The Business Allure of India for Australian Organisations

With over 1.2 billion people, a growing middle class and a young educated population, virtually every business in Australia can find a market in India for their products or services. For any business, India has five major attractions: its large population, high domestic consumption, strong economic growth and performance, and its status as a major global export market. Having spoken with Harish Rao, ex-President and National Vice Chairman of The Australia India Business Council (AIBC) here in Australia, let's take a closer look at why these attractions are luring so many businesses to India.

What makes India so attractive?

• People: With a population of around 1.2 billion people, India not only has a huge population but also a young one. India's population is projected to be the youngest in the world over the next 40 years and it is set to reap what economists now call the "demographic dividend".
• Consumption: According to McKinsey Global Institute, India has the highest domestic consumption in the Asia-Pacific region, accounting for 57% of the country's GDP. Domestic consumption drives the economy over and above anything else - meaning that your business with India is driven by their domestic demand rather than their exports. India's economy is less dependent on exports to the west than, for example, China, and Indians have a great appetite for any brand that is "western". India has become the world's fourth largest economy and second fastest growing economy largely due to its domestic demand.
• Growth: India's high growth rates, a perennial feature of the last 10 years, are expected to continue. GDP growth forecasts have been revised upwards following a stronger than expected recovery in the economy. India’s average GDP growth over the last five years has been 8.40% and last financial year 2010/11, it was 8.20%. It will soon overtake China to become the world's fastest growing economy.
• Sustainability: While major global financial events such as the GFC affect all markets, India has shown a low correlation with the US and other developed markets during the recovery. The Indian economy can perform strongly while much of the world struggles, so your business with India is not going to be too affected by the ups and downs of Europe and USA.
• Trade: India is now Australia's fastest growing export market and 4th largest export destination. It is also China's largest trading partner. India and China are the engines of global economic growth and key players in intra-Asian trade. By being in India, you can benefit from the combined economies of 2.5 billion people.

The political outlook

Since India's general elections in May 2009, which saw Manmohan Singh's United Progressive Alliance, increase its majority and providing stability at the government until the next election in 2014. Its growth forecasts have been revised upwards. India is a stable democracy with an administrative and legal structure we can understand.

This stability has brought renewed enthusiasm from international investors and a sense of optimism to India which has been reflected in its financial markets: the Bombay Stock Exchange 200 up 150% from 12,000 points in May 2009 to over 18,000 points in May 2011.

For the next five years we should see an increase in the pace of economic reform, more support for the rupee, a positive impact on India's credit rating, an increase in foreign investors and the government embark on the part-privatisation of public assets - all of which means your business should be there.

Taking advantage of the opportunities

According to the Australia India Business Council (AIBC), the organization at the cutting edge of the relationship between our two countries, you should go into India fully prepared with strong professional support and good contacts.

The AIBC can help you to develop your business in India. As the peak body approved by both countries to help create closer economic ties, the AIBC brings several trade missions from India to Australia in conjunction with Indian business organisations. In addition, it organizes trade missions to India - including the annual ‘India to the Max' mission in November led by former test cricketer, Max Walker. The AIBC also provides informal advice and assistance to those businesses evaluating the potential of the India market.

Accru is also well placed to help you succeed in India. Not only is Accru actively involved in the AIBC, our partners include leading professionals who have lived and worked in both India and Australia and can help your business operate successfully in both countries. The Accru network also extends to the Indian market and we can help you explore the opportunities of doing business in India and with India based companies.

Whether you are in professional services, food, agribusiness, engineering, FMCG, finance, electricals, IT, or suppliers to mining and manufacturing, there is plenty to suggest that India should be a top business priority.

For further information, please visit http://www.aibc.org.au/, email AIBC aibcvic@aibc.org.au or Accru info@accru.com , or contact your local Accru adviser.

An Accru Melbourne-based client's experience in India

Compunetix, based in the USA, is a world recognized supplier of teleconferencing platforms for telco's and conference service provider. Recognising the great potential of the fast growing Indian telecommunications market early this decade, its objective was to establish export opportunities for its products there.

Starting in 2002, Compunetix won significant contracts with large Indian Telco's like Bharti Airtel and Reliance Communications, and the company also set up joint venture there with global partners.

Don Kordick, Compunetix's Business Development Director, has been travelling to India since 2002. Here is what Don has to say:

"Visiting India is always exciting, if not a little exhausting, and at times overpowering. It is a country with a young population - ‘a high energy nation'.

The hard work and investment in getting into India is well worthwhile however, because India is one of the fastest growing global economies. There are enormous opportunities in both "hard" and "soft" infrastructure.

During the current Global Financial Crisis, the Indian economy has hardly missed a beat. During my past two visits this year - in April/May and now in September - in the midst of the GFC gloom, it is still a country that exudes great optimism. It is a case of "GFC - what GFC!!". India is well worth a look as an export market ....."

Article By :-

Rajesh Chawla
Accru Melbourne

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