Australia needs to secure a place in India’s growth story
by Leonie Muldoon, Senior Trade and Investment Commissioner, Austrade India
Economic reforms and anti-corruption programs are expected to improve the ease of doing business in India for international enterprises.
India is a market Australian businesses should not ignore. Already an Asian giant, India is now the world's fastest growing major economy with a rising middle class and growing urbanisation.
It also has the largest youth population in the world, with around half of its population under 25 years old. This 'positive demographic dividend' offers a beneficial tailwind for the economy through an expanded consumer market and labour force.
The country is also undergoing a digital transformation, with online channels such as Amazon, Flipkart and Snapdeal, presenting new ways to access Indian consumers.
Clearly this is a market that presents significant opportunities for Australian enterprises.
But despite its size and proximity to Australia, India is only Australia's 10th largest trading partner and our fifth largest export market for goods and services.
This is because India has a reputation for being a difficult place to do business, and a perceived preference for self- sufficiency, protectionist policies and price sensitivity.
But business conditions are slowly improving.
Prime Minister Narendra Modi's planned major economic tax reforms and anti-corruption programs are expected to ease the process of doing business in India for international enterprises and improve the overall business environment.
What are the opportunities?
India's rapid economic expansion, driven by its demographic profile and fast-growing consumer base, provides numerous opportunities for Australian businesses across a range of sectors. Opportunities include:
Education and skill development
Significant opportunities exist beyond attracting students to study within Australia. Under India's 'Skill India' economic development program there is the potential for collaboration with Indian educational institutions in professional and technical skill development.
The internationalisation of India's companies is driving investment growth as they seek access to resources, technologies, new markets and global supply chains. Investment in technology and innovation is increasing as Indian manufacturers and India's large ICT companies develop new solutions in data analytics, fintech, cyber security, advanced manufacturing and agritech. It presents Australian business with opportunities to collaborate.
Australia is already a key supplier of agricultural commodities such as pulses and wheat to India. Significant demographic changes and improving living standards are driving rapid growth in demand for global food brands, providing new export opportunities for suppliers of Australian gourmet food, fine wines, and lamb and goat meat. There are also opportunities to export Australian 'quick service brands' to India through franchising.
India's healthcare sector is expected to more than double to $364 billion by 2020, up from $143 billion in 2016. Its healthcare infrastructure is struggling to keep up with this growth in demand, and healthcare providers are actively looking for solutions and services. Opportunities exist for Australian businesses in intelligent health solutions, delivering healthcare in remote areas, data analytics, and training and skill development. There are also opportunities to partner with Indian pharmaceutical companies for R&D, new drug development, clinical trials, data analytics and bio-informatics.
Water, environment and sustainable energy
Water and environmental management is high on the Indian Government's agenda, evidenced by flagship projects such as the $4.5 billion Ganga Cleaning Project for the iconic Ganges River, the $650 million National Hydrology Project, and the National Aquifer Mapping and Management Project. Other opportunities exist in national and multilateral projects in hydrology and water basin management, urban water management, waste management, recycling and reuse of industrial wastewater and environmental remediation. International expertise is also required for energy storage technologies to support India's 'Smart Cities Mission' through renewable energy integration and off-grid renewables.
Mining equipment, technologies and services (METS)
Demand for Australian METS expertise continues to grow, with opportunities for Australian providers to tap into the global value chains of Indian mining and resources companies operating in international markets.
India's agricultural sector is shifting from subsistence to commercial models, creating opportunities for Australian agribusiness companies to export their services, technologies and products to assist in improving yield, storage and distribution. Within dairy, there are opportunities in training, fodder, silage and nutrition, animal husbandry services and genetics. India is also considering a sustainable fisheries management model to capitalise on its long coastline. There are opportunities to provide fisheries expertise and technologies and build high-value export capacity in India's fisheries sector.
Opportunities exist in rail, smart urban infrastructure and road safety management. In rail, this includes access to multinational manufacturing operations based in India, as well as supporting the development of other areas such as major heavy-haul rail corridors, major rail-port developments, and inland container terminal development.
India's 'Smart Cities Mission' has been allocated a budget of nearly $20 billion to redevelop existing cities for improved planning outcomes, creating opportunities for Australian urban planning, green building technologies and integrated transport systems. In road safety management, there are commercial opportunities for Australian road safety consultants to act in advisory roles to government.
India's quest for sporting success and focus on better community engagement in sport is creating opportunities for collaboration with Australian groups with expertise in sports training. Opportunities include sports consultancy for corporate and government groups, grassroots sports development, and sports education.