India seeks free trade pact with Australia

Easier visa requirements and improved access to government markets top the wish lists of Indian technology companies as Australia and India consider a free trade agreement.

Firms such as Satyam Computer Services and iGate Global Solutions have said an agreement could open the door to more partnerships between Indian and Australian businesses in sectors ranging from financial services to mining and aviation.

IGate Asia-Pacific and Japan vice-president Naveen MV said such a pact would be beneficial to both countries and help to redress a trade imbalance heavily skewed in Australia’s favour.

‘India may not have all of the experience or maturity in many areas like infrastructure or communications or aviation services, so I see a free trade agreement presenting a lot of opportunities for Aussie companies to go to India,’ he said.

‘From an Indian perspective, a free trade agreement would open up access to the Australian services market, which is where the Indian IT sector could benefit tremendously.

‘That could include loosening up visa restrictions or opening up IT services or business process outsourcing in the government and private sectors.’

Indian IT exports to Australia for the year to March represented between one-third and half of the country’s total exports to Australia and were worth about $US400 million, he said.

Opportunities for partnerships could include Australian mining services firms teaming up with Indian information technology companies to chase opportunities in India’s resources sector, he said.

Satyam Computer Services Australia-New Zealand manager Deepak Nangia agreed, and pointed to India’s finance industry as an area for possible partnerships between Australian banks and Indian IT companies.

‘A trade agreement would provide the environment to increase the amount of trade between the two countries,’ Mr Nangia said. ‘From our perspective it’s a very good step but we don’t know what the details of an agreement would be.’

It would encourage partnerships, ‘which we haven’t seen a lot of in the last few years’.

A free trade pact could also spur Australian governments at state and federal level to embrace Indian IT and business process outsourcing providers both domestically and offshore, Mr Nangia said.

‘I would reckon there are some departments that don’t necessarily hold a lot of critical information - I’m not talking about the Australian Taxation Office, for example - that could open up.’

Departments involved in the education and transport sectors, which still have large information and communications technology budgets, could be prime candidates.

Other topics high on the list of issues that Indian technology firms would like addressed in prospective free trade discussions include availability and ease of access to visas. Infosys Australia chief executive Gary Ebeyan said he hoped a free trade agreement would facilitate the movement of IT workers between India and Australia and ease concerns that projects could be slowed by visa processing requirements. ‘There are a number of things the FTA could help,’ Mr Ebeyan said.

‘One is the delay in visa processing and the stringent checks we have to go through to get people from our overseas development centres to come and join our workforce here.

‘An FTA can certainly help that process. The Department of Immigration and Citizenship has done a fantastic job and continues to do so, but it’s quite a heavy workload for both them and us.

‘An FTA may ease that process.’

Mr Ebeyan, along with NIIT Technologies Australian vice-president John Hunt, said it would not necessarily be a one-way street, as high-value Australian IT skills were likely to be sought in India.

Mr Hunt noted that more flexible arrangements for bringing Indian IT workers to Australia could ease some of the skills shortages that were pushing up salary and contractor costs, particularly in Canberra.

‘Anything that gets organisations to look outside of just a local area when solving IT or other problems has to be good,’ Mr Hunt said.

The executives’ comments were echoed by outgoing Indian high commissioner to Australia Prabhat Shukla who has reportedly pointed to tourist and business visa restrictions as an area in which co-operation between the countries could be improved.

A spokesman for Foreign Affairs Minister Alexander Downer said it was too early to talk about what information and communications technology concerns might be addressed in free trade discussions.

If the Indian technology sector had initiatives that it would like discussed, Indian negotiators should raise the subject with Australian government representatives, he said.

It would probably take Australia and India several years to finalise a free trade agreement.

According to published reports, a feasibility study taking up to 12 months to complete would be carried out first and the Indian and Australian governments would then to need to agree to talks.

One executive with ties to a prominent Indian technology services firm said the main thing Indian companies wanted was to be viewed in the same way as other international rivals. That was more important than a free trade agreement.

‘People no longer talk about US companies or European companies they just talk about brand names,’ the executive, who declined to be named, said.

‘I think that is what Indian companies would also want.’
The Australian IT, August 28, 2007