Why Australia, India should increase business and trade exchange
Trade, Tourism and Taste of Australia, dominated the just concluded Australia India Business Exchange (AIB-X). One of the largest trade missions to India, in last five years, the 120 member - Australian business delegation visited India last week, to explore and expand on the Indian opportunities, led by Trade, Investment and Tourism Minister Simon Birmingham.
India's aspirational market, young demographics and rising demand driven by digitisation have made it an attractive market for businesses across the globe.
Australia is also conscious, that it should recognise and respond to India's priorities of creating New India, by engaging itself in a dependable partnership. This could also safeguard its own economy against its excessive reliance on China, and diversify to other markets. The two-way trade between Australia and India was $30 billion in 2019, but two-way trade between Australia and China sits at more than $200 billion.
To address the gaps and possibilities that exist in the Australia-India relationship, Australia's India Economic Strategy 2035 (IES 2035) was launched in 2018. The strategy has set a target for India to become one of Australia's top three export markets, to make India the third-largest destination in Asia for Australian outward investment, and to bring India into the inner circle of Australia's strategic partnerships.
The strategy is divided into 10 industry sectors and suggests 10 states where Australian businesses should be focusing. The reciprocal report from the Indian government, the Australia Economic Strategy (AES), will be released later this year; interestingly, this type of a blueprint to enhance trade opportunities between India and another country has never been attempted before.
The AIB-X was a clear attempt at turning the goals and objectives stated in IES 2035, into tangible actions and results.
AIB-X was launched in October 2019, by Austrade (Australian Government's trade, investment and education promotion agency) included a series of events, meetings, commercial conferences, trade shows, culminating with this large business delegation visiting India. The focus for AIB-X was on four priority sectors - education, agribusiness, resources and tourism - along with initiatives in food and beverages, energy, health, financial services, infrastructure, sport, and science & innovation.
The delegation travelled across six major cities, Delhi, Mumbai, Chennai, Hyderabad, Bengaluru and Kolkata. The strategic choice of respective cities reflects their specific industry strengths and capabilities, and their potential for partnership and value creation.
The sessions focused across a variety of themes starting with, India's current ease of doing business scenario, investment landscape and the reforms introduced in India.
The infrastructure and built environment delegates of AIB-X discussed the need for skills and technologies to improve urban design, create smart cities with engineering, design and consultancy company Ramboll India and Australian cost management advisory services firm WT Partnership (WTP).
WTP expanded in India in 2015 and has almost 100 staff and strong associations with India's leading businesses.
The delegation also had meetings with the GMR, Godrej and Mahindra group, and real estate developers like AFCONS, Eldeco Group, Thapar India and Tata Projects.
As a highly urbanised and liveable country, Australia has significant expertise in urban infrastructure design and development. Australian cities regularly feature at the top of world liveability indexes.
Australian companies participating in the AIB-X also 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, intelligent transport systems and transport orientated design, urban road design and road safety systems.
Within the resources sector, the Australasian Institute of Mining and Metallurgy (The AusIMM) signed a three-year Memorandum of Understanding (MoU) with Indian Institute of Technology - Indian School of Mines, to connect Australasia and India's communities of resources experts.
India has a severe shortage of skilled mining professionals. The output per mining worker in India varies between 150 to 2,650 tonnes per annum, compared to an average of 12,000 tonnes per worker in Australia. Mining contributes around 8 per cent of Australia's GDP, however, India's mining industry contributes only 1.4 per cent of GDP.
A lack of investment in exploration (a meagre 2 per cent in comparison to Australia's 13 per cent) and inadequate information about proven reserves (geophysical and geochemical data has only 2-4 per cent coverage, compared to 90-100 per cent coverage in Australia), has led to only 10 per cent of mineral exploration, to date in India.
Australia also has the lowest mining accident rates in the world. Such impeccable safety record makes Australia the ideal partner for India for the development of mine-safety management plans.
Coal and iron ore will play a pivotal role in India's future growth story. Australia provides 80 per cent of India's metallurgical coal imports, which contributes to a trade deficit of almost $10 billion between Australia and India.
The trade deficit need not necessarily be viewed with suspicion, as India's imports of Australian commodities are of an intermediate nature, these raw materials are used to produce steel and in turn, add value to India's growth and in particular the need to develop huge infrastructure.
