology, defence – and of course, sport, arts, culture and film.

The Directions Paper proposed a long-term goal of a partnership with India as follows:

“To enhance and deepen economic engagement with India and build a long-term mutual partnership encompassing investment, trade and business, education, sport, culture, the arts and sciences including an exchange of people, skills and ideas.”

This goal has been formulated on the basis that while trade and investment is central to a bilateral partnership with India, any economic partnership can only thrive in the long-term if it is embedded in a broader relationship which embraces Indian culture, values and social workings.

This paper represents the first phase of the South Australian Government’s India Strategy. It establishes the framework for economic engagement by identifying certain key economic opportunities for engagement with India. It also seeks to provide the institutional framework required to convert opportunities into economic and commercial outcomes for the State and to drive efficiencies across government. In doing so, it establishes the vision for South Australia’s engagement with India over the next 10 years, with the support of a recommended governance and evaluation framework which seeks to ensure that the Strategy is flexible, responsive and relevant to changing economic and political environments.

A major focus of the South Australian Government’s approach to establishing its India Strategy is to ensure that it is episodic and incremental in nature and not a stand-alone, discrete event. Accordingly, the South Australian Government seeks to build on Phase 1 with subsequent analyses in a series of phases that follow. A brief overview of these additional phases is covered in this paper.

The South Australian Government has taken a critical step towards fulfilling its long-term goal with India by developing a consolidated India Strategy which seeks to drive economic outcomes within a broader framework of engagement with India.

INTRODUCTION1


The South Australian Government has identified a series of incremental steps which seek to ensure that in the long-term, South Australia is placed at the forefront of nations and states seeking to capitalise on India’s economic growth.


Australian perceptions of India, as portrayed in the Australian media, have grown significantly from a view encompassing issues primarily related to poverty, corruption, bureaucracy and cricket to a broader and more informed view over the last two decades. The focus is increasingly on India’s knowledge economy, geopolitical significance and cultural influence, particularly related to Indian food and cinema. Notwithstanding the growing levels of understanding in Australia of India, “it does not take much to trigger a reversion to old stereotypes.”1

By embracing the objective reality of the broader relationship between the two countries, it becomes possible to identify the roadmap required to reconcile differences and harness commonalities. This is firmly embedded in the view that “for Australia to secure its place in its dynamic region, a deeper understanding of, and sensitivity to the histories, politics, economies and cultures of our northern neighbours is essential.”2

This section represents an attempt to embed this view in South Australia’s relationship with India and facilitate the achievement of the South Australian Government’s mission to deepen economic engagement with India by fostering a deeper bilateral understanding of ‘common and different values’ and ‘shared futures’ as defined by the historical, political and cultural evolution of both India and South Australia.

2.1 THEMES DEFINING INDIA’S NATIONAL IDENTITY

Powerful key themes and drivers of historical change help define modern India, the result of thousands of years of history. Today’s India came into being in 1947. India is both an old country and a new one. These key drivers are diversity, democracy, secularism and demography.

For thousands of years, conquerors and raiders, and invasions and divisions dominated Indian history. The Greeks, Turks, Mongols and Persians, amongst others, were followed by the Portuguese, the Dutch, the French and the British. British influence on India has played a defining role in establishing English as India’s ‘associate official’ language.

British influence on India is also reflected through India’s legal system, parliamentary system, architecture, railways and sport, including cricket and hockey.

Because of its history of immigration, India displays extraordinary diversity across religion, language, caste and ethnicity. Over 500 princely states had to be dissolved and integrated into the Indian nation state at independence in 1947. To build the nation amid such heterogeneity required a thorough-going policy of secularism, embracing of diversity and ruling out the favouring of one belief or ethnic group over another. The very existence of India as a single nation state is an unparalleled historical achievement.

India is the world’s largest democracy. Its democratic temperament has also contributed to successful nation-building amidst extraordinary ethnic, religious, linguistic and cultural diversity.

Nationalism and democracy along with pluralism create ‘Indianess’ - a sentiment in favour of the creation of a national multilingual and multicultural environment. Different national and regional identities are part of what make India a nation state and the world’s largest democracy.

India’s future lies undoubtedly in its demography. In fact, demography is destiny for India. India’s vast population was often seen as an impediment to its economic well-being due to its links with mass poverty. Today, it can be seen very differently.

India’s economic potential is often emphasised through its young and highly-skilled working-age population and its falling dependency ratio, which is expected to create an unprecedented ‘demographic dividend’ stimulating India’s economic growth over the coming decades. By 2030, an additional 270 million Indians are expected to enter the workforce.3 To make the most of this dividend, India would need to complement its policies of liberalisation with regulation to capture growth and productivity. This means nurturing India’s young working-age population, by ensuring that world-class higher education and vocational education opportunities are available to them, and ensuring innovative and entrepreneurial labour markets to create sufficient productive employment opportunities.

2

1 Australia India Institute, Report of the Australia India Institute, Perceptions Taskforce, Beyond the Lost Decade, 2012, p. 57.

2 Australia India Institute, p. 61.

3 McKinsey Global Institute, India’s urban awakening: Building inclusive cities, sustaining economic growth, 2010, p. 8.

NATIONAL IDENTITIES


2.2 THEMES DEFINING SOUTH AUSTRALIA’S IDENTITY

Australia and South Australia are leaders in the creation of democracy and the practice of democratic representation. At federation in 1901, Australia achieved the status of a dominion within the British Empire. The federal franchise of 1903 established universal and equal suffrage amongst the white population, male and female.

In the early 20th century, Australia was just one of three small states that operated under democratic governance.4 In Australia, there has been no interruption to democratic rule since that time; no suspension of democratic liberties to compare to upheavals elsewhere.

The national temperament has been democratic and somewhat egalitarian from an early time, with South Australia playing a leading role in the development of Australia as a federation and democracy. On an innovative model championed by Edward Gibbon Wakefield, South Australia became a colony of free settlers, not convicts, enjoying civil and religious freedoms.

In South Australia, representative government, recognition of property rights, liberty and rule of law were embedded early and to an extent greater than anywhere else in the new continent.

