On this page
- Key opportunities for exporting to India
- Victorian Government support
- Advice on doing business in India
India is the world's second most populous nation, with an estimated population of more than 1.2 billion, and GDP exceeding US$1.8 trillion in 2013. The economy has become one of the world's best performers, with International Monetary Fund forecasts for growth of 5.4 per cent in 2014 and 6.4 per cent in 2015. India is also the world's third largest economy in terms of purchasing power parity (PPP), with a GDP of US$6.77 trillion based on PPP.
Trade with India
India is Australia's fourth largest export market. In FY2013-14, Australia's goods exports to India totalled A$8.35 billion and services exports were worth A$1.9 billion in 2013. Australia's two way trade with India, including goods and services, was valued at about A$15.2 billion (2013).
Major goods exports to India in 2014 included coal, copper ores, gold, vegetables and wool, while the most significant services export was education.
Australia and India are currently working on a Comprehensive Economic Cooperation Agreement, which would benefit the bilateral trade relationship.
In FY2013-14, total two way trade between Victoria and India was valued at A$1.3 billion. Victorian goods exports to India were worth A$489 million, with fruit and nuts, wool and vegetables the key export categories.
Victoria's services trade with India is driven by industries such as education and tourism, with India being ranked the second largest source market for Victoria's international education sector and a valuable source of international tourists.
Current and Emerging Opportunities
India's burgeoning role in global trade offers significant opportunities for Victorian companies and organisations. India's middle class is projected to reach nearly 300 million people by 2025, providing exciting opportunities for Victorian companies to deliver consumer goods and services to India.
The Indian Government has identified a range of areas for investment and growth that will drive export opportunities, including the following:
- Health and aged care
Food, water and energy resources for 1.6 billion people by 2030 – provides opportunities to supply agricultural products, water management capabilities and partnerships with Indian providers on local energy R&D capability.
Opportunities exist for carbon capture and storage, coal clean-up technologies, green technologies and associated industries as well as emergency management and recovery.
India's population is over 1.2 billion. It comprises one of the youngest populations, with an average age of 25 years, making education of its population a high priority. There are emerging opportunities for both public and private education campuses in India.
In 2014, Victoria's education exports to India were estimated at approximately A$500 million. India's high demand for education is expected to increase and Victoria is well placed to respond to this need.
India's rapid urbanisation is projected to continue. By 2030, India could have 68 cities of over one million people. This trend presents multiple opportunities for Victoria, which has experience and success with Public Private Partnerships and sustainable urban design.
Health and aged care
There is significant scope for future growth in health-related fields in India, including training and research partnerships. The urbanisation trend in India means that US$1 trillion in new infrastructure is required to meet this growth, which includes new hospitals and aged care facilities.
The Victorian Government aims to promote Victoria's health goods and services industry in some of the world's fastest-growing markets, including India, and provide assistance to Victorian businesses to take their world-leading health and aged care solutions to global markets.
Victorian Government Support
The Victorian Government is building the profile of Victorian exports in India through sustained engagement. It is elevating the scale of engagement through larger trade missions, targeted missions and industry promotion.
The Victorian Government has two Victorian Government Business Offices in India. These offices, located in Bangalore and Mumbai are able to provide in-market intelligence and support to Victorian companies wishing to export to India.
Doing Business in India
There are a number of factors to consider when exporting to India, including the following:
Your choice to export directly or sell into the Indian market through a distributor should be determined by the nature of your product. Regardless, it is essential to have a local point of contact to serve as a support in India.
It is important to decide between working with one distributor or with multiple distributors. If you choose to go with a single distributor, they should have a distribution network that covers most of the country.
Indian distributors expect continued support including marketing, promotion, follow-up visits and regular contact. Do not expect to sign up and forget, continuous engagement with your Indian distributor is essential.
Enforcing Intellectual Property protection laws in India can be a lengthy process, so it is essential to get some good advice on registering your patent and trademark in the country before entering the market.
India is a 'value conscious' market, so be prepared for the possibility of long negotiations on price. Factor this in while presenting the first quote, as the buyer may come back asking for reconsideration of the quote.
Regulatory and legal environment
Despite years of progressive reduction, India still imposes one of the highest rates of customs duties in the world. On an average, import duties cumulatively would add up to 40 per cent, including basic Customs Duty, Countervailing Duty and Education Tax.
Certain products like wine attract import duties of around 180 per cent and a host of other taxes. In addition to customs duties, exporters to India have to take into consideration local levies such as VAT and an Entry tax applicable in some cities.