Australia can help India to modernise mining, improve the quality of products and develop trained human capital, areas where both India's challenge and possible future synergies lie with Australia.
The number of international students is generally a reliable indicator of the quality and robustness of a higher education system. As of 2018-19, only 47,427 foreign students were enrolled in the Indian higher education system, which is not enough for a country with more than 950 universities.
AIB-X focused on education partnerships, leveraging Australia's strength in the higher education sector. International education is Australia's third-largest export industry. There are 40 top universities in Australia, and six of them feature in the prestigious Top 100.
India's growth is incumbent upon the capability of its education and training institutions to equip young Indians with knowledge and skills relevant to an evolving job market which needs quality, excellence, innovation and constant upgradation.
LinkedIn India shared its insights with AIB-X delegates, on India's growing job market, workforce landscape and skills required for the future.
The curriculum in Australia is very agile and constantly reviewed and updated to match ever-changing industry requirements. Australia's curriculum experience and enhanced industry partnerships can play a key role in guiding such linkages in India.
The AIB-X education stream also visited CIPLA Global and BASF to explore possible research and development collaborations with Australian Universities. BASF's industry-leading position in sustainable agriculture is based on its active R&D portfolio, and CIPLA's increasing focus is ongoing beyond the pharma space, and emerge as an all-round healthcare company covering a range of products.
The Australia-India Strategic Research Fund (AISRF) is Australia's largest fund dedicated to bilateral science collaboration. Since its inception in 2006, the Australian government has committed more than $80 million which, together with the Indian Government, has helped support over 300 collaborative research projects, fellowships and workshops in a variety of areas from agricultural research, health-tech, water management, energy efficiency, renewables to nanotechnology.
The appetite for Australian food and wine products in the Indian market continues to expand, particularly with the rise of e-commerce. The presence of major Australian wine producers like Taylor's wines, in the AIB-X delegation, showed the growing interest of Australian winemakers to explore the Indian market, which is witnessing a rapidly changing demography with increasing urbanisation.
There are over 40 Australian wine companies with a presence in India including established brands such as Penfolds, Lindeman's, Westend Estate, d'Arenberg, Jacob's Creek, De Bortoli, McWilliam's and Wines by Geoff Hardy. The largest exporters of wine to India are Australia, Spain, France and Italy, which combinedly supply almost 75% of the country's wine imports.
The trade minister Simon Birmingham also launched the Taste of Australia retail promotion to lift the profile of Australian food products and highlight its quality, taste and safety to Indian consumers, who have shown their enormous enthusiasm for cooking shows like MasterChef Australia.
The cooking demonstrations were led by Australian Masterchef Sebastian Simon, featuring Australian ingredients and produce available in India.
Australia's latest partnership with e-commerce platform Amazon India, to sell multivitamin brand Swisse, its health and beauty products, Vegemite and several other Australian products will give Australian businesses easier access to the 450 million internet users in India.
The size of the imported food category has more than tripled in India over the last 10 years from $1.7 billion in 2009 to $5.3 billion in 2018. This is despite a strong domestic food processing sector and high import tariffs of 30% to 50%.
Australian MasterChef gets its highest viewership from India, and that has actually changed the way Indians view Australian food.
In the tourism sector, the trade minister announced a funding boost of Australian dollar (AUD) 1 million (about Rs 4.7 crore), beyond the AUD 5 million announced last year, to Tourism Australia to further ramp up its marketing efforts in a bid to attract more Indian tourists in the upcoming ICC T20 Men's World Cup.
In an event attended by Aussie cricketing legend Glenn McGrath and Indian cricket commentator and Friend of Australia Harsha Bhogle, Minister Birmingham reiterated that Tourism Australia's current advertising campaign 'Experience the game and beyond' has been encouraging Indian cricket fans to book a ticket, watch a few games, and also get out into the regions to explore the incredible tourism experiences on offer.
India has become Australia's fastest-growing tourist market with visitor numbers increasing by 53 per cent. More direct air services are crucial to the development of this market. With 700,000 Indian diaspora population currently, Indian-born Australians are expected to outnumber Chinese-born Australians by 2031, reaching 1.4 million.
AIB-X has reflected the Australian position and perception towards India, and how proactively it wishes to engage with India. A new path is set, it is important to sustain the momentum with commitment, consistency and collaboration. The word "engagement'' is crucial which should become a permanent national project for both countries.
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Originally published: https://www.businesstoday.in