India’s government had presented its new Australia Economic Strategy in December 2020.
This forum highlighted Australian METS as a valuable partner in India’s continuing mining sector with liberalization.
With over 1,500 mines operating in India, new advancements are opening up new prospects for Australian businesses:
New mine operating models are being developed to encourage private-sector participation.
State-owned coal mines are being auctioned off.
New regulations aimed at boosting foreign investment.
This report provides an outline of some of the most important opportunities and constraints that prospective METS suppliers in India face.
- In India’s mining industry, private enterprise is gaining ground.
With its rapidly increasing demand for energy and resources, India presents a tremendous opportunity for Australian METS. The Indian government aims to bring in foreign expertise and cash to assist develop the country’s vast natural resource endowments. India’s goal is to increase mineral and resource self-sufficiency, particularly in coal.
Massive modernization work is currently underway. The mining industry, which is mostly held by the government, is gradually opening up to private enterprise, notably through my auctions. To encourage private enterprises to enter India’s mining industry, the government is removing several restrictions and amending rules.
Increased collaboration with METS suppliers is now being driven by private activities. There is a broad belief that METS companies, including those based in other countries, can assist in improving efficiency, safety, and profitability.
- Significant breakthroughs open up new possibilities.
The paths are endless through the guaranteed sources of possibilities of the new economic forum which is chained to be in this endless regard of being the most Increased private sector participation will result in a fundamental shift in India’s METS procurement process.
Tenders are the only way for government agencies to purchase goods and services.
Procurement is slowed as a result of this. It has also resulted in procurement being “bureaucratic” in the mining industry. India’s private sector, on the other hand, is free to purchase METS services as it sees fit.
METS procurement is becoming more streamlined as private enterprise takes a larger portion of mining operations. As a result of the rising realization of the value that Australian METS can provide, METS procurement is becoming more widespread and faster.
- Possibilities for education and training
Executive and staff training are welcome in the mining business. As private owners strive to meet internationally acknowledged safety standards, opportunities are projected to grow fast. This development presents a significant opportunity for Australian METS.
Local criteria must be met during in-country training. Delivering courses in the regional language and assuring a minimum number of participants from a certain local community are all part of this.
Requests for Proposals (RFP) will be issued by state-owned mining companies, to which training providers can respond. A private mining firm may be amenable to direct approaches or may post job openings on the internet.
AITA recommends that to offer unified solutions to these requests, Australian training providers should ally with the Indian training providers. A report on Indian transnational education opportunities has been prepared by Austrade. This article discusses different market-entry tactics that Australian training providers can use to get into the Indian market.
AITA also makes it easier for Australian training providers to interact with Indian partners and organizations.
- New Product Approvals
Any new products to be used in mines must be issued to a mining mine developer and operator with a safety certificate by the Directorate General, Mining Safety (DGMS).
Depending on equipment value and complexity, it can take six months to four years.
- Working with public companies
The majority of India’s leading mining companies remain state-owned companies. This applies to coal mining companies in particular. These governments have fixed rules of purchase and the number of necessary approvals increases with the value of the product or service purchased. Procurement is mainly carried out via tenders requiring technical and financial offers. Committees with expertise in technical, finance, and R&D (R&D) generally meet procurement specifications and progress bi-monthly or quarterly. It often takes time to approve new projects and new equipment or services. This increases the risk that the public sector will be sold.
- Work with private sector firms
Working with private companies is relatively easy. However, new equipment approvals still require DGMS certification. Suppliers have to factor in import duties because India is a highly-priced market. This makes it difficult to sell certain value-added products.
An effective means to mitigate the risk, understand market processes, and negotiate delivery times and prices is a joint venture with a reliable private distributor. A distributor can also provide continuous support for market development and post-sales services.
- Scoring at the Business Attire
Understanding the differences between business cultures in India will help Australian METS organizations manage risk.
• Delays. It is usual to expect a delay during negotiations with state-owned or state- owned organizations. This is because the final agreement calls for several stakeholders to be approved. Also, applications for price or contract terms changes are usually received by successful bidders after reaching a final agreement
• In the ‘informal’ sector, almost 81% of India’s workforce works. They are untaxed and without proper contracts, many workers are employed at the mine. This makes the mine-site work complex and operational risk management more complicated.
• There are 22 official languages and countless dialects in India. Culture varies greatly from part of India to part of the world. To bridge communication gaps, speed up the sales process, and provide market support to Indian customers, local representation is essential.
• Discussion settlement. The Indian Judicial System is still facing a reputation of 40 million cases. Arbitration is a preferred mechanism for dispute resolution, but no supervisory arbitration agency is established. There have been alternatives to international arbitration, such as the Singapore International Arbitration Centre, which is based in Mumbai.