After decades of stop-start economic progress, it’s now India’s time in the sun — and Australian business should take advantage of the opportunities this presents.
India’s big numbers tell a story of opportunity. With more than 1.4 billion people, it has overtaken China as the world’s most populous nation. Growth in gross domestic product has averaged between six and seven per cent since the start of the century.
About 432 million Indians constitute the nation’s rapidly growing middle class, and this figure is expected to rise to 715 million — 47 per cent of projected population — by 2030–31.
The average age is just under 29, significantly lower than Australia and China. These numbers have the federal government and Australian companies looking to the subcontinent as a significant trading partner and source of growth in the decades to come.
India has had several false starts over the past three decades, where hopes of becoming a global economic powerhouse have not materialised. Recent Bloomberg data also shows its economy is expanding at its slowest pace in four years.
But Mark Bennett, ANZ head of agribusiness in Australia, says there is still reason to be optimistic. “People who’ve been around and trading into this market longer than me tend to think this time is different,” he says. “There’s a lasting opportunity with our trade into India, certainly from an agri point of view, particularly as we see a less impeded trade environment before us.”
Just as the rise of the middle class in China 15 years ago put Australian food on dinner plates in the People’s Republic, India’s middle class will also consume Australian food. How quickly that happens in India’s democracy and more fluid economy, compared to China’s organised five-year planning cycles, remains to be seen.
And while Indian governments will strive to look after its huge and important agricultural constituency, the fact that India has just 3.7 per cent of the world’s arable land, about four per cent of the global freshwater supply, and has to feed a huge population with a burgeoning middle class that will want better quality and more protein-rich foods, means it will have to look overseas.
Even if India is self-sufficient today in some foodstuffs, population and the changing patterns of consumption will increase demand, not only for high-end food, but also for the basics.
Along with the dried legumes Australia already exports, Bennett sees opportunities in sheep meat, nuts, grapes, avocados and other fresh produce.
Local rules apply
Dr Helen Nugent AC FAICD, a member of the advisory board for the Centre for Australia-India Relations, says a key difference in the rise of India compared with previous developing nations is that it will primarily be driven by brain power, not lowcost manufacturing.
The Indian services sector accounts for almost 55 per cent of its GDP, providing opportunities for Australia in services such as digital transformation, education, finance, fintech, infrastructure and clean energy.
Nugent sees potential for exports of medical devices from companies such as Cochlear and ResMed. There are also opportunities in fertiliser and farming know-how.
Australians doing business in India need to be aware of the preponderance of family-owned businesses — 15 of the top 20 companies are family owned and about 90 per cent of businesses are family-controlled.
This means Australian companies have to be careful not to send a junior person to meet a senior member of the family, says Nugent, who has a PhD in Indian history and sits on the global advisory board of Indian and American digital transformation company UST Global.
“They need to invest time in getting to know people, because the leaders of these family-owned conglomerates are thinking of the next couple of generations and of retaining control,” she says.
Relaxing restrictions
During the past decade, the government of Narendra Modi has been working to improve the ease of doing business and attracting more foreign investment.
It is trying to standardise regulatory approvals across states and has overseen the creation of the Gujarat International Finance TecCity — known as GIFT City — an international financial services hub that includes a special economic zone, which provides tax exemptions and simplified regulation for foreign companies.
“[Even so], the ongoing evolution of the regulatory environment introduces a degree of unpredictability for businesses, which presents a challenge,” says Leigh Howard GAICD, CEO of Asialink Business at the University of Melbourne.
The think tank focuses on developing an Asiacapable Australian workforce to seize opportunities in the region.
“It’s about understanding the current state of play in India, and even within specific territories,” says Howard. “You will need to tap into local expertise, embrace what I call ‘compliance agility’ and prioritise risk management to navigate the diverse regulatory landscapes within India effectively.”
Directors will also need to consider how to transpose the governance models they use in Australia to the Indian regulatory environments and market landscapes. And they will need to have a long-term plan for how they will roll out their business in India.
“The biggest returns for business don’t come from markets that are fully formed, evolved and stabilised,” says Howard.“If you want the highest returns and to benefit from a first-mover advantage, then you will have to look at what scenarios are likely to play out and what role your business can play in that trajectory.”
In 2022–23, India was Australia’s fourth-largest export market, with $32.4b in exports, only a fraction of the $219b of Australian exports to China in the same year.