Britain’s influence would be fundamental through to the 1970s. From Britain, Australia would acquire its national language, legal systems, its parliamentary model of representation, architecture, religions, and the sport of cricket.

Australian nationhood was spurred by various factors, including the experience of war and the economic forces unleashed by the first and second World Wars. First, these wars accelerated development of a ‘concentrated’ idiom or self-image of what it was to be an Australian. Second, the exigencies of war and security in peacetime drove industrialisation and the development of a home market, loosening extreme economic dependency on Britain. This in turn drove urbanisation and population growth, with a strong emphasis on immigration.

Engagement in the two World Wars has been seminal in the formation of Australian national identity. ‘Anzac’ became the defining figure of Australian nationhood. War helped instill a more fraternal notion of relationships between Australians (‘mateship’).

In fact, the pervasive ‘fair go’ concept has summed up the egalitarian and fraternal impulse of Australians. This can be taken as implying that all (regardless of income or status)

should abide by a set of rules of behaviour and be entitled to equal treatment, politically and before the law. More than this, it implies a sense of social justice that, regardless of inequalities of wealth and power, everyone is entitled to basic minima and opportunity for social mobility.

2.3 INDIA AND SOUTH AUSTRALIA – SIMILARITIES AND DIFFERENCES IN NATIONAL IDENTITIES

A deep democratic temperament is evident in both Australia and India. The creation of South Australia as a state of immigrants rather than as a penal colony reflects similarities to India’s history as a land of immigrants, albeit ‘a land of old immigrants’, often from millennia ago.

There are also strong similarities in the legal, political and cultural fabrics of both nations stemming from the deep British influence in both countries. A critical difference is that India is a republic whilst Australia continues to be a constitutional monarchy.

War and conflict have been defining in the histories of both nations over the last century. Both India and Australia fought ‘Britain’s wars’ in WWI. While Australia had its own direct participation in WWII, India played an integral role supporting British participation in WWII.

After a long period of non-alignment between India and Australia on foreign policy matters, broad similarities currently exist in the foreign policy agendas of both nations. Globalisation and consequent economic interdependence has brought both nations closer together, facilitating widespread diplomatic engagement.

The most striking differences are in the areas of urbanisation, demography and societal fabrics, which offer opportunities for engagement and influence between the two nations. While India can look forward to its demographic dividend, South Australia must find ways of countering its unfavourable demography if it is to achieve its full growth potential. And while India is a rapidly urbanising society, Australia and South Australia have been urban societies almost from the start.

On the other hand, South Australia’s world-class urban planning models, together with its leadership in certain areas of clean technology, could be instrumental in the development of Indian cities over the next two decades. Indian cities are expected to house approximately 40 per cent of India’s population by 2030.5 In India, critical sustainable urban design challenges exist in the areas of funding, governance and planning, in which Australia and South Australia can lend vital support to India. Similarly, India’s demographic dividend may be transferred to Australia as a market for South Australian products and services

4 In New Zealand, universal male suffrage was introduced free of property qualification in 1889, with women receiving their rights in 1893. New Zealand can be said to have become a democracy on achievement of dominion in 1907. In Norway, male franchise was made universal in 1898, with women achieving the vote by 1915.

5 McKinsey Global Institute, 2010, pp. 14, 37.


and increasing the impact of export-led growth on the South Australian economy, together with increased Indian investment in strategic South Australian industries.

Finally, each country can significantly influence the achievement of its societal aspirations through engagement. In particular, Australia and South Australia would benefit from India’s voracious quest for the development of a knowledge-intensive economy where national competitive advantages are reflected through innovation and productivity.

2.3.1 INDIA – OPPORTUNITIES AND CHALLENGES

The overwhelming opportunity for India is its demographic dividend with:

• India’s rising population in aggregate terms, which is now growing at a rate faster than that of China’s and expected to become the largest in the world by 20306

• the falling dependency ratio in India over the next two decades, while China’s is expected to increase7

• India expected to make the largest addition to the global labour pool over the next decade8

• India expected to add at least 270 million people to the working-age population by 2030.9

In addition, engagement with the Indian diaspora would be vital. Indians living in the United States, for instance, have been instrumental in influencing their government’s foreign policy towards India, advocating India’s interests during conflicts, and driving cultural and economic engagement and government-to-government links.

India’s rapid urbanisation is expected to bring a series of opportunities, including assisting with India’s continuing and extensive efforts to attract foreign capital and in creating greater opportunities for more broad-based economic growth across the Indian population, as urbanisation diversifies the opportunities for wealth creation beyond holding land.

India’s economic growth offers an unprecedented opportunity for India to lift millions of its citizens from below the poverty line into productive employment opportunities. India can achieve its agenda for social inclusion across crucial objectives including making fuel and fertilisers more affordable, investing more heavily in rural development, infrastructure, public health and education, and developing targeted programs to deal with malnutrition and food security. Finally, India has opportunities to augment its international influence through the exercise of soft power, as both the world’s largest democracy and a burgeoning economic superpower. India is likely to use its economic importance, geostrategic military relevance and soft power as part of its foreign policy agenda to fulfil its objectives at home and abroad.

India must meet key challenges to maximise these opportunities whilst it grows and urbanises. These include improving integrity and transparency in public policy-making and business, ensuring homeland security, countering environmental degradation across air, land, water and natural resources, and ensuring secure and clean sources of energy for the future. The South Australia–India Engagement Strategy recognises the significance of these challenges and the initiatives of the public and private sectors in India to alleviate the impact of these challenges on India’s long-term economic growth.

2.3.2 SOUTH AUSTRALIA – OPPORTUNITIES AND CHALLENGES

First, South Australia must position itself to capitalise on Asian growth. By 2030, China is expected to have overtaken the US as the world’s largest economy, and India is expected to leapfrog eight countries from its current 11th position to become the world’s third largest economy. South Australia’s distance from Europe and the US was once considered a competitive disadvantage. Today, South Australia is located close to the centre of world economic dynamism. The challenge for South Australia is to develop platforms for effective engagement, such as this Strategy. This would require that well-defined commercial strategic relationships are embedded in a sophisticated understanding of historical, cultural and societal complementarities and differences. This provides for understanding, respect, durability and robustness.

