Conditions are ripe for Australian businesses to benefit from India’s increased demand for agricultural commodities.
BDO Executive Director of International Business Cameron MacMillan said Australia’s agricultural industry, including those supplying canola oil, oats, and malting barley, should look to the subcontinent as a key export market as new opportunities continued to emerge.
“The election of new Indian Prime Minister Narendra Modi in 2014, combined with positive economic growth, has contributed to enhancing international business confidence,” Mr MacMillan said.
“Prime Minister Modi is known for his pro-business sentiment and willingness to further open the gates to international trade.
“Australian agribusiness is, and is likely to continue being, one of the key beneficiaries of this increased momentum.”
Mr MacMillan said while India’s appetite for dairy, cereals, and fruit and vegetables was well-known, there was also demand for grain storage and processed food.
“For example, India has attracted recent international attention with its plan to build another series of grain storage silos, the second in a number of projects to build a total of 2 million tons of suitable grain storage” Mr MacMillan said.
“India also reports annual losses of around 10 per cent of its cereal crop production due to a lack of modern storage and handling infrastructure.
“When it comes to trade, China often rates highest on the radar — as do free trade partners like Korea and Japan — however India should also be front of mind for exporters.”
With a free trade agreement with India on the table, Mr MacMillan said it would be beneficial to begin forming relationships now.
“Those thinking of going down that path need to be prepared, as India can still require some complex navigation and in some cases the rule of law is still very grey,” he said.
“I can’t emphasise enough the importance of getting to know a local partner or investigating the types of assistance that may be available to you from Australia.
“There are also a number of business negotiation practices and cultural considerations to take on board before engaging with the Indian market.”
First published in Leading Agriculture Issue 8