Coal, education-related travel and gold topped the list. India was 20th on the list of Australia investment destinations, with $22.2b in investment in 2023, just 0.6 per cent of Australia’s total foreign investment.
The Australia-India Economic Cooperation and Trade Agreement (ECTA) has been in force since December 2022.
Over 85 per cent of Australian goods exports by value to India are now tariff-free, rising to 90 per cent by 1 January 2026, and high tariffs have been reduced on some further agricultural products.In addition, 96 per cent of imports from India are now tariff-free, rising to 100 per cent by 1 January 2026.
“There’s a lasting opportunity with our trade into India, certainly from an agri point of view, particularly as we see a less-impeded trade environment before us.” Mark Bennett, ANZ
“They need to invest time in getting to know people, because the leaders of these family-owned conglomerates are thinking of the next couple of generations and retaining control.” Dr Helen Nugent, Centre for Australia-India Relations.
Doing business with India: At a glance
- 432m The size of India's rapidly growing middle class market, projected to be 715 million by 2030-31, 47% of the total population
- $34.2b India was Australia's fourth-largest export market in 2022–23, primarily coal, gold and petroleum gas
- $12.8b Value of Indian exports to Australia in FY24, mainly petroleum products, engineering goods and pharmaceuticals
- 85% Percentage of Australian goods exports by value that are now tariff-free. This will rise to 90% in January 2026
- $22.2b India accounted for just 0.6% of Australia's total foreign investment in 2022–23
Market awareness
Trena Blair GAICD, founder and CEO of consultancy FD Global Connections, notes that entering a foreign market requires a detailed risk-reward analysis by directors. “Ultimately, directors play a pivotal role in balancing the boldness required for market expansion with the caution necessary to protect the company’s interests,” she says. “This requires combining deep local knowledge with robust governance frameworks.”
They need to identify and prioritise risks hindering market entry or disrupting operations, including regulatory challenges, technological vulnerabilities, geopolitical tensions or supply chain fragilities.
Advisory councils composed of local industry leaders, regulatory experts and community representatives can provide invaluable on-theground insights.
“These local allies understand cultural nuances, market dynamics and potential obstacles better than headquarters ever could,” says Blair. “Their input strengthens decision-making and fosters trust and credibility with key stakeholders in the target market.” This is particularly important in India, a country of 28 states and eight union territories, each of which comes with significant cultural and linguistic diversity.
“When you’re thinking about expansion, you have to get really granular around which state, which industry, which sector, which companies you want to engage with,” says Swati Dave GAICD, advisory board chair of the Centre for Australia-India Relations.
And as with many other markets in Asia, building strong long-term relationships is essential. “It’s very hard when the market expects you to deliver things in the short to medium term, but the reality is, when you’re dealing in India, that’s not the time frame that will deliver success,” she says. “You have to make sure you calibrate the time frames in both markets.”
Nugent, who in addition to her role at the Centre for Australia-India Relations is the chair of Ausgrid and a non-executive director of TPG Telecom and IAG, says that along with not understanding the longer time frame required to do business in India, directors should be mindful of the regulatory risk of not understanding the diversity and cultural nuances of different markets in India.
“Equally, on the other side, if you overestimate those risks and apply an unwarranted higher weighted average cost of capital, you might miss the opportunity. I think that’s a risk.”
Smart companies will enter the Indian market with a trusted partner whose values and time frame align with their own, one which is familiar with the geography and market segment they’re targeting.
A local advisory board is also useful to provide context and market understanding. “They must be people you trust, and who challenge you, not just do a head nod,” says Nugent. “They’ve got to be truly value-adding for you.” But boards also need to make the effort to understand India for themselves and visit.
It’s not a set-and-forget market. “India offers Australia a massive opportunity,” says Nugent, adding it’s now India’s time in the sun, following on from Japan, Korea and China. “We in Australia need to seize the moment and power through this next wave of growth.
In for the long haul
Acusensus, an ASX-listed maker of road safety equipment, is investing in India for the long term. Indian market share for sales of its traffic infringement-detection cameras is less than five per cent and Indian sales make up less than two per cent of Acusensus sales.
“The next 10 years are the big years of India,” says co-founder and chair Ravin Mirchandani GAICD. “What we saw in China from 2000–10 is what we’ll see in India in 2024–34. We have a beachhead and we’re waiting for the country to evolve in its maturity to appreciate the difference in the IP and technology we bring.