In coming years, South Australia has the potential to achieve strong, sustained growth, due largely to the strength of major projects in prospect led by, but not confined to, resources (connected to the growth of Asia) and defence. The opportunity is to leverage resources projects to develop local value chains, including high-value manufacturing and services, and other knowledge-intensive activities. This requires an active stance in relation to industry participation policy, and the development of local capacity and capability. If the value chain opportunities from the expansion can be captured, the mining expansion offers the State some of its brightest manufacturing and service industry opportunities.

South Australia has been a first-mover in deployment of green energy sources such as wind and geothermal power, together with other areas of clean technology. It is also a leader in sustainable agri-food and resource management techniques. South Australia’s expertise in environmental services and resource management, particularly of water, could be better aligned to commercial opportunities at home and abroad.

6 C. Wolf (et al.), China and India, 2025: A comparative Assessment, RAND Corporation, California, 2011.

7 C. Wolf (et al.), 2011.

8 United Nations data and Morgan Stanley, India to Outpace China’s Growth by 2013-15, 2010.

9 McKinsey Global Institute, 2010, p. 8.


South Australia also has a high-value opportunity to develop highly connected commercial centres of intellectual and technical excellence focused on problem solving in the State and the Asian region, and recognised internationally. International partners would accelerate diffusion and application of knowledge in the local economy and help build recognition internationally for South Australia’s capabilities and competitive strengths.

Finally, although Australia’s international role as a middle power in the region should grow, this cannot be assumed. Australia’s resource endowments place it in the frontline of Asia’s industrialisation and urbanisation. However, unless the form of Australia’s economic integration with Asia exceeds that of a commodity exporter, to embrace high-value commercial opportunities and collaboration on mutual challenges (food security, population health, climate change and adaptation, urban development and education, training and R&D), neither economic influence, nor political influence, would be optimised.

Australia has unique opportunities to engage with Asia positively. Australia can play a role as a middle power in the dual sense of being a medium power, as well as being able to operate between Asia and the US and Europe. Australia has opportunities to act as a bridge between the two, and to influence positively the form of its economic integration, and political engagement, with Asia.

South Australia’s strong growth outlook is challenged by its demography, a labour force participation rate which is below the national average, and environmental challenges to the State’s sustainable economic growth (in particular related to water and climate change). The South Australian Government is working to address each of these challenges through policies, programs and initiatives (for example the ‘Skills for All’ initiative) which are focused on reducing the impact of these challenges on the State’s long-term economic growth.

India’s population is expected to become the world’s largest by 2030.


Successful economic engagement between South Australia and India is a subset of a broader framework for engagement which also includes cultural, sporting, education and scientific engagement. Significant avenues exist for collaboration between India and South Australia in these areas, to complement economic and commercial engagement.

While this paper focuses on the key elements of the framework for economic engagement, for completeness, some of the broader themes for engagement between India and South Australia, which the South Australian Government also seeks to develop with India are also highlighted.

3.1 KEY THEMES FOR BROADER ENGAGEMENT

India has overtaken the United Kingdom as the number one source of permanent residents in South Australia.10 Indians are part of a wider multicultural environment in South Australia, particularly in Adelaide. An important medium for migration has arisen through Indian students migrating to study at South Australian universities and technical colleges and subsequently qualifying as permanent residents under the skilled migration pathway.

Leveraging education links to build engagement is vital. The history of migration to South Australia has created a series of cultural linkages between the State and India, reflected through Indian engagement in our major cultural events and initiatives. Adelaide’s world-famous Festival of Arts has long featured Indian performers and artists, beginning with the Bhaskar Dance Company in 1962, and including the 2006 Writers Week focused on Dutch and Indian writing and including the famous Indian author Vikram Seth. The same could be said about participation of Indian performers and intellectuals at the WOMADelaide festival (with Ravi Shankar performing in 2010) and Festival of Ideas. In 2012, the OzAsia festival focused on India.

Opportunity also exists to leverage cricket ties. India has the world’s largest cricket audience and South Australia is home to the iconic Adelaide Oval, known and loved by cricket fans the world over. The scene of many famous test confrontations, it hosted the 2012 Australia Day test match between Australia and India.

The influence of Australian culture in India has been primarily through food, wine, sport and education, all of which are integral elements of Australia’s export mandate. While cricket and hockey have been natural points for sporting engagement between the two countries, middle-class Indians often have a well informed understanding of Australian rules football, rugby union and rugby league, Australian motorsport and tennis, thanks to the availability of world-class satellite television in India covering virtually every major sport and sporting channel in the world.

India’s history is one of immense scientific achievement, including strong programs in science and technology covering defence, space, telecommunications and IT, energy security and biotechnology. South Australia’s significant successes in the sciences include providing the nation with its first three Nobel prizes for science: the Braggs and Florey. The main vehicle for building scientific cooperation is the Australia–India Strategic Research Fund. It is Australia’s largest fund dedicated to bilateral research with any country, and focused in areas such as renewable energy, earth sciences, nanotechnology, astronomy and astrophysics, environmental sciences, and biotechnology. The Grand Challenge Fund is for collaborative research in the areas of the greatest challenges faced by the two countries, including in energy, food and water security, health and the environment. Collaborative research projects with South Australia’s universities and Indian partners represent high-value opportunities to embed deep and mutually beneficial engagement.

