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India country brief


India is the world's largest democracy, one of the fastest growing major economies, a technology powerhouse and a major power. India was Australia's seventh-largest trading partner and sixth-largest export market in 2020, driven by coal and international education. People-to-people links underpin the relationship, with the size of the Indian diaspora growing along with its contributions to Australia's economy and multicultural landscape.

On 4 June 2020, Prime Minister Scott Morrison and the Honourable Prime Minister of India, Narendra Modi, participated in the first Australia-India Virtual Leaders' Summit. At this meeting, the two Prime Ministers elevated the bilateral Strategic Partnership concluded in 2009 to a Comprehensive Strategic Partnership (CSP). The CSP is based on mutual understanding, trust, common interests and the shared values of democracy and rule of law. Through the CSP, both countries committed to work together across a range of areas.

The CSP marks a step forward in the two countries' ambitious agenda to expand our trade and economic relationship, as outlined in the India Economic Strategy (IES), which was released in July 2018 and endorsed by the Australian Government in November 2018. The IES was updated on 22 March 2022, following the second Australia-India Virtual Leaders' Summit on 21 March, where the Prime Minister outlined a $282 million package of new initiatives to bolster the CSP.

Political overview

Indian government

The Republic of India is a federal democracy comprising 28 states and eight union territories. The Head of State is the President and the Head of Government is the Prime Minister.

The Indian Parliament is bicameral, comprising the 545-member Lok Sabha ('people's' or lower house) and the 245-member Rajya Sabha ('states' or upper house). Lok Sabha members are elected by universal adult suffrage every five years using the 'first past the post' voting system. The Rajya Sabha is not subject to dissolution; one third of its members retire every second year. One third of Rajya Sabha members are elected every two years by the legislative assemblies of the Indian states.

The 2019 Indian national election for the Lok Sabha saw the Bharatiya Janata Party (BJP) win a second consecutive term with 303 out of 543 seats.

Economic overview

Over the next 20 years, a growing India will need many of Australia's goods and services, including agriculture, education and skills training, and healthcare.

Prior to COVID-19, India's economy was the world's third largest in Purchasing Power Parity (PPP) terms and was forecast to become the third largest in the world by 2030 in market exchange rate terms. India recorded its first economic contraction in 40 years in 2020. The deep disruptions caused by COVID-19, accompanied by the introduction of economic support measures and structural reforms, mean India's business conditions have undergone significant changes following the onset of COVID-19.

Over the longer-term, India's strong fundamentals – its youthful demographics, burgeoning consumer class, steady urbanisation, unmet infrastructure investment demand, and digitalisation and formalisation of the economy – are expected to drive sustained growth.

The Modi government is prosecuting an ambitious economic reform agenda, which includes bringing more firms into the formal economy, divesting the government's stake in public sector companies, increasing GST compliance, and reducing bad debts within the financial sector. Further reforms include steps to liberalise internal agricultural markets and ease labour regulations, as well as reforms to education policy. These measures build on a series of economic reforms introduced during the Modi government's first term in office, such as the introduction of a GST, direct benefit transfers and a new insolvency and bankruptcy regime.

India's post-independence economy (1947-1991) was characterised by a planned approach to development, with extensive regulation and protectionism. From 1991, India underwent a process of economic liberalisation that helped it move towards a market-based economy. For a decade from the late 1990s, the Indian economy had an annual average growth rate above seven per cent. Since 2000, India's GDP grew seven-fold to reach USD3 trillion. Tens of millions of Indians have been lifted out of poverty since the 1990s. However, economic growth in the country remains uneven.

The Australian Government provides advice on doing business in India through the Austrade website. The bi-monthly Business Envoy publication offers perspectives and insights on the economic and market impacts of geopolitical events and trends from Australia's global diplomatic network.

See the latest economic facts on our economic relationship with India [PDF].

