This agreement aims to leverage the countries’ complementary attributes – from India’s ample manufacturing capabilities, talent pool and technology, to Australia’s strength in agribusiness, resources and infrastructure. It also provides more accessible market entry pathways to strengthen economic ties between the two countries and drive more resilient supply chains.
Now that the Agreement passed through the Federal Parliament of Australia last week, it’s the ideal time to assess your India strategy. What are the key opportunities your Agribusiness, Food & Beverage business can explore as part of your India strategy? Below, we explore some areas of opportunity you can leverage.
Growing demand for imported goods
India’s middle class has more than doubled in the past 15 years, now representing 31 per cent of the Indian population, and is forecast to represent a massive 63 per cent of the Indian population by 2047 according to The Times of India. As a result, there’s rising demand for commodities such as luxury and imported goods – a golden opportunity the Australian market can tap into. With the elite value placed on the ‘Australia made’ label, there’s growing appetite for premium food and beverage such as wine, beauty products, and dietary supplements.
Carefully considering consumer needs
While there’s high demand for imported goods, importers should be mindful of consumer behavior in the Indian market. For instance, significant opportunities exist for sheep and goat meat into India. However, care needs to be given on delivery with considerations around live export in Australia, and the preference by the Indian market for 'fresh meat'.
Another example is Australian infant milk powder, which could be looking at its next major overseas market with India presenting opportunities due to concerns around local manufacturing of this product. Nestle is already a large player in the domestic Indian market, but opportunities remain for Australian manufacturers.
This only scratches the surface of the intricacies businesses face when looking at the Indian market. Establishing a strong strategy, gaining an understanding of the market and consumer preferences will be key. When entering the market with a solid approach, the rewards can be fruitful.
Different demands in different states
Considering the breadth and diversity of culture within India, it’s important to consider who you’re targeting, and their preferences and requirements. While there are opportunities in many sub-sectors, location and positioning will be key to your success.
The targeting of Australian exports into India should be done on a selective basis, as different geographical areas have different desires for certain products, and different rules and preferences.
Avoid unnecessary bureaucracy
Before entering any new market, you’ll need to ensure your business is set up in a customs and trade efficient structure, to help avoid unnecessary bureaucracy.
Market access remains a challenge, in particular due to tariff quotas, import licencing and labelling requirements. This means businesses will need to consider the import requirements prior to entering the Indian market.
While Australia will have access to tariff quotas for certain products including agriculture goods, high tariffs (albeit at reduce rates) remain in place for many other products. Organisations will need to carefully consider their strategies to minimise customs liabilities that can be applied by exploring customs valuation strategies and proposed distribution models.
As global expansion strategy, market entry requirements and export considerations differ for each organisation, please reach out to discuss opportunities in the context of your business.
