GOVERNMENT OFWESTERN AUSTRALIA

Department of Jobs, Tourism, Science and Innovation

India Market Outlook2020-21

Trade and investment opportunities for Western Australian businesses

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India market overview

Gross domestic product

US$2.9 trillion(IMF 2019)

2nd most populous country in the world

1.366 billion(2019)

5th largesteconomy in the world

India is a large and growing market, offering a broad range of long-term opportunities for Western Australian businesses. India’s economy is developing through industrial and manufacturing growth and increased consumption from a rising middle class.

India also has one of the world’s fastest growing services sectors. As India develops it will need many goods and services that Western Australia provides, including those from the education, mining, energy, agriculture and tourism sectors.

Western Australia’s trade relationship with India

1996Established the WA Investment and Trade Office in India

$2.2 billion15th largest trading partner in 2019

$1.7 billion11th largest merchandise export market, with 12% of Australia’s merchandise exports to India in 2019

WA merchandise exports to India in 2019

28%Petroleum

18%Alumina

16%Gold

Largest market for

international students

31,000 arrivals11th largest market for international visitors in 2019

The Western Australian Government supports local businesses pursuing opportunities with India through Invest and Trade WA and Western Australia’s Investment and Trade Office in Mumbai. This includes advice and assistance to Western Australian companies looking to export to Indonesia or attract investment to grow their business.

The relationship between Western Australia and India is also supported by the Western Australia Andhra Pradesh Sister-State Relationship Agreement. Established in 2016, Western Australia and Andhra Pradesh committed to work together in mining, mining services, agriculture, fisheries, energy, education and training and water management.

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India is a key market under Western Australia’s Asian Engagement Strategy 2019-2030 which supports:

» maximising trade and investment opportunities

» Asia literacy and capability

» people-to-people links

» business networks and communities.

The strategy provides direct support to Western Australian businesses through 2 programs:

» Access Asia Business Grants fund initiatives to increase trade and investment with Asia.

» Asia Business Capability workshops support people in gaining the Asia literacy skills required to develop sophisticated relationships and capture more trade opportunities.

An India Economic Strategy to 2035: Navigating from potential to deliveryIn November 2018, the Australian Government welcomed the report An India Economic Strategy to 2035: Navigating from potential to delivery. Commissioned by the Australian Government and written by Mr Peter Varghese AO, the report recommends a range of practical measures for India to become one of Australia’s top economic partners.

Australia India Comprehensive Strategic PartnershipIn June 2020, the prime ministers of Australia and India announced the new Comprehensive Strategic Partnership. This partnership reflects Australia and India’s strong commitment to working together at a time of unprecedented global challenges and is in line with India’s increasing engagement in the Indo-Pacific region and Australia’s Indo-Pacific interests.

The partnership outlines commitments to increase cooperation in a range of areas, including science, defence, tourism, education, technology and research, and agriculture and water resources management.

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Trade and investment opportunities with India

An outline of trade and investment opportunities with India is provided below, categorised under Western Australia’s key industry sectors.

Each section also describes the Western Australian Government’s actions to support businesses pursuing these opportunities in 2020-21. The actions are a combination of initiatives to assist Western Australian businesses to develop their export capability (sector-based) and activities that specifically support trade and investment opportunities with India (market-based).

The COVID-19 pandemic has affected both the opportunities that can be pursued and the way the Western Australian Government can practically support Western Australian businesses. The Western Australian Government has adapted its approach to best support ongoing engagement with the Indian market and will continue to adapt as the COVID-19 situation changes in both India and Western Australia.

EnergyIndia’s demand for energy is growing as its economy develops and population increases. As energy demand rises, India is likely to meet a greater share of its energy needs through imports. The composition of India’s energy demand is also likely to shift more towards gas and cleaner energy.

By 2030, India could represent more than a third of global electric vehicle (EV) battery demand if it meets its goal for a rapid transition to electric mobility. To manufacture EV batteries domestically, the Indian Government is actively assessing global supplies of battery minerals and evaluating strategic partnerships with energy-rich countries and private sector partnerships for securing offtake agreements. As such, there are

opportunities for Indian investment in Western Australia through offtake agreements for key battery minerals.