3

10 The Directions Paper, p. 4.

COMMON AND DIFFERENT VALUES AND KEY OPPORTUNITIES FOR ENGAGEMENT

DEPARTMENT OF STATE DEVELOPMENT P 15DEPARTMENT OF STATE DEVELOPMENT P 15

India is emerging as one of our most important partners and with the capacity to contribute greatly to the South Australian economy in the years to come. Geoff Knight, Chief Executive, Department of State Development


4.1 PRECURSOR — THE DIRECTIONS PAPER

The Directions Paper released by the South Australian Government noted the extensive and valuable work previously undertaken to build relationships and engagement with India, including high-level political engagement. Former Premier Mike Rann made six official visits over seven years, and Premier Jay Weatherill supported Labor policy change to allow uranium sales to India. In addition, the appointment in 2008 of Brian Hayes QC as Special Envoy to India and the establishment of an in-country commercial representative office were cited, together with the building of relationships with key Indian corporations such as Tata, Adani and Reliance, and facilitation of inbound visits by Indian companies. The India-related activities of bodies including the former Department for Manufacturing, Innovation, Trade, Resources and Energy (DMITRE), the Department of Primary Industries and Regions (PIRSA), the former Department of Further Education, Employment, Science and Technology (DFEEST), Education Adelaide, TAFE SA and our universities, the South Australian Tourism Commission, Defence SA and the Water Industry Alliance were also touched on.

Noting the value of these activities, the Directions Paper was nevertheless a recognition of the need to lift the State’s engagement to a more sustained, coordinated and strategic level, as urged in particular by the Economic Development Board, and its Chair, Raymond Spencer.

The Directions Paper proposed key principles for engagement with India, in particular that:

• South Australia will need to be smarter with its resources than Australian states that have access to more funding

• South Australia must be recognised as a culturally sensitive, multicultural and safe living environment

• the existing productive relationship must develop into a respectful, sustainable, mutually-profitable, bilateral partnership

• a successful framework will be based on the value of the people-to-people interactions generated by the activities of government agencies, public bodies and businesses

• the scope of cooperation between industry and government needs to be expanded, and better use should be made of Federal programs (for example, the Australia-India Free Trade Agreement that is currently being negotiated).

In addition to these, the Directions Paper identified that future strategy should:

• focus on partners — South Australia should focus on targeting key Indian businesses which best align with the industries and strengths the State has to offer. Priority should be given to businesses seeking international economic development opportunities and long-term relationships

• focus on states — South Australia should look to focus its relationship with five key Indian states

• follow an industry cluster approach — specific strategies should be established for industry sectors which reflect synergies among them.

4 THE FRAMEWORK FOR ECONOMIC ENGAGEMENT

DMITRE publicly sought information, ideas and feedback from South Australian and Indian businesses and organisations that stand to benefit from future economic, social and cultural ties between South Australia and India.

In particular, the Directions Paper sought input on:

• Which Indian states should South Australia target?

• Which industry sectors should be developed?

• What are the key commercial opportunities?

• What processes are needed to ensure relationships developed are effective?

• What should be our critical initiatives in the areas of high-value manufacturing, resources services and technology, clean technology and knowledge intensive services?

As part of consultation on the Directions Paper, industry roundtable sessions facilitated by the Australia India Business Council and KPMG were held on 23 January 2012 and 21 March 2012. These sessions involved participation from over 100 representatives from business, government and industry groups in the South Australian market. In addition to sharing information on the Directions Paper, these sessions provided participants with the opportunity to share their views on the approach, structure and relevance of the Directions Paper.

In addition, formal written submissions were received by DMITRE from the following individuals and private sector and public bodies:


PHASES FOCUS

4.1.1 HOW HAS THE DIRECTIONS PAPER INFORMED THE SOUTH AUSTRALIA-INDIA ENGAGEMENT STRATEGY?

The key themes identified in the Directions Paper have been carried into the development of the South Australia–India Engagement Strategy (the Strategy), with two exceptions.

Rather than the proposed approach focusing on five states and several industry clusters, a more detailed level of

analysis was sought for key sectors which could inform specific strategies.

Consequently, the focus is initially on four sectors where South Australia has particular strengths and to consider potential opportunities in a very targeted way. For example, rather than a cluster and ‘top down’ approach for all major sectors, specific value chain elements in key sectors were identified and subjected to a detailed market assessment for potential opportunities.

Where this approach identifies key regions for sectoral activity, regionally focused strategies would then be developed.

In essence, for the Strategy, a synergistic sectoral analysis of South Australian industries with Indian industries has been undertaken to complement demand/supply side strengths and weaknesses in each economy. The particular methodology is discussed in section 4.4 on page 19.

4.2 STRUCTURE OF THE STRATEGY

This document forms ‘Phase 1’ of an ongoing effort by the South Australian Government to drive economic engagement with India. The phases that will follow are briefly described below.

Detailed industry analysis and market opportunities of four sectors (aerospace and defence, energy and natural resources, education and training and clean technology); governance and implementation approach

1 Framework and strategy (initial project)

2Additional sector analysis

Additional sectoral analysis (for example, the automotive sector, food and wine, IT services, etc)

3Targeted mission strategies

Execute more focused trade and investment mission strategies aligned to the Strategy and priority opportunities identified

4 Economic modelling of impact of the Strategy

Measure impact of the Strategy to the economy (economic activity, value add, employment, and flow on benefits to the community)

5Biennial review and update

Review, evaluation, and update of the Strategy by the South Australia-India Council

NN Associates, CSIRO, Business SA, Ai Group, CFR Trust, Dok International, PIRSA, Water Industry Alliance, Malani Consultancy, SA Tourism Commission, Department of the Premier and Cabinet, SA Overseas Representative Office – India, Associate Professor Peter Mayer (University of Adelaide), and then Vice Chancellor Peter Høj (University of South Australia).


4.3 STRUCTURE OF PHASE 1 OF THE STRATEGY

The first phase of the Strategy (this paper) comprises a number of key stages of analysis on which to focus South Australian activities in relation to India. This body of work and the market intelligence which sits behind this provide a platform and reference point for the proposed South Australia-India Council and the Department of State Development to drive implementation. The first phase of the Strategy was compiled around four distinct stages of analysis.

In this regard, the Department of State Development engaged KPMG to work collaboratively with the South Australian Government on the analysis undertaken across the four abovementioned stages. The analysis of South Australian industries was undertaken by the Department of State Development drawing on input from Defence SA, the Defence Teaming Centre, DFEEST, and Zero Waste SA. KPMG and the Department of State Development worked collaboratively in synthesising the key themes from the Indian and South Australian analysis to pinpoint specific economic opportunities for South Australia with India.

