Western Australia’s trade with India is growing in value and diversity, on the back of demographic changes and strong economic growth, according to Simon Johnson, the Department of Industry and Resources’ regional director for India.
Western Australia’s trade with India is growing in value and diversity, on the back of demographic changes and strong economic growth, according to Simon Johnson, the Department of Industry and Resources’ regional director for India.
Mr Johnson, who is based at the WA trade office in Mumbai and visited Perth this week, said India had recently overtaken some of the state’s traditional export markets.
“India now is our third largest export market for WA, behind China and Japan, but ahead of the US, Singapore and the UK,” he said.
WA’s exports to India have grown by 56 per cent during the past year, with the value of the state’s exports now $5.6 billion annually.
According to the Department of Foreign Affairs and Trade, Australia’s merchandise exports to India have increased by almost 35 per cent a year over the past five years.
Total merchandise exports have reached $10.1 billion.
“WA accounts for 50 per cent of Australia’s total merchandised exports to India, and that’s excluding diamonds. When you take diamonds into account, it’s close to 60 per cent,” Mr Johnson said.
And WA was also moving away from its reliance on gold as a key export, he said.
“While our exports have increased, our dependency on gold has diminished, which means our export base is broadening out,” Mr Johnson told WA Business News.
In addition to an economic growth rate of 9 per cent, Mr Johnson said India’s rapidly growing middle class was supporting an increase in trade.
“Depending where you measure from, there’s around 250 to 300 million people in the Indian middle class,” Mr Johnson said.
“These people are predominantly young, very astute, and are buying consumer goods.”
The profile of India’s economic growth differed from its neighbour, China, he said.
“India is not like China, which is wholly export driven. India is domestically driven – it’s playing catch up.”
Sectors such as agriculture – especially wheat, pulses and wool – and software development are growing, while services industries, including tourism and education, are providing opportunities for WA companies.
Mining services is also a growth sector, with the Indian government due to pass legislation in early 2008 to improve transparency in the industry and attract foreign investment.
“The idea is to streamline the mining sector, to make it more attractive for investors,” Mr Johnson said.
Other challenges, such as infrastructure bottlenecks in India’s ports and railways, are an issue for exporters, in addition to cultural differences.
The latter is the focus of a new book by Western Australian author, Peggy Holroyde, which is intended to help Australians do business in India.
The book, which was launched last week and is titled An ABC of Indian Culture, is a compendium of Indian words, phrases and core concepts.
Ms Holryode, who was previously involved with cultural organisation Indian Ocean Network and lived in India for many years, said the book provides a reference point for doing business in the country.
“You can’t really get maximum value in trade unless you really understand the cultural values of a people who are culturally unfamiliar,” she said.
“You have to know the nuances.”