India’s long-term objective is to increase its battery manufacturing capacity while importing only the cathode or its raw materials. This presents a medium to long-term opportunity for Western Australia to export either cathode active materials or, potentially, manufactured cathodes to India.

There are also opportunities to provide technical support services in India as it seeks to increase domestic energy capacity, particularly in renewables. Western Australia’s expertise in energy storage systems – for example micro grids, virtual power plants and standalone power systems – presents an opportunity for collaboration with India on the supply of cost-competitive, reliable, battery-based energy supply.

Western Australian Government actions » Implement the Energy Transformation Strategy to attract investment into Western Australia.

» Attract investment into Western Australia’s future battery industry from India by:

› obtaining business intelligence on cathode active materials (CAM) manufacturers in India and identifying Western Australia’s comparative advantages

› exploring incentives to attract and enable investment in CAM manufacturing

› developing public investment attraction and trade promotion strategies, and partnering with stakeholders (such as Invest India) to promote investment in Western Australia’s battery minerals.

» Market Western Australia’s investment opportunities in renewable hydrogen.

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Tourism, events and creative industriesWhile COVID-19 has disrupted international tourism, India still offers strong long-term potential as a tourism market for Western Australia. There is a strong link between international education and tourism, providing an opportunity for Western Australia to capitalise on the growth in student numbers from India over the past few years.

India was Western Australia’s 11th largest market for international visitors in 2019, with 31,000 visitors. This was more than double the number of visitors in 2013. High value and business travellers from India are a current target market for Western Australia.

In creative industries, there is potential for Western Australia to partner with India’s large film and television industry and to attract investment into product and content development.

Western Australian Government actions » Finalise the tourism recovery plan and develop the long-term tourism strategy to ensure industry sustainability and drive international tourism post COVID-19.

» Promote Perth as a direct flight destination to increase business and leisure tourism to Western Australia from India.

International educationIndia is the largest source of international students in Western Australia, with around 8,900 enrolments in 2019, representing 17% of all international student enrolments.

The report An India Economic Strategy To 2035 identified education as the flagship sector for the India-Australia relationship, noting:

» India’s tertiary-age (18–22) population is the largest in the world and is projected to peak at 126 million in 2026

» India aims to lift the enrolment rate in higher education from 27% to 50% by 2030

» the Indian Government has estimated an additional 120 million skilled workers will be required by 2022, fuelling demand for vocational training.

Education agents recruit over 90% of students coming to Australia from India. The education business development manager based in Western Australia’s Investment and Trade Office in Mumbai works with education agents across India to promote Western Australia as an education destination, including undertaking education agent training and familiarisation tours.

Western Australia can also capitalise on its safe handling of the COVID-19 pandemic to market itself as an attractive destination for Indian students.

Western Australian Government actions » Develop and implement an international education recovery and renewal plan.

» Undertake in-market activities to promote Western Australia as a high-quality and safe international education destination.

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» Gather intelligence to provide regular updates on in-market activities and trends to inform Western Australia’s international education policy and ensure it is conducive for recovery.

» Proactively promote Western Australian tertiary education and TAFE colleges to prospective students in India.

» Promote key educational and skill transfer opportunities provided in Western Australia, including robotics and within the space industry.

Mining and mining equipment, technology and services (METS)India’s increasing urbanisation and industrial activity will drive demand for mineral commodities. While a range of factors have caused trade in mineral commodities to be volatile in the past, the longer-term prospects for export of iron ore, copper, nickel and gold to India are positive.

India’s aspirations for its mining industry include accelerating exploration activity, increasing private sector participation and minimising environmental impact. As India seeks to achieve these aims and improve productivity in its mining sector, there may be opportunities for Western Australian METS businesses, particularly in the areas of environmental management, safety, exploration and remote operations.

Western Australian Government actions » Promote Western Australia’s mining services and technologies to India’s resource sector.

» Facilitate long-term technology and research and development partnerships with companies in India’s resources value chain.

» Facilitate capacity building partnerships with Indian technical training institutions in the mining sector.