STAGE 1Contextual assessment and ‘shared futures’

Analysis of national Identities — key themes and ideas from India and South Australia, providing a reference point to the similarities and differences which will shape future engagement

Common and different values — cultural, sporting, arts, sciences and education engagement opportunities

Economic engagement — providing an overview of the Indian economy and the trade and investment relationship between India and Australia (and South Australia)

STAGE 2Analysis of industries and markets

Four priority sectors for industry analysis:

1. Aerospace and defence 2. Energy and natural resources 3. Education and training 4. Clean technology

STAGE 3Opportunity assessment and ‘gap analysis’

Identification of gaps/opportunities for businesses engaging with India

• Prioritisation of commercial opportunities based on identified criteria

• Potential market entry and trade and investment strategies

STAGE 4Implementation and governance

Institutionalising the Strategy within South Australian Government

• Resource allocation and disposition

• Potential performance targets and evaluation strategies


4.4 METHODOLOGY

The central component in developing this phase of the Strategy is the detailed analysis contained in Stages 2 and 3, in particular around analysis of markets, industries, value chains, and opportunities for trade and investment.

This has been based on a rigorous and detailed competitive analysis to identify specific commercial trade and investment strategies.

The figure below describes the detailed process undertaken for each element of the value chain within the four priority sectors.

In addition to identifying very targeted commercial opportunities, this analysis provides a body of work and contextual analysis to inform future work of the South Australia-India Council, future missions to India, and other implementation activities, including engaging with South Australian businesses on market issues and opportunities which can then inform their own business planning strategies, and qualification of opportunities.

Market assessment

For each sector in India and South Australia detailed analysis was undertaken of:

• Size of market

• Structure of the market

• Growth expectations

• Market supply/demand drivers

• Key domestic actors

• Regulation

• Competitive intensity

• States/cities central to sectoral activity

Foreign participation

For each sector in India detailed analysis was undertaken of:

• Level of foreign participation in the market

• Key foreign players

• Business models and entry strategies

• Factors driving Indian investments in offshore markets

• Case study of market entry

Opportunity analysis

Based on the market assessment and assessment of foreign participation, analysis was undertaken of opportunities with India in the four sectors. This included consideration of opportunities in the following order:

• Identifying the universe of market opportunities in each sector

• Shortlisting opportunities based on the market assessment and foreign participation analysis

• Detailed assessment of shortlisted opportunities against particular criteria (discussed in further detail in section 5) to identify the most credible opportunities

Identify targeted trade and investment opportunities for South Australia:

• Opportunities for trade in specific parts of the value chain

• Potential company targets and partners

• Relevant regulatory and policy settings

• Entry strategies

Prioritised commercial

opportunities

PROJECT STAGE 2: Analysis of industries and markets

PROJECT STAGE 3: Opportunity assessment and gap analysis


4.4.1 ECONOMIC ENGAGEMENT WITH INDIA

In applying the methodology above, the Strategy utilised the platform of key existing economic complementarities between the South Australian and Indian economies.

The Directions Paper discussed the economic growth experienced by the Indian economy since 2006 and the trade and investment relationship between India and Australia (and South Australia). The Strategy has built on this platform established for engagement by highlighting the following:

• key indicators of India’s economic performance and the major reforms driving the growth agenda across India’s foreign direct investment policy, Reserve Bank of India guidelines (such as the External Commercial Borrowings guidelines), the proposed Direct Tax Code and Goods & Services Tax regime and the National Manufacturing Policy

• the key elements in the investment relationship between India and Australia (and South Australia) with a focus on analysing bilateral investments made across sectors, players and key factors driving investment strategies. This information was pivotal in guiding the choice of the sectors which are a focus of the Strategy.

The Department of State Development will hold workshops with industry participants from the various sectors that should benefit from the Strategy. At these workshops, further information will be shared on the major indicators of India’s economic performance and reforms driving the Indian growth agenda.

4.4.1.1 KEY ENABLERS OF ECONOMIC ENGAGEMENT – GOVERNMENT–TO–GOVERNMENT ENGAGEMENT AND UNDERSTANDING THE INDIAN WAY OF DOING BUSINESS

Effective engagement requires the South Australian Government and South Australian businesses to understand the importance of government in Indian commerce and of government-to-government relations generally. Relationships with key state and local Indian governments need to be developed in tandem with India’s central government and its key departments. These efforts must be undertaken alongside the work of Australian Federal Government departments such as the Department of Foreign Affairs and Trade.

Significant opportunities exist for South Australia to improve and elevate interactions with Indian state and local governments, particularly where these align to a concentration of sectoral activities targeted by this Strategy.

Engagement could include Memoranda of Understanding and cooperation agreements in researching and implementing solutions to problems in areas such as water, waste management, medical services, education and training, mining, resources and energy, together with possible other collaborations. A South Australia–India Council, consisting of individuals from the public and private sectors with connections and subject matter expertise in engagement with India, together with the Special Envoy to India, Brian Hayes QC, would guide the choice of states and agreements to be targeted.

At the business-to-business level, South Australian companies need to understand the unique business models adopted in India and the associated behaviours and values required to sustain and deepen relationships with these businesses. The dominant business model in India is the family business model, which often reflects limited separation between ownership and management. This is fundamentally different to broadly listed businesses common in Australia, where there is significant separation between ownership and management. As a consequence, obtaining access to the promoters of Indian businesses, and ultimately their professional and personal regard, are critical elements in the economic opportunity development process.

Further, business decisions often occur over a longer timeframe than that to which Australian businesses are accustomed. Given the often long lead times and extensive negotiations required to develop and conclude commercial arrangements with Indian businesses, it is pivotal for South Australian businesses to reflect resilience, flexibility and an entrepreneurial spirit when engaging with India.

Similarly, it is important to develop long-term relationships with the relevant chambers of commerce in India, including the Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry. South Australia has strong relationships with these chambers with a focus on developing sustainable long-term engagement strategies with them.