Our intent is to have a proven track record when that happens.” Acusensus already exports to the US and the UK, and the decision to enter the Indian market was driven in part because its largest investor is Indian company Ador Powertron, which also makes road safety equipment and distributes Acusensus products.
“It takes a very long time for anything to come to an end or to fruition — two or three times longer than in Australia, says Mirchandani. "So you need boots on the ground, walking the corridors of government, to understand what’s going on, and that is expensive.”
Noting that expanding to India with a trusted partner is low-risk and low-cost, Mirchandani, however, warns that “cricket, curry and Commonwealth” mean differences between India and Australia can be underestimated, and it’s important to have a local partner that understands the context of a market.
“In Australia, we like to be straightforward and get to the point very quickly. In India, people really want to get to know you as a person before they want to talk about business, because the legal system in India is weak, and therefore the ability to enforce a contract is very limited.”
Austrade and the large network of Indian alumni of Australian universities can provide valuable contacts. The challenge for Australia is to remain engaged with India as other nations also eye the potential of the country’s large and expanding economy.
Insights into India
As former chair of Blackmores during the supplements company’s rapid expansion into South East Asia, there’s not much Anne TemplemanJones FAICD doesn’t know about penetrating the Indian market.
What exposure have you had to India?
My first exposure was a family holiday in 2007 with our young children, a month of traveling through India, experiencing the culture, food and people. In my professional life, exposure to India came in a couple of ways.
Blackmores sourced raw material from India, so I had some exposure working with management to understand what it was like to enter that new market, where the key relationships that needed to be developed were, and what it meant in terms of ESG and cultural alignment.
Further exposure came with CommBank, setting up a global processing and delivery centre. It was about forming [local] relationships, understanding the business environment we were working in, and ensuring the locals understood ours. A lot comes down to people.
It’s important to understand the market you’re going into and the cultural side, rather than thinking about it from a sales perspective.
What is unique or overlooked about the Indian market?
There’s a lot more regulation than is perhaps understood. Understanding the regulatory environment for the particular sector you’re going into is important. It’s wise to use the agencies already available, which have the connections and can give guidance on expectations.
Understanding the cultural norms is also important. Going there as an Australian company, whether big or small, your success is predicated on the relationships you build and the respect you have for them.
The Australian Trade and Investment Commission (Austrade), the Department of Foreign Affairs and Trade, and the Australia-India Chamber of Commerce can help. There are many people who will put you in touch with the right people and jointly arrange meetings.
What is unique about India is the degree of education and sophistication. They have a lot of engineers in the technology space qualifying every year, and many international companies have operations there. They’ve had a lot of experience with companies from the US, UK and Australia operating in India. That part of it is not well understood.
There’s also an assumption that you go to one city and then you know how India works culturally. But there are many different subsections in a highly populated country. What perhaps isn’t well understood when companies first go there is the importance of ceremony. As with our First Nations perspective and Welcome to Country, ceremony must be respected, not discarded, even in business.
What other challenges should directors be alert to?
In principle, think about it the same as going into any new market — the risks in terms of understanding expectations about culture, the way you operate, the legal jurisdiction and prohibitions. Respect there is a rule of law that might be different to ours.
Keeping your employees safe, understanding how they can and can’t operate, where they should and shouldn’t operate, is also something you should be mindful of. Any time you go into a new market, you’re utilising shareholder capital.
The shareholder lens over the top of it is, do we have a robust structure? Are we dealing with the right partners? What outcome are we looking to achieve and where’s the value? You have an obligation to think about it from a shareholder perspective.
[Expansion] brings in complexities that, from a risk perspective, your management must manage, but the board should be aware of. These include exposure to foreign currency, to another jurisdiction, to supply chains and third parties you might not have had to deal with before.
When you get deeper into those relationships, it’s important that your people on the ground in India are experts, but also that they have a balanced view about who they’re working for.
Visiting the country is a vital part of governing expansion into India. Is there value in broader board exposure to the market?
If you’re going into India as a new market, it’s probably too early to take the whole board, but don’t wait too long to take one or two of those people who might have an interest or past experience.
Who is on the journey and at what point in time is important. It’s much easier to have the discussion around the boardroom table and for management to be heard, than if you’re looking at it from the perspective of asking people to support a decision of investment.
If this market is really so important to invest in, at least have a bit more equality around the types of conversations you can have when discussing the possibilities and the risks. Otherwise, it will become weighted to one side of the argument or the other.
This article first appeared under the headline ‘Passage to India’ in the March 2025 issue of Company Director magazine.
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