The recently releasedIndian Economic Strategy to 2035report outlines three core objectives for improving the AustraliaIndia economic relationship. These include making India one of Australias top three export markets by 2035, making India the third-largest Asian recipient of Australian foreign direct investment by the same year andbringing Indiainto the inner circle of Australias strategic partnerships and with people-to-people ties as close as any in Asia.Recommendations for achieving these objectives are driven largely by the choice of states and sectors, 10 each respectively, that the report considers top priority for Australia.

The report is candid in its observations and does not fail to consider the challenges that such a pursuit is likely to encounter. But it also emphasises that India is unique inthe growth trajectorythat it is likely to follow and in the scale of its domestic market (shaped by its youth bulge), which together point to the importance of Australia ramping up its economic engagement with India.

Whether the outcomes outlined in the report can be achieved will depend on the interest, sincerity and enthusiasm displayed by businesses, institutions and policy authorities on both sides of the Indian Ocean. Australias goal of making India one of its topmost export and investment markets cannot fructify unless India shares the same vision for its own national strategic interests. Unfortunately, there are gaps between Australian and Indian perceptions of the direction of the Indian economy.

Domestically, India continues to place faith in a strategy that would enable it to grow into a manufacturing powerhouse. It is rare to come across views from India that argue against Indias efforts to become a hub of labour-intensive manufacturing. The appeal of the view is comprehensive in India, particularly as a strategy of job generation for the millions of youth joining the work force. Make in India remains a signature campaign and policy initiative in this respect.

In contrast, theIndian Economic Strategyto 2035report views India principally as an economy that will flourish on the strength of services. Of the focus sectors identified in the report education, agribusiness, resources, tourism, energy,health, financial services, infrastructure, sport, science and innovation most are based around services. The report alludes to Make in India only from the perspective ofdefence manufacturing.

Identification of the reports priority sectors is driven jointly by Indias growing need for investment in those sectors and by the ability of Australian businesses and service providers to respond to this need. There is no denying the importance of the reports priority sectors from an Indian development perspective. But the disconnect between Indias vision for indigenous manufacturing and the pronounced services slant in the report might lead to less enthusiasm on the part of Indian actors.

Another potential issue is the reports geopolitical focus. The report alludes to a geopolitical convergence that necessitates Australia pursuing a proactive AustraliaIndia economic strategy. The two countries partnership in the Indo-Pacific is clearly the key element of the stated geopolitical convergence.

Australias foreign policy and world view is somewhat shaped by anintegration of perspectiveson foreign policy and international economic relations, particularly trade. Unfortunately, it is not so in India. Security and strategic discussions in India are miles away from economic conversations. Trade policy is hardly shaped in conjunction with foreign policy.

Further, the prominence ofthe Indo-Pacific conceptin India remains limited to the security community. Indian trade experts are yet to engage enthusiastically with the concept. It is far-fetched for Australia to expect India to react wholesomely to the report and to endorse a deep and lasting economic partnership with Australia on predominantly geopolitical foundations.

The eventual success of the reports economic strategy requires clarity by Australian agencies and businesses about Indian perceptions on Australia and the world clarity that is right now limited. In lieu of such expertise, Australian entities confusion over Indian policies and economic regulations will continue and the laudable objectives of the report will remain unfulfilled.

Amitendu Palit is Senior Research Fellow and Research Lead on trade and economic policy at the Institute of South Asian Studies, National University of Singapore.

India - Economic Strategy to 2035, DFAT, July 2018 (Peter Varguese)

India - Australia, DFAT Economic Strategy to 2035, Overview, July 2018

This article was published by the ANU EAST ASIA FORUM on the 29th of July 2018. It was written byAmitendu Palit.