India’s aspiring market, young population and increasing digital demand have turned India into an attractive market for companies worldwide.
The Australia India Business Exchange, which just ended, was dominated by trade, tourism, and the “taste of Australia” (AIB-X). The 120-member Australian business team, led by Trade, Investment, and Tourism Minister Simon Birmingham, visited India last week on one of the largest trade trips to India in the last five years to investigate and build on Indian potential.
India’s aspirational market, young demography, and expanding demand fuelled by digitalization have made it a desirable market for enterprises worldwide.
Australia is also aware that by engaging in a reliable partnership, it should recognize and respond to India’s priorities to create a new India. This can also protect its economy from its excessive dependence on China and diversify into other markets. In 2019, Australia-India’s two-lane trade was $30 trillion, but Australia-China two-way trade is over a total of $200 billion.
In 2018 the Australia Indian Economic Strategy 2035 (IES 2035) was launched to address the gaps and possibilities in Australia-India relations. India has set the target of becoming one of the top three export markets in Australia, making India the third-largest destination for external investment in Asia and bringing India into the core circle of Australia’s strategic partnerships.
It is divided into 10 industries, with ten countries focusing on Australian companies. The Indian Government’s reciprocal report, Australia Economic Strategy (AES), will be published later this year, and it is interesting to note that no such plan has yet been attempted to improve trading opportunities between India and another country.
The AIB-X was a clear attempt to translate the IES 2035 aims and objectives into concrete actions and outcomes.
In October 2019 AIB-X was launched with a series of events, meetings, trade conferences, trade shows, which culminated with a visiting large business delegation to India, by Austrade (Australian Government’s Agency for Trade, Investment, and Education). Four priority sectors – education, Agri- enterprise, resources, and tourism – were the focus of AIB-X along with projects related to food and drinks, energy, health, financial services, infrastructure, sports, and science & innovation.
Six major cities, Delhi, Mumbai, Chennai, Hyderabad, Bengaluru, and Kolkata, were visited by the delegation. The strategic choice of each city reflects its specific industry strengths and capabilities, as well as partnership and value creation potential.
The sessions focused on a wide variety of topics, including India’s current business lifeline, investment landscape, and Indian reforms.
Australia has tremendous competence in urban infrastructure design and development as a highly urbanized and liveable country. Australian cities consistently rank at the top of global liveability rankings.
In addition, the AIB-X companies had strength, capability, and competitive advantages in the following sectors: urban precinct and building planning, infrastructure sustainability and green building standards, policies, and rating systems, innovative water resource management, industrial and urban water recycling, and treatment systems, waste management, and intelligent transportation systems.
The Australian Institute of Mining and Metallurgy (The Aus IMM) and the Indian Institute of Technology – Indian School of Mines signed a three-year Memorandum of Understanding (MoU) to connect Australasia and India’s communities of resources experts.
There is a severe scarcity of skilled mining specialists in India. In India, the annual output per mining worker ranges from 150 to 2,650 tonnes, compared to an average of 12,000 tonnes in Australia.
Mining accounts for about 8% of Australia’s GDP; however, India’s mining industry accounts for only 1.4 percent of the country’s GDP.
Only 10% of mineral exploration has taken place in India to date due to a lack of investment in exploration (only 2% compared to Australia’s 13%) and insufficient knowledge regarding proved deposits (geophysical and geochemical data has only 2-4% coverage, compared to 90-100% coverage in Australia).
In addition, Australia boasts the lowest rate of mining accidents in the world. Australia’s exceptional safety record makes it a perfect partner for India when it comes to developing mine-safety management strategies.
In India’s future growth story, coal and iron ore will play a key role. Australia supplies 80% of India’s imports of metallurgical coal, which contributes to the Australia and India trade deficit of nearly US $10 billion. The trade deficit does not necessarily have to be viewed with suspicion, given the intermediate nature of Indian imports of Australian commodities, which are used as raw materials to produce steel and add value to Indian growth, and in particular the need to build huge infrastructure.
Australia can help India modernize mining, improve product quality and develop skilled human capital, both where the challenge for India and possible future synergies lies with Australia. Australia can also help India.
In Australia, the curriculum is relatively flexible, and it is continually evaluated and revised to meet the ever-changing needs of the business. The curricular knowledge and strengthened business relationships that Australia has can help guide such links in India.
