Building on Prime Minister Turnbull's announcement of a top-level inquiry into the economic potential of engaging with India, and free trade discussions between India and Australia in April, the Australian Government has now commissioned the India Economic Strategy to define a pathway for Australia to unlock opportunities offered by Indian economic growth through to 2035.
Australian businesses can benefit from shaping the strategy, and leveraging it, to take advantage of what is now the world's largest growing major economy.
What is the current economic relationship between Australia and India?
Unsurprisingly, Australian merchandise trade with India is significant - more than A$11 billion of Australian products were sold into India in 2016, the bulk of which were resources commodities. Coal and copper ores and concentrates accounted for nearly A$7 billion of those sales. Australian companies imported a comparatively small volume of products from India in 2016 - roughly $1 billion - with refined petroleum accounting for the bulk of this.
In services, Australian education related travel accounts for close to A$2.6 billion of exports to India.
However, in relative terms, Australia is a small trading partner with India - it is only the 26th export destination for Indian industry by value, and Australia is the 11th largest exporter to India.
What are the opportunities for Australian businesses?
Australian businesses in the following industries stand to benefit the most from closer economic ties between Australia and India:
- agriculture, food and beverage - particularly given significant Indian demand for milk production and technology;
- healthcare - Australia’s experience in delivering healthcare in remote areas and using data analytics to predict future demand can complement India’s need for remote health in rural communities, with senior health and living services also offering potential opportunities for Australian businesses; and
- mining and infrastructure - there continues to be strong opportunities for Australian mining and infrastructure equipment, technology and services to be exported to India, particularly given India's large and growing need for resources and infrastructure development.
What are the objectives of the India Economic Strategy?
The intended outcomes of the strategy include:
- a breakdown of existing and prospective sectors and regions with the greatest potential;
- an analysis of the domestic and international policy settings required for Australia to capitalise on the opportunities offered by India;
- a list of practical options for how Australian expertise can be utilised to support economic reform in India and how these would create opportunities for Australian businesses; and
- a consequential increase in the profile and understanding of the benefits of India as an economic partner in the Australian community.
How will the India Economic Strategy be developed?
Mr Peter Varghese AO, Chancellor of the University of Queensland and former High Commissioner to India, will lead the development and delivery of the strategy, with public submissions closing on 13 October 2017.
What should Australian businesses do now?
Australian businesses operating, or looking to operate, in India should:
- consider making submissions that may shape the strategy;
- review the commentary contained in public submissions made to the Australian Government to understand the potential outcomes of the strategy; and
- analyse the potential trade opportunities once the strategy is finalised.