Australia is confident that the free trade deal it is going to sign with India will be good enough to turn the latter a partner as important as China in the coming years.
Australia's special trade envoy Andrew Robb said after his sixth visit to India that the deal may be completed in less than two months.
The size of trade between Australia and India has been dwindling of late and it has fallen to a 5-year low of US$13.1bn in 2014, which is one tenth of Australia-China trade but Robb says the time ahead belongs to India.
"India is on its way," Robb said. "In the decades ahead India will be as important to Australia in trade terms as China is today."
Australia has reached trade and economic deals with China, Japan and South Korea in the region and India is the next major one.
For Indian Prime Minister Narendra Modi, the deal would signal a renewed effort to reduce trade barriers with major commercial partners as he seeks to lure manufacturers to produce in India, which recently eclipsed a slowing China as the world's fastest-growing economy.
Since taking office, Modi has attracted more than US$400bn (S$537.6bn) of investment pledges as part of his "Make in India" campaign.
Indian experts say that the country has started thinking in favour of FTAs (Free Trade Agreement). "Apprehension on FTAs is not sustainable, and bilateral engagement is the way forward," a New Delhi based trade economist Ram Upendra Das was quoted in a Bloomberg article.
But some contentious issues threaten to hold up the deal according to the Bloomberg article.
Australia wants the agreement to include all Indian services except those specifically mentioned in the text, rather than mentioning explicitly all the subsectors that are covered. Specific products under discussion include wine, automobiles and dairy.
With 600 million Indians living on US$2 a day or less, Robb said he understood that India was not yet ready to lower tariffs on most agricultural and manufactured goods, and emphasised that Australia had to remain sensitive to that if it wanted India to further open its doors.
Robb, 64, stepped down as Trade Minister in February but was appointed Special Trade Envoy by Prime Minister Malcolm Turnbull with the specific task of concluding a trade agreement with India. Australia has reached trade and economic deals with China, Japan, South Korea and other countries in recent years.
While Australia could see a market for niche products such as its cheese, yoghurt, ice cream and wine, most of the opportunity will come for Australian services firms, Robb said.
"What Prime Minister Modi keeps telling me is that he wants access to all that Australian expertise as India moves along a path of rapid expansion," said Robb. "Those are going to be big opportunities for us."