India is a big, colourful, vibrant country with a rich tapestry of cultural diversity and history. It is also a country of contradictions.
Temple elephants, ancient monuments and tribal customs co-exist with state-of-the-art industries in a country that generates atomic energy and boasts of being one the world’s top ten industrialised nations.
India is one of the world’s fastest growing economies and with this growth enormous exporting opportunities have emerged over the past few years.
There is growing support for continued economic reform in its political and business circles. The Australian/Indian bilateral trade relationship has, at its core, the vision to strengthen trade and investment links between our two countries.
Ian Bennett, Senior Manager, International Trade at Australian Business explains, “Promising exporting opportunities exist for Australian companies due to a number of factors. Over the past four years the Indian government has slashed custom duties dramatically. Peak rates of import duties have been reduced to 20 percent from 40 percent and further reductions in duties are promised by the government in the near future.
“Also, their Foreign Direct Investment policy is being continuously revamped by the Indian Government to encourage foreign investments, which are now allowed freely in almost all sectors including services. The Indian Government is offering attractive incentives for developing, maintaining and operating infrastructure facilities; and significant tax exemptions have also been established.”
India’s economy has a current growth outlook that overshadows most Asian markets. These facts present an extremely attractive scenario of an export market with broad-ranging opportunities for Australian exporters.
For the record
Australian exports to India totalled A$ 4.86 billion in 2003 – 2004. Our focus was on areas where we have had either a traditional or a growing comparative advantage, including: non-monetary gold – A$2671 million; coal – A$948 million; copper ores – A$316 million; wool – A$154 million and fresh vegetables – A$52 million.
Export opportunities of significance
Australian Business International Growth Specialist’s man on the ground in India, S P Joshi, advises that Australian businesses are in a good position to supply some of India’s fastest growing sectors.
He identifies sectors of significant potential as: Biotechnology & Pharmaceuticals; Chemicals; Communications; Creative Industries & Media; Education & Training; Environment; Financial Services; Fire, Police & Security; Healthcare and Medical; Metallurgical Process Plant; Mining; Ports & Logistics; and Power.
Potential for exporting Australian commodities also exist in the IT industry, which it is predicted to be worth $US 77 billion by 2008, and the manufacturing textile and retail industries.
Retail/franchising opportunities are experiencing revolutionary growth. Over 200 shopping malls are planned over the next 18 months, an initiative which is supported by the Central and State governments. This is the fastest growing mall development in the world.
Franchising, a popular form of retailing, has been growing at a rapid rate with chain stores multiplying rapidly, opening up opportunities for exporters of a wide range and variety of consumer products.
Now that restrictions for importing processed foods into India have been lifted, this too is an area with potential and already some Australian companies have made inroads in this area.
Bennett further comments: “Australian Business is currently working with increasing numbers of companies who are interested in the opportunities available in India. These companies come from a large range of industry sectors including engineering, mining equipment and services, health and medical products and retail franchises. There has also been some interest from companies who need assistance with joint venture operations based in India”.
There is little doubt that exciting exporting opportunities exist in India, but Bennett warns that with the many opportunities come certain challenges for would-be exporters.
For instance major changes to Australia’s export processes and export reporting systems were introduced in September 2004. These changes affect legislation and business processes. Also a new export reporting system, the Integrated Cargo System (ICS), has been recently introduced.
A professional helping hand
Understanding these changes and having the insights to be able to determine critical things such as whether your product(s) are exportable; whether it is the right time for your business to export; whether your company has sound marketing knowledge to be able to develop a product overseas; and the pitfalls of hooking up with the wrong distributors are just some of the issues that require considerable experience and expertise in export management and strategic planning.
Bennett strongly recommends that if a business is interested in exporting to an Indian market, it should seek professional advice from a business organisation like Australian Business.