Doing business with India

Which agribusiness sectors in Australia are well placed to trade with India? Read our India overview.

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Are you keen to expand into India? Opportunities exist for protein-related suppliers, agricultural services and niche sectors, explains NAB Agribusiness Economist, Michael Creed.

Food security: India versus China

While India’s population is swelling – currently 1.22 billion, with 50 percent below the age of 25 – the country’s impact on global food markets isn’t predicted to be as significant as that of China. Why? Because India tends to be largely self-sufficient in food production, so most of the opportunities are likely to be either in services (such as agronomics and supply chain) or in niche products that appeal to the upper middle class.

Heading towards 2020, India’s self-sufficiency is likely to prevail – the UN even suggests India will be net exporters of a few agricultural commodities by that time.

Protein consumption on the rise

Per capita incomes in India have been rising considerably in recent years and this has been met with an increase in per capita protein consumption. With further income growth expected, NAB anticipates this trend will continue. For instance, if India were to move from current per capita GDP levels to those of China, then an increase of almost 60 percent in per capita protein consumption could be on the cards. With a current population of 1.22 billion, such a shift in consumption patterns is likely to result in considerable hikes in grains, horticulture and livestock consumption.

Agricultural services opportunity

An increased demand for protein would require increased productivity in India’s farming sector. While the UN believes India is up to the task, the sheer size and scale of the country’s agricultural sector is likely to mean some outside help will be required. This would provide ample opportunity for Australia’s agricultural services sectors, including agronomy and along the supply chain. Australian agriculture has an established reputation for efficiency and quality, thanks in large part to the quality of services available to our agricultural sector. As such, there’s considerable scope for Australian expertise to be used in the Indian agricultural sector.

Demand for niche sectors

Another potential opportunity for Australian agribusiness could arise from niche sectors. For example, a rising middle class is likely to develop tastes for more Westernised and premium products, such as woollen clothing and wine. This has already started to occur in China, where the value of Chinese imports of Australian wine have rocketed from just under $10 million in 2004–05 to more than $180 million in 2010–11. If this trend is copied in India, it would provide a significant boost to the Australian wine industry.

NAB opens for business in India

We can help you explore custom-made agribusiness opportunities in India by combining local, Australian and global banking experience. Contact your NAB Agribusiness Manager to find out more.