The Department of State Development will hold workshops with industry participants from the various sectors that should benefit from the Strategy.


This section details the key outcomes from the application of the methodology highlighted in section 4.4. In particular, the following is summarised for each of the four sectors considered as part of this phase of the Strategy:

• the key product segments and/or value chain

• the parameters used to filter shortlisted opportunities (from a universal list of opportunities from across product segments and/or the value chain) to a final, more credible list of opportunities

• the next steps for dissemination of information related to sector-specific opportunities and suggested trade and investment strategies to convert opportunities into commercial outcomes for South Australia.

5.1 AEROSPACE AND DEFENCE

The analysis reflected that the opportunities in this sector were primarily for South Australian participation in the Indian aerospace and defence industry (e.g. through trade/supply) rather than through the attraction of Indian foreign direct investment in South Australian defence projects. Accordingly, the analysis below highlights the process undertaken for identifying opportunities for participation by South Australian businesses in the Indian aerospace and defence industry.

A filtering approach was applied across all product segments of the aerospace and defence industry in India to shortlist an initial list of opportunities. These product segments are highlighted below.

The next step included further filtering of shortlisted opportunities using the set of parameters highlighted below.

Credible opportunities were identified in the following areas for South Australian businesses to participate in the Indian aerospace and defence industry.

5 OPPORTUNITIES FOR ECONOMIC ENGAGEMENT AND STRATEGIES FOR CONVERSION OF OPPORTUNITIES

Aircraft and aeroengines Naval systems Land systems and

electronics Homeland security

Opportunity scale

and growth outlook

Competitive intensity

Regulatory and policy

environment

Ease of market entry

Criticality of the need

Electronic systems and systems integration Maritime engineering and infrastructure


The Department of State Development and Defence SA plan to convene a workshop of local businesses and relevant technical experts in this sector. The workshop will pinpoint opportunities and provide further information about:

• the specific nature of each of the opportunities highlighted as credible in the Indian market and synergistic to South Australian industry

• the key industry players in India that should be targeted in relation to each of the opportunities

• the regulations likely to impact targeting the opportunities in the Indian market

• the suggested next steps and strategies for conversion of opportunities.

5.2 ENERGY AND NATURAL RESOURCES

The analysis reflected that there are credible opportunities in this sector in relation to:

• South Australian businesses participating in the Indian market

• Indian businesses investing in South Australian businesses and projects.

5.2.1 SOUTH AUSTRALIAN BUSINESSES PARTICIPATING IN THE INDIAN MARKET

A filtering approach was applied across seven key segments of the energy and natural resources sector in India to shortlist an initial list of opportunities. These segments are highlighted below.

Natural gas Gold Copper Iron ore Uranium Zircon Mining

services


Opportunity scale and growth

outlook



environment


Located in Adelaide, Techport Australia is Australia’s premier naval industry hub.


Acquisition of natural gas assets

Acquisition of copper mining assets

Acquisition of iron ore mining assets

The following credible opportunities for attracting Indian investments in South Australian energy and natural resources projects were identified:

The Department of State Development plans to convene a workshop of local businesses and academic researchers and technical experts in this sector. The workshop will pinpoint opportunities and provide further information about:

• the specific nature of each of the opportunities highlighted as credible in the Indian market (e.g. opportunity for the supply of know-how, commodities, services, etc.) and synergistic to South Australian industry. The workshop will also highlight the specific nature of the opportunities for attracting Indian investment into South Australia

• the key industry players in India that should be targeted in relation to each of the opportunities



Data on South Australian mines compiled by The Department of State Development at: http://www.pir.sa.gov.au/minerals/mines__and__developing_projects

Export of LNG to India Export of copper to India Export of uranium to India

The export of uranium to India is dependent on changes to Australia’s policy to supply uranium to India. The positive change in the Federal Labor Party’s policy in November 2011, together with the Australian Government’s drive to establish a bilateral safeguard agreement to allow exports to India, should be noted.

5.2.2 INDIAN INVESTMENTS IN SOUTH AUSTRALIA

The likelihood of Indian investment in South Australian natural gas, gold, copper, iron ore, uranium, zircon and mining services businesses and projects was evaluated against the following criteria:

Import dependency

Experience in acquisition of foreign mining

assets

Industry plans and strategy


environment

The following credible opportunities were identified for South Australian businesses to participate in the Indian energy and natural resources sector.

A consolidated India Strategy is a vital step in targeting South Australia’s future economic relationship with India and will help maximise investment and trade opportunities. Brian Hayes QC, Special Envoy to India



Opportunity scale and

growth outlook




environment

Ability to differentiate

Higher education – management courses

Higher education – engineering courses

Vocation training across the sunrise sectors

The following credible opportunities were identified for South Australian universities and technical colleges to participate in the Indian higher education sector:

ValuePre-schools PremiumSkill enhancement in

sunrise sectorsMass

• Science, commerce, humanities and other general streams of higher education

Value

• Engineering• Management• Medical

Niche

• Fashion technology, courses in oil and petroleum, etc.

• K-12 schools offering Indian curriculum

• K-12 schools affiliated to international/ dual boards (Indian and international)

• Vocational training opportunity in retail, IT/ITES, aviation and hospitality, healthcare and education services

Pre-schools K-12 schools Higher education Vocational and other skill development

5.3 EDUCATION

South Australia has been highly successful in the attraction of Indian students to the State. This will remain a primary opportunity and focus of the State’s education institutions into the future. The objective of this Strategy is to isolate additional opportunities. The analysis reflected that the additional opportunities in this sector were primarily for South Australian participation in the Indian education sector rather than through the attraction of Indian participation in the South Australian education sector. Accordingly, the analysis below is dedicated to highlighting the process for identifying opportunities for participation by South Australian universities, and private higher-education and vocational education providers, in the Indian education sector. These opportunities will need to be pursued by targeting high-quality offerings, rather than highly price-sensitive and risky segments. This is likely to mean an emphasis on niche rather than mass education, at least initially.

