The unfolding coronavirus (COVID-19) pandemic is placing enormous strain on economic structures worldwide. The crisis has understandably realigned global political priorities, seeing many important initiatives postponed. Earlier in the year, India and Australia were on the path to deepening their mutual engagement. While nothing is certain in a COVID-19 world, we should not lose sight of the importance of Indian-Australian engagement when we enter a ‘new normal’ post the current intense COVID -19 response phase.
India has continued to emerge as a priority market for Australia. Across education, business and government we continue to develop and refine our strategies for effective and sustainable long-term engagement. The Australia-India Business Exchange (AIBX) in late February was a timely example of the commitment of industry and government to broaden and deepen our commercial engagement with India.
In what was Australia’s largest official business delegation to India of the past four years, Minister for Trade, Tourism and Investment, Simon Birmingham, led representatives from more than 100 businesses spanning education, tourism, agribusiness, premium products, health, resources and infrastructure.
These areas of focus were informed by the landmark India Economic Strategy to 2035
which was developed by University of Queensland Chancellor and former Secretary of the Department of Foreign Affairs and Trade, Peter Varghese AO. At the practical level, AIBX showcased potential opportunities for Australia in the world’s fastest growing large economy.
India is not the next China
India is set to become the world’s third-largest economy by 2035 and surpass China as the most populous.
By 2035, India’s five largest cities will have economies of comparable size to middle income countries today and by 2025, one-fifth of the world’s working age population will be Indian.
Already, India’s aspirational middle class is 12 times the size of Australia’s population. 
All these numbers highlight the scale of India’s workforce and consumer market, while a projected online penetration rate of more than 850 million internet users by 2030
increases access to it.
Given these numbers, it is easy to focus on scale and lose sight of specifics. For Australia, India remains largely uncharted, even in areas seen as traditional strengths such as education and resources. Our total trade with India in goods and services currently represents less than four per cent of our international two-way trade, placing it well behind China, Japan and South Korea. In 2018-19, India was in fact Australia's eighth-largest trading partner, with two-way goods and services trade valued at $30.3 billion.
By comparison, two-way trade with China was valued at $235 billion.
However, to grow our trade and investment with India, we need to understand it on its own terms. As the IES observes: “India is the only country with the scale to match China, but it will not be the next China."
China and India are two very different markets operating under vastly different political, economic and social systems.
In targeting opportunities, it is worth exploring the high-growth sectors of the Indian economy that have synergies with Australian strengths and capability.
Beyond cricket and coal
The sectors prioritised during AIBX were all high-growth and present very real prospects for Australian organisations to both strengthen existing relationships and forge new partnerships and collaborations. The IES identified 10 areas of the Indian market where Australia has competitive advantages and of these, no sector is considered to hold more promise than education, which is considered our ‘flagship’ sector.
With the rise of India’s working and consumer classes, the demand for quality education and training is expanding exponentially. In 2026, the 18-22-year-old demographic will peak at 126 million. A call to respond was made in 2015, when the Indian Government set itself the daunting challenge of upskilling 400 million people by 2022, as part of its Skills India campaign.
As a world-class education provider, Australia has already achieved many successes in the Indian market across secondary, tertiary and vocational training, but there is scope to take this to an entirely new level.
Opportunity presents itself in various ways, from welcoming more high-calibre Indian students wanting to study abroad, and deepening two-way public-private research links, through to further exploring innovative online delivery options. Australia consistently ranks as a top four study destination for Indian students and we need to further leverage our brand.
In terms of collaboration, the strong partnership between Melbourne University’s Nossal Institute for Global Health, the Melbourne Disability Institute and India’s Department of Empowerment of Persons with Disabilities (DEPWD), to develop an economic case for increased disability investment in India, serves as an excellent current case study.
Measurable and strategic engagement
Other commentators on this blog have written about the importance of the IES as a strategic blueprint that sets the narrative for engagement.
A strategy of this kind is particularly needed, given negotiations on a bilateral trade agreement have been protracted and remain ongoing. The IES sets clear and measurable targets, including, to elevate India into our top three export markets by 2035 and to grow our outbound investment into India ten-fold.
India's move to develop a reciprocal Australia Economic Strategy (AES) is prudent and sensible. Set to be released later this year, this is a first of its kind for India and underscores the importance it too places in the bilateral relationship.
The development of the AES is being led by former senior diplomat Anil Wadhwa, who, in an industry briefing in Sydney last December, highlighted that the AES would focus on "emerging fields for the future, creative ideas and areas in which Australia and India have not engaged with each other".
He identified key growth sectors, including MedTech, METS, the blue economy, sports technology, AgTech and other areas of innovation.
Building India capabilities for corporate Australia
Historically, many Australian organisations have tended to put India in the 'too hard basket'. To succeed, gaining a deeper understanding of the ways of doing business with Indian partners, the importance of cultural nuances and the significance of developing interpersonal connections and networks are essential.
With preparation, a growth mindset and a long-term view, Australian organisations can become more diversified and sustainable by doing business with India. The rewards of doing business with India can far outweigh the risks. The post COVID -19 response phase will be an ideal time to implement a new growth mindset.