Primary industriesWestern Australia’s agricultural trade with India is relatively small. However as India’s economy develops, incomes rise and industrialisation and urbanisation reduces the amount of land available for agricultural production, India will likely need to source more of its food products through imports.

Specific agrifood opportunities in India for Western Australia include grains (particularly malting barley), pulses (lupins, chickpeas and lentils), rolled oats and avocadoes. Opportunities may also emerge for value-added products sought by the growing middle class, such as wine and processed food, while the introduction of direct flights could open up markets for fresh premium products.

As India’s agricultural industry strives to meet growing demand, there are opportunities for Western Australian businesses to help India to increase the efficiency and output of its agricultural sector through the provision of agricultural technology and services. There is also an opportunity for Western Australian agribusinesses to provide products and services related to grain storage and handling.

Western Australian Government actions » Increase visibility of Western Australia’s agrifood commodities and premium products in India.

» Assist Western Australia’s agrifood industries to gain access to new markets and improve access to existing markets.

» Support virtual engagement between Indian buyers and Western Australian farmers or commodity sellers seeking partnerships.

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Western Australian business success with India

Village Energy Village Energy is a Western Australian energy technology company that helps power distribution utilities in Asian economies provide cheaper, cleaner and more reliable power.

In 2018, Western Australia’s Investment and Trade Office in Mumbai facilitated introductions with the Government of Andhra Pradesh that led to Village Energy’s first utility contract in India. Under this contract, Village Energy has implemented one of the most advanced grid digitisation and smart-meter projects in the world. The technology has delivered 30% cost reductions, 100% peak load management, and a 75% reduction in power interruptions.

Village Energy’s market is comprised predominately of large government-owned

organisations. With the continued support of the Australian and Western Australian Governments, Village Energy has been able to enter new markets in India and across south-east Asia through developing strategic relationships with government, industry stakeholders and customers.

My Flexhealth InternationalMy Flex Health International (MFHI) is a Western Australian healthcare company specialising in staffing solutions, home care services and training. MFHI have had a presence in the Asia market since 2012 when the company opened its first overseas office in Kuala Lumpur, Malaysia.

In 2019, MFHI decided to expand its operations into India, after learning of opportunities while participating in an Austrade education technology roadshow in India.

Working with the Western Australian Investment and Trade Office in Mumbai, MFHI developed a strategy to deliver vocational education training in India. Following introductions to potential Indian business partners through the India office, MFHI found a suitable partner in Hyderabad. With this in-market partnership, MFHI officially opened their

Hyderabad premises in August 2019, which is servicing 4 cities across India.

MFHI has finalised agreements with a number of countries including Denmark, United Arab Emirates and Canada that want Indian home care workers trained in the Australian Standards CHC33015 - Certificate III in Individual Support (Ageing, Home and Community and Disability). MFHI is now working to establish virtual training platforms to meet the needs of worldwide clients.

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Western Australian Government supportWestern Australia’s Investment and Trade Office in Mumbai has supported Western Australian businesses seeking to access trade and investment opportunities in India since 1996.

The office has established a strong network of contacts to support Western Australian businesses in India. This includes close working relationships with the Australian Embassy in Delhi and with the Australian consulates in Mumbai, Chennai and Kolkata.

In 2020-21, Western Australia’s International Investment and Trade Office Network will move to a regional hub model. The office in India will continue to operate as part of the India-Gulf regional hub, providing the following services:

» advice on Indian and Gulf markets and specific trade and investment opportunities

» advice on market entry strategies » supporting in-market promotion and visits

» facilitating introductions to potential customers and partners.

Invest and Trade WAThe Department of Jobs, Tourism, Science and Innovation’s Invest and Trade WA team promotes Western Australia as a destination for investment, provides a ‘one-stop-shop’ for incoming trade and investment enquiries, and assists WA businesses to develop and expand their exports.

Contact:investandtrade@jtsi.wa.gov.au

Web:www.investandtrade.wa.gov.au

View Western Australia’s Asian Engagement Strategy 2019-2030

www.wa.gov.au/asian-engagement-strategy

GOVERNMENT OFWESTERN AUSTRALIA

Department of Jobs, Tourism, Science and Innovation