A filtering approach was applied across all segments of the education sector in India to shortlist an initial list of opportunities. These segments are highlighted below.

Continued attraction of Indian students to South Australia


The next step included further filtering of shortlisted opportunities using a set of parameters highlighted below:

Opportunity scale and

growth outlook




environment

Ability to differentiate

Desalination Integrated municipal water projects

Industrial wastewater treatment

The following credible opportunities were identified for South Australian businesses to participate in the Indian water and wastewater sector:

Source augmentation

Raw water transmission

Water treatment

Storage and distribution

Sewage collection

Wastewater treatment and

disposal

• Desalination

• Wastewater treatment and recycling

• Drip and sprinkler irrigation systems

• Rain water harvesting

• Bulk water transmission

• Municipal water treatment plants

• Industrial water treatment plants

• Water distribution networks

• Water collection network

• Municipal wastewater treatment plants

• Industrial effluent treatment plants

Integrated municipal water projectsBulk water transmission/water treatment/distribution/wastewater treatment/operations and maintenance

The Department of State Development and DFEEST plan to convene a workshop of South Australian universities and technical colleges. The workshop will pinpoint opportunities and provide further information about:

• the specific nature of each of the opportunities highlighted as credible in the Indian market and synergistic to South Australian universities and technical colleges

• the business models adopted by foreign players targeting the Indian higher education and vocational training sectors



5.4 CLEAN TECHNOLOGY (INCLUDING RENEWABLE ENERGY, WATER AND WASTEWATER SECTORS)

5.4.1 WATER AND WASTEWATER MANAGEMENT

A filtering approach was applied across all segments of the water and wastewater sector in India to shortlist an initial list of opportunities. These segments are highlighted below.


As a next step, the Department of State Development, together with Zero Waste SA, plans to convene a workshop of South Australian businesses and academic researchers and experts in this sector. The workshop will pinpoint opportunities and provide further information about:

• the specific nature of each of the opportunities highlighted as credible in the Indian market and synergistic to South Australian businesses



5.4.2 RENEWABLE ENERGY (SOLAR AND WIND POWER)

A filtering approach was applied across the solar and wind energy sectors in India to shortlist an initial list of opportunities.

Based on the analysis of the value chains for the solar and wind energy sectors in India, and the application of this analysis to the South Australian context, the most credible opportunities in this sector were found to be with the Indian wind-turbine manufacturers seeking to develop their global footprint.

Indian wind-turbine manufacturers have assumed recognition in the global market place and have been fairly aggressive with their overseas expansion. The front-runner among them has been Suzlon, which has a presence across multiple countries globally. Suzlon has already created a dominant position in the Australian market and is in the process of setting up a 600MW wind farm in South Australia, with an investment of AUD1.3 billion.

Solar PV

Solar Thermal

Solar cell supply

Solar module supply

Solar thermal power equipment

Solar equipment

Solar EPC(engineering procurement

and construction)

Solar developer

Wind turbine manufacturers Wind EPC Wind power

developer

Solar-energy sector value chain

Wind-energy sector value chain

Hallett wind farm in South Australia’s mid north.


The institutionalisation and effective implementation of the Strategy is critical to realising the potential benefits of engagement with India. The Strategy must be embedded in a robust institutional form with strong targets to provide it with the basis to be relevant and responsive to the needs of South Australia. In this regard, the key issues that have been considered include:

• the role of the South Australian Government with respect to economic engagement with India

• the optimal and most effective approaches for delivery and implementation of the Strategy

• the desired model of delivery and the required allocation and disposition of resources

• the institutional and governance arrangements needed to drive the Strategy

• the approach for assessing the effectiveness of the Strategy over time.

The Strategy will be embedded by giving it a unique institutional form, through a South Australia–India Council, constituted as a public-private partnership comprising experts from business, government and the community to drive the State’s engagement with India over the next 10 years.

Responsibility for the implementation and delivery of the Strategy will rest with the Department of State Development. This will require a dedicated, fully aligned India team operating in both India and South Australia. Under this mode, the key principles and attributes of the model to deliver against the Strategy are:

• high-quality economic outcomes for South Australian businesses and the State economy

• strategic alignment, providing focus on the major opportunities identified by the Strategy

• connectivity, ensuring South Australian business, industry associations and relevant government bodies are connected to key players in India

• expertise, to ensure the best possible analysis and information is mobilised to support the Strategy

• flexibility, to respond well to changes and provide for improvements to the Strategy over time, as well as to take advantage of tactical opportunities as they arise.

These should be the key ingredients of a unique South Australian approach, the rationale for which, and associated implementation issues, are further elaborated on in the following sections.

6.1 THE ROLE OF THE SOUTH AUSTRALIAN GOVERNMENT IN FACILITATING ECONOMIC ENGAGEMENT

The foregoing analyses have been directed at the identification of complementarities or synergies between existing or emerging economic and industrial strengths in the South Australian economy, with relevance to the demand side and developmental needs of Indian companies and the Indian economy. This is the basis of the development of complementary trade and investment flows of mutual benefit to India and South Australia. Taking this approach should help effectively target resources to the areas of greatest value to South Australian businesses seeking to engage with India, and to the economies of South Australia and India through long-term engagement.

A central role of governments in economic development is the provision and leveraging of strategic information, and building common and cooperative action plans to position their economies to be on the winning - rather than losing - side of change. This approach enables accelerated learning, together with better facilitation and coordination of effort. Directing effort and resources to high-value propositions is of key importance.

In this connection, Austrade’s recent review has yielded useful conclusions on how to maximise the value proposition of government in international engagement. These conclusions are broadly aligned with the South Australian Government’s approach to evaluating the effectiveness of its Indian engagement, which include:

• ensuring an increased level of awareness among Indian firms of the presence, successes and capabilities of South Australian firms, and vice versa; and

• increasing South Australian businesses’ level of knowledge about operating in India.

