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Bollyline won’t derail the Australia–India trade relationship

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Will Bollyline harm Australia-India trade relations? Not likely. ‘Make-up’ ex(port) can be the best.

In the lead-up to 26 January, I would normally be writing about Australia Day. But this year, something extra needs to be done.

 

As it happens, 26 January is also India’s Republic Day. So this year, in light of the recent incidents in the Sydney test, I wanted to devote my usual Australia Day piece to the Australia-India relationship.

 

But first, let’s talk about the cricket.

 

It has been a big summer in Australia with the headlines again dominated by cricket. However, this time it’s been for all the wrong reasons.

 

The Australia-India test cricket series has been besieged by ill feeling between the two teams in the Sydney test with accusations of cheating, racism, and poor sportsmanship. In fact, the Indian captain, Anil Kumble, was so incensed after Sydney that he said “only one side was playing in the spirit of the game”, echoing the words of Australian cricketer Bill Woodfull about England’s tactics during the famous “Bodyline” series in 1932-33.

 

In fact, the similarity between the words of Kumble and Woodfull caused one very clever sub-editor somewhere to call the Sydney test “Bollyline”.

 

Of course, the Bollyline incident is big news in cricket-mad India. Having been to a test in Mumbai (and seen the legendary Sachin Tendulkar bat, no less) I can think of no more passionate and knowledgeable cricket fans than those in India.

 

And given the importance of cricket as a way of building Australia’s “brand” in the emerging Indian economy, there has been some nervousness that Bollyline could adversely affect Australia economically (particularly those Australian cricketers who receive endorsements in the thriving Indian retail market).

 

Will Bollyline adversely affect Australia exporters? No, I don’t think so, for a number of reasons.

 

First, the teams and the respective cricket boards of India and Australia have worked it out diplomatically. Like in all relationships, sporting, business or even personal, a bit of a “blue” (argument) now and again, can make both parties realise how important the relationship is, and make them work a bit harder.

 

Many Australians based in India have also been working hard in the Indian media to keep the relationship strong in light of the recent incidents on the cricket field.

 

Second, India’s economic rise is creating an insatiable demand for Australian exports – especially in resources and infrastructure. India’s economic rise means it will soon join China in increasing market share of world output, and in turn Australian exports.

 

Progress has already been made over this decade, with Australian exports growing at an annual average rate of growth of almost 29% (compared to China at almost 23%). In short, they need us to fuel their growth and build their infrastructure, and we need them.

 

In fact, the new Australian Trade Minister Simon Crean is visiting India this week – only his second overseas mission with the Prime Minister Kevin Rudd seeing New Delhi as a top priority for Australia.

 

Third, there are growing sectors for Australia and India with education, tourism, financial services, retail, health care and franchises all playing an important role. Currently, 1994 Australian businesses export to India, each bringing in over $5 million in export revenue (which is putting it up in the big league with Japan, Korea and China as far as revenue per exporter goes).

 

But can a rupture in cricket lead to better days? There is one historical precedent, a little bit closer to home than New Delhi.

 

In 1981, Trevor Chappell bowled an underarm delivery to Kiwi tail-ender Brian McKechnie at the insistence of his brother Greg, who was the Australian captain. This unusual and back then lawful tactic was hastily used by Greg Chappell to avoid having the burly Kiwi hitting a six to win the game.

 

McKechnie was outraged by the lack of sportsmanship and he threw his bat away in disgust. But that was nothing compared to the outrage that the underarm ball caused in political circles across the Tasman with the then New Zealand prime minister, the late Robert “Piggy” Muldoon saying that it was “the most disgusting incident in the history of cricket” and that “it was fitting that the Australians were dressed in yellow” (actually, it was wattle-gold, but you get the drift).

 

In some ways, Muldoon spoke for the nation in feeling like the Kiwis weren’t being treated respectfully by their trans-Tasman cousins.

 

However, after this tense period in 1981, Australia and New Zealand began negotiations for a free trade agreement – the New Zealand Australian Free Trade Agreement, or the original “NAFTA”, which later became known as Closer Economic Relations Trade Agreement (CERTA). ANZCERTA was signed in 1983, and since then Australia-New Zealand economic ties have never been better.

 

Let’s hope we get a similar trade effect between Australia and India after the lows of Bollyline in the Sydney test.

 

 

* Tim Harcourt is chief economist at Austrade and author of Beyond Our Shores

www.austrade.gov.au/economistscorner. Thanks to Purnima Ganapathy and Matt Wade for their assistance with this article.

 

 

 

India Fast Facts

 

Population

1128.5 million

GDP ($US) – market exchange rates

933 billion

GDP ($US) – purchasing power parity

4282 billion

GDP per capita ($US)

826.9

GDP per capita ($US) – purchasing power parity

3320.5

Australian exports
($A) to:

11,847 million

Australian exporters (number) to:

1994

Source: ANZ, University of Groningen, ABS, Austrade, 2007 estimates except Australian exports (2006/7), Australian exporters (2006/07)

 

 

For more Gone Global blogs, click here.

 

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