Diplomatic relations

Australia and India established diplomatic relations in the pre-Independence period, when the Consulate General of India was first opened as a Trade Office in Sydney in 1941. In March 1944, Lieutenant-General Iven Mackay was appointed Australia's first High Commissioner to India. India's first High Commissioner to Australia arrived in Canberra in 1945.

Bilateral economic relationship

Two-way goods and services trade with India was $24.4 billion in 2020. Australia's stock of investment in India was $15.4 billion in 2020. The stock of two-way foreign direct investment was valued at $1.4 billion in 2020.

The elevation of the Australia-India relationship to a Comprehensive Strategic Partnership (CSP) includes a commitment to encourage expanded trade and investment flows to the benefit of both economies. Australia and India are re-engaging on a bilateral Comprehensive Economic Cooperation Agreement (CECA), and progressing cooperation in a range of areas including critical minerals, health, critical technology, science and agriculture.

Australia's economic engagement with India is underpinned by the India Economic Strategy (IES), which was authored by Mr Peter Varghese, former Secretary of the Department of Foreign Affairs and Trade (2012-2016) and High Commissioner to India (2009-2012). The IES was presented as an independent report to the Australian Government in July 2018. In November 2018, the Australian Government released its response to the IES setting out an initial implementation plan. India released its own industry-led counterpart report, the Australia Economic Strategy, in 2020.

Education is Australia's largest service export to India, valued at $6 billion and accounting for around 88 per cent of the total in 2020. At the end of 2020, Indian students in Australia numbered 115,137.

To support more Australian and Indian business partnerships, the Australian Government has launched the Australia India Business Exchange (AIBX) program. AIBX provides a range of services to support Australian businesses to enter and establish in India, from industry specific insights to guidance on doing business with India and entering India's online retail market. Further information can be found on the Austrade website.

Bilateral architecture and high-level visits

The Prime Ministers of Australia and India interact regularly at major international meetings such as the G20 and the East Asia Summit, and often meet bilaterally in the margins of such events. In March 2022 at the second Australia-India Virtual Leaders’ Summit, the Prime Ministers agreed that leader-level talks will be held annually; a commitment that India has with only two other countries.

Australian and Indian Foreign Ministers meet regularly for the Foreign Ministers' Framework Dialogue, alternately held in Australia and India. The Dialogue is an important mechanism for advancing the ambitious bilateral agenda. Australian and Indian Defence Ministers also meet regularly.

Australia–India Joint Ministerial Commission meetings provide a forum for Trade Ministers to identify opportunities and address challenges in the economic relationship. This is complemented by ministerial engagement in sector-focused working groups, including on energy and education.

As part of the CSP, Australian and Indian Foreign and Defence Ministers decided to meet to discuss strategic issues in a '2+2' format at least every two years.

Our bilateral architecture is complemented by regional groupings including in the Quad and Australia-India-Indonesia trilateral forums.

People-to-people links

Australia and India are building strong and lasting ties through our people-to-people links.

The Indian diaspora (comprising both Australians of Indian origin and Indians resident in Australia) is now Australia's fastest growing large diaspora. The number of people born in India was 721,000 in 2020, representing Australia's second largest overseas-born group, or around one in 35 people.

India remains Australia's largest source of skilled migrants and the second largest source of international students. Hinduism is our fastest growing religion and Punjabi is our fastest growing language.

The Australia-India Council (AIC) is also advancing Australia's foreign and trade policy interests with India. Board members are appointed by the Australian Government to strengthen the connections between Australia and India, and provide advice to government on the opportunities and vulnerabilities in the relationship. The AIC Board recommends projects to DFAT that will create new sustainable collaborations and break down perceived barriers to engagement between our two countries.

In March 2022, the Australian Government announced the establishment of a new Centre for Australia-India Relations to build on the work of the AIC, help foster new ties and support our expanding exchange and cooperation with India, including by engaging Australia’s rich Indian diaspora community.

Find the Australia-India Council on Facebook.

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