Anil Wadhwa could be reviving Australia-India trade relations – Lowy Institute – but health, agri and sport could be the key

So good to read on the Lowy Institute daily publication “The Interpreter” that India is doing something unusual in response to Australia’s Peter Varghese report – it is responding with an Australian Economic Strategy (AES). By the way, well done Lowy Institute for powering this and other national discussions.

The AES is led by former Ambassador and Secretary (East) in the Ministry of External Affairs in India, Anil Wadhwa (pictured).

Let’s not get bogged down on the failed Free Trade Agreement with India – let’s not wait forever, and, by the way, trade is progressing without it. We would prefer to have one, but we can make mutual gains without it.

The key is that the AES from India means for the first time we will have a blueprint for economic engagement with another nation – this is the view of Mukund Narayanamurthy and Danielle Rajendram writing for Lowy Institute. Well done to you both!

They point out that unlike India’s engagement with the US, Canada, UK, and Japan, our relative size means that it is highly unlikely that Australia will have a similar scale of engagement with India. So, they say the crux of the relationship, certainly from a materiality perspective for both sides, will lie in mining, energy, infrastructure, education, and tourism.

This where I differ. They see healthcare, agribusiness, and sport having relevance but “may not be as material in absolute dollar terms” – my view is that these could be the areas that unlock the “India code” and get Australia into the big game with India.

Solar is getting really interesting as Australia to build world’s biggest solar farm – energy for Asian neighbours

Plans to build a giant solar power and battery facility in central Australia to supply electricity to Singapore will go ahead thanks to backing from tech and mining billionaires Mike Cannon-Brookes and Andrew ‘Twiggy’ Forrest.

The duo are co-leads on an investment round for Singapore-based Sun Cable‘s $22 billion proposal for a 10-gigawatt (GW) solar farm and 22GWh battery storage near Tennant Creek, in the Northern Territory.

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Solar is stepping up while the Australian Government continues to step back – locked into an ideological stance of opposing any alternative to coal and denying any impact on the climate. Sad to see this continue.

Singapore gets 95% of its electricity from imported LNG and Sun Cable hopes running a 4500km high voltage direct current cable from the 15,000 hectare site – around a quarter of the size of Singapore itself – via Darwin to the island state will supply up to one-fifth of the city’s power needs. It will be the world’s largest solar farm and also supply the NT capital.

The 10GW plant is nearly double the 5,500 megawatts Snowy Hydro scheme, which generates around 4500GWh anually. The Australia-Singapore Power Link (APSL) plant’s generation capacity is four times more than Australia’s largest coal-fired power station.

Central to the project is Sydney solar energy startup 5B, founded by Chris McGrath and Eden Tehan in 2013.

The business developed new technology for portable, prefabricated solar arrays, re-engineering the supply chain and simplifying how solar projects are delivered, using fewer materials, rapid deployment and streamlined logistics.

If Australia makes this happen, we can become the biggest energy supplier to the Asian region – Indonesia, Malaysia and more.

The project is expected to take six to seven years to complete.

Big Battery gets bigger too

News of Sun Cable’s progress comes in the same week that South Australia’s Hornsdale Power Reserve, dubbed the Tesla Big Battery, announced plans to expand the world’s largest battery by 50% by mid 2020.

The 50 MW/64.5 MWh expansion, supported by Tesla, will be the first grid-scale battery in Australia to provide inertia benefits to the National Electricity Market (NEM), which is critical to grid stability and the future integration of renewable energy.

Solar looks set to change history – for the better.

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India trade with USA given a boost while Australia is doing OK

This week USA-India trade grew to US$87 billion, as the demand from India for USA crude oil, LNG and coal took a big leap – energy imports from the USA have been around US$7 billion but this year will reach $10 billion.

Australia-India trade sits at around A$30 billion with Aussie exports of goods and services reaching $21 billion. While it could do better, compared to global data perhaps Australia is OK.

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India’s top imports continue to be Crude Petroleum, gold, diamonds coal briquettes.

India’s main exports include rice, mica, orthopaedic devices, spices, jewellery and garments.

Both USA and Australia attract thousands of Indian university students and education has become a key segment of two-way trade – perhaps the future for it is “more two way”?

The changing mindset of India

The mindset of India has split into two camps – one, the traditional, opposes spending and innovation – the other, entrepreneurial, chases innovation and adventure. It can be tough to navigate.

I was talking to an Indian colleague the other day about collaboration around Hydroponics – growing vegetables and some fruits in a liquid solution combined with various forms of protection such as glasshouses.

This is ideal for India – does not need good land, uses less water, produces the same quality 365 days per year and so on. Plus it grows crops that India’s growing urban populations demand – fresh capsicums, lettuce, broccoli, cucumber and strawberries.