In relation to the above two goals, a critical function of the South Australian Government should be sharing market insights and intelligence on the Indian market with South Australian businesses. More specifically, the South Australian Government aims to:

• support South Australian businesses identify and assess business opportunities with India and help them capture opportunities to either trade with India or attract investments from India into South Australian projects

6 INSTITUTIONALISING AND DELIVERING THE STRATEGY


• facilitate business matching exercises for South Australian businesses with Indian counterparts by sharing networks and contacts in India

• inform the Indian market of investment opportunities in the South Australian economy and facilitate inward foreign direct investment from India into South Australia

• drive deeper ties and engagement with central, state and local-level governments and their departments in India to promote the interests of South Australia in India.

The South Australian Government will seek to complement Austrade’s value proposition and prevent duplication of effort. At the same time, it will be necessary for the State to build South Australia-specific capacity in critical areas to ensure that South Australian businesses can most effectively target economic opportunities within India.

In line with the focused, strategic approach trained upon targets where South Australia can add most value, the majority of effort would be on:

• supporting small and medium sized South Australian businesses achieve their export objectives with India (in addition to the export efforts of South Australia’s universities)

• supporting large Indian businesses (which are experienced in making international investments) make investments in South Australian businesses and projects.

In addition the Strategy will ensure connectivity to large South Australian businesses seeking to engage with India on key opportunities.

As previously highlighted, the support provided would be in the nature of the provision of market insights and intelligence and facilitation in relation to the pursuit of commercial opportunities (including business-matching exercises).

6.2 DELIVERY APPROACHES

What does South Australia need in order to deliver effectively against the Strategy? What resources does it need, if any, in India? Or, can South Australia deliver the Strategy for engagement with India entirely from South Australia, without a presence in India? Four options for delivery of the Strategy were considered:

1. No specific trade or investment support structure for the Strategy

2. Support for delivery of the Strategy through dedicated resourcing in South Australia only

3. Support for Strategy delivery through India-based resources only

4. Coordination of trade and investment opportunities through a joint South Australia-India presence, forming a single India team.

Only a coordinated presence of a single India team involving a joint presence in South Australia and India was found likely to maximise outcomes against the five key criteria of economic outcomes, strategic alignment, connectivity, expertise and flexibility. This is the preferred approach.

The South Australian Government’s Strategy for engagement with India is unique in Australia. It combines a focus on clear and identified opportunities for trade and investment, alongside the imperative of grounding these in a sustained, long-term engagement over a range of institutional and cultural levels.


6.3 INSTITUTIONALISING THE STRATEGY – SOUTH AUSTRALIA-INDIA COUNCIL

The South Australian Government’s Strategy for engagement with India is unique in Australia. It combines a focus on clear and identified opportunities for trade and investment, alongside the imperative of grounding these in a sustained, long-term engagement over a range of institutional and cultural levels. High-value economic relationships need to be based in cultural and historical understanding and mutual respect. The South Australian Government aims to institutionalise such a relationship through the South Australia-India Council.

The Directions Paper expressed the State’s goal as being

“to enhance and deepen economic engagement with India and build a long-term mutual partnership encompassing investment, trade and business, education, sport, culture, the arts and sciences including an exchange of people, skills and ideas.”

Consistent with this goal, the South Australian Government will establish the South Australia-India Council (“the Council”) as a joint public-private board responsible for the governance, oversight, and progressive refinement of the Strategy.

The Department of State Development will have responsibility for implementing and operationalising the Strategy, through the India team.

The Council will also be responsible for effectively embedding high-quality engagement with India across government, educational institutions, cultural and sporting bodies, and targeted businesses and sectors, and should help ensure the coordination, alignment and efficiency of activities. The Council will be responsible for evaluating progress by agencies against the Strategy, and will report publicly on a biennial basis.

The Council will have strong relationships with Cabinet, the Department of State Development and other South Australian government agencies, South Australian businesses and industry associations, the Special Envoy to India and South Australia’s overseas representation in India. The approach maximises involvement across the relevant sectors of industry and collaboration between private and public-sector players, together with connectivity and alignment between the strategic direction set by the Strategy and its operationalisation and implementation by the Department of State Development.

The key objectives of the Council will be to:

• provide governance and oversight of the implementation and progressive refinement of the 10-year Strategy, including the five phases of its development

• evaluate the implementation of the 10-year Strategy using appropriate and rigorous evaluation tools and measures to assess progress against the key targets of the Strategy, for public biennial reporting

• lift South Australia’s medium and long-term cultural, sporting, scientific and economic engagement with key Indian public authorities, sectors, businesses and communities and individuals

• lead South Australia’s engagement with India, connect decision-makers and influencers, access expertise, and align resources and effort to the 10-year Strategy.

The Council will have ongoing ownership of, and responsibility for, the evaluation of the effectiveness of actions under the Strategy. The Council will provide a public high-level biennial report, together with regular reports to Cabinet.

The public report will provide answers to the questions:

• Where are we in our engagement with India?

• Where do we intend to be in this relationship in two, five and 10 years time?

• How do we get there?


There are many opportunities for South Australian businesses to form partnerships with Indian companies to deliver world-class products and services here, in India and internationally. Raymond Spencer, Chair, Economic Development Board


DEPARTMENT OF STATE DEVELOPMENT

Level 9, The Conservatory131-139 Grenfell StreetAdelaide, South Australia 5000

GPO Box 1264Adelaide, South Australia 5001DX 452

T. +61 8 8303 2400F. +61 8 8303 2410E. [email protected]

DIVISIONS AND LOCATIONS:

Office of the Chief ExecutiveInvestment, Trade and Strategic ProjectsManufacturing and InnovationStrategy, People and Culture

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T. +61 8 8303 2400F. + 61 8 8303 2410E. [email protected]

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Energy Markets and ProgramsOffice of the Technical Regulator

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T. +61 8 8303 2204F. +61 8 8303 2964

www.statedevelopment.sa.gov.au

Published July 2014.

No responsibility for any loss or damage caused by reliance on any of the information or advice provided by or on behalf of the state of South Australia, or for any loss or damage arising from acts or omissions made, is accepted by the state of South Australia, their officers, servants or agents. Produced by the South Australian Department of State Development © July 2014. Content correct at time of printing.

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