But the early India response is an insight into the competing mindsets.

From one quarter of traditional banking, no thanks, it would cost money to install. Forget the benefits. Forget the competitive advantage. If it costs money, NO.

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From another side of the India mindset comes an enthusiastic response – an entrepreneurial and CSR view. This can make money plus help poor rural farmers and poor rural women. So, YES.

As an optimist, I am guessing the YES side will win on this one.

The Australian Government is probably facing this varying mindset as it seeks to heavily promote Australian coal exports to India.

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Yes, our coal can provide India with uninterrupted power, increasing efficiency and quality of life (and add to the already overwhelming pollution).

No, it would cost money and we put up with interrupted supply anyway. And, No, because we do not have the distribution network so alternatives such as solar are attractive for rural villages (even if interrupted, “it’s better than nothing”).

I am guessing that the NO side might win on the coal issue. But let’s wait and see.

India’s renewable energy reaches new highs

We often look at India from outside and just see pollution – but look closer and you will see major change is taking place.

Solar and wind energy are taking off – “An aggregate of 80.46 GW of renewable energy limit has been introduced in the country as on June 30, 2019 which includes 29.55 GW from Solar and 36.37 GW from Wind control,” according to Power and New and Renewable Energy Minister Mr R K Singh.

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The government has set a focus of 175 GW of clean energy capacity by 2022, including 100 GW solar and 60 GW of wind energy.

According to India’s submission to the United Nations Framework Convention on Climate Change on Intended Nationally Determined Contribution (INDC), a combined electric power limit of 40 per cent from non-fossil fuel-based energy resources is to be introduced by 2030.

The Ministry also told the House that a sum of 42 solar power parks with a total limit of around 23.40 GW have been approved by the government so far to encourage accomplishment of 100 GW target by March 2022.

Well done India – keep it going.

India Government to open state-owned firms to investors

The Modi Government plans to raise as much as US$ 47.4 billion in the next five years – by reducing the stakes in large state owned firms. It will include those in the oil, gas and power sectors.

I think this must be the country’s biggest privatisation move in more than two decades.

Finance Minister Ms Nirmala Sitharaman, in her maiden budget announced that there will be reduction in direct controlling of stakes in some state- run firms.

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In its previous term, the government sold stakes in a host of companies to raise US$ 40.92 billion which was three times that of the previous government.

The government has identified several state-owned firms, including explorer Oil and Natural Gas Corp, oil refiner Indian Oil Corp, gas transmitter GAIL (India) Ltd, power producers NHPC Ltd and NTPC, miners NMDC Ltd and Coal India, and Bharat Heavy Electricals Ltd.

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The next steps will be critically important for Adani in Australia

Now that the Adani mine in Queensland has passed what seems to be the final hurdle, while it will still be a focus of protests it is now important for Adani Group to create and build a long term image and relevance in Australia. Adani Group is widely misunderstood here.

Few if any Australians are aware of the diversified role of Adani in areas such as solar power (below).

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There have been mistakes. While “overstating” projects might be good communication in many countries, it is a disaster in Australia which is the home of the “tall poppy syndrome” (want to chop you down) and cynicism. In Australia it is best to under-estimate a project and then deliver beyond expectations.

This initial approach hurt the project and much of the bravado might well have been the Queensland Government – but dealing effectively with local politics is another important task for the group.

Here are some challenges, opportunities and ideas for the future brand of Adani in Australia:

  1. Build up the media, political and community profiles of your local Australia team
  2. Create some leadership profile opportunities for Mr Adani
  3. Clarifying the Adani approach of “vertical integration” which is not well understood in Australia
  4. Accept that protests and negative media will continue but strive to at least get your proper share of media space
  5. Carefully select the media you will deal with – and provide media tours of Adani in India – with full transparency
  6. Support and become involved in coordinated media relations programs with Indian High Commission in Canberra
  7. Have Mr Adani seen as a “promoter of Australia” by leading an annual group of Indian business leaders to visit and explore opportunities in Australia
  8. Bring some scientific R&D work to Australia – for example with RMIT University as a collaborator – this has the advantage of giving Adani relevance outside of Queensland
  9. Create an alliance with Indian foundations which are high profile here – for example ASHA Foundation educates slum dwellers and is well known for having a slum young person graduate from Melbourne University. Provide scholarships for more to come here
  10. Create or support a meeting of leading Australian and Indian resources and environmental scientists in some annual dialogue
  11. Have a regular presence in Canberra
  12. Develop some “owned media” content that is highly professional, well written and not propaganda
  13. Facilitate Australian business and political missions to India, leveraging close contacts