India country brief

Overview

India, the world's largest democracy, is a major power. As strategic partners since 2009, Australia and India enjoy strong political, economic and community ties.

India was Australia's eighth-largest trading partner and fifth-largest export market in 2018-19, driven by coal and international education. Two-way goods and services trade with India was $30.3 billion in 2018-19, and the level of two-way investment was $30.7 billion in 2018. We have an ambitious agenda to expand our trade and economic relationship, as outlined in the India Economic Strategy (IES), which was released in July 2018 and endorsed by the Australian Government in November 2018.

The most recent prime ministerial visit to India was by Minister Turnbull from 9 to 12 April 2017. His visit delivered a range of outcomes to strengthen our economic partnership, knowledge partnership and strategic partnership with India.

Political overview

Indian government

The Republic of India is a federal democracy comprising 28 states and nine union territories. The Head of State is the President and the Head of Government is the Prime Minister.

The Indian Parliament is bicameral, comprising the 545-member Lok Sabha ('people's' or lower house) and the 245-member Rajya Sabha ('states' or upper house). Lok Sabha members are elected by universal adult suffrage every five years (except for two appointed Anglo-Indian members) using the 'first past the post' voting system. The Rajya Sabha is not subject to dissolution; one third of its members retire every second year. One third of Rajya Sabha members are elected every two years by the legislative assemblies of the Indian states.

The 2019 Indian national election for the Lok Sabha saw the Bharatiya Janata Party (BJP) win a second consecutive term with 303 out of 543 seats.

Economic overview

Over the next 20 years, a growing India will need many of Australia's goods and services, including agriculture, education and skills training, and healthcare.

Since 2000, India's GDP has grown seven-fold to reach USD3 trillion. India's economy is forecast to become the third largest by 2030 (currently seventh) in market exchange rate terms. India already has the third largest economy in PPP terms and is set to maintain this ranking. The two-way stock of investment was valued at AUD30.7 billion in 2018. In 2018, Australia's investment in India was valued at AUD15.6 billion and India's investment in Australia was valued at AUD15.1 billion. India was Australia's 18th largest investment destination.

India's post-independence economy (1947-1991) was characterised by a planned approach to development, with extensive regulation and protectionism. From 1991, India underwent a process of economic liberalisation that helped it move towards a market-based economy. For a decade from the late 1990s, the Indian economy had an annual average growth rate above seven per cent. Tens of millions of Indians have been lifted out of poverty since the 1990s. However, economic growth in the country remains uneven.

Prime Minister Modi is prosecuting an ambitious economic reform agenda. India seeks to become a USD5 trillion economy by 2024.  However, with growth rates currently slowing, India's policy makers are focusing on increasing GST compliance, bringing more firms into the formal economy and reducing bad debts within the financial sector. A number of measures have been introduced to address the slowdown, including a cut to the corporate tax rate. Prime Minister Modi's Government is also working to improve the ease of doing business and encouraging inward investment and export growth.

The Australian Government provides advice on doing business in India through the Austrade website. The bi-monthly Business Envoy publication offers perspectives and insights on the economic and market impacts of geopolitical events and trends from Australia's global diplomatic network.

See the latest economic facts on our economic relationship with India

Diplomatic relations

Australia and India established diplomatic relations in the pre-Independence period, when the Consulate General of India was first opened as a Trade Office in Sydney in 1941. India's first High Commissioner to Australia arrived in Canberra in 1945. In March 1944, Lieutenant-General Iven Mackay was appointed Australia's first High Commissioner to India.

Bilateral economic relationship

In 2017 the Australian Government commissioned an independent India Economic Strategy (IES) to identify opportunities for Australian businesses in India. The strategy was led by Mr Peter Varghese, a former Secretary of the Department of Foreign Affairs and Trade (2012-2016) and a former High Commissioner to India (2009-2012). Development of the IES involved extensive consultations and a public submission process.

The IES places India at the forefront of Australia's international partnerships. The IES identifies ten key sectors as best matching Australian competitive advantages with Indian priorities, and ten key Indian states to focus on. Targets include lifting India into Australia's top three export markets and boosting outward Australian investment to India from AUD10.3 billion to over AUD100 billion by 2035.

Read the IES

During his visit to Australia in June 2018, India's then Commerce Minister Prabhu commissioned a counterpart report, the Australia Economic Strategy (AES), which we expect to be released over coming months.

Education is Australia's largest service export to India, valued at AUD5.5 billion and accounting for around 85 per cent of the total. Indian students in Australia number almost 110, 000 (year to date September 2019), which marks a 33 per cent increase over the previous year. These students made 132,079 enrolments in Australia, comprising 15 per cent of international enrolments. As an education export market, India is second only to China, with exports valued at AUD12.1 billion in 2018-19 and 246,454 enrolments in Australia.

The Australia-India Business Exchange (AIB-X) is a new, Austrade-led, Australia-India business marketing platform that will build on the success of Australian Business Week in India, last held in 2017. This multi-month campaign will include a coordinated program of activities and events. Minister Birmingham will lead a business mission to India in late February as part of AIB-X, with sectoral events and workshops to be held in five cities. This will provide an opportunity to deepen trade and investment ties, focusing on small and medium across the IES' priority sectors. Further information can be found on the Austrade website

Bilateral architecture and high-level visits

The Prime Ministers of Australia and India see each other regularly at major international meetings such as the G20 and the East Asia Summit, and often meet bilaterally in the margins of such meetings.

Australian and Indian Foreign Ministers meet annually for the Foreign Ministers' Framework Dialogue, alternately held in Australia and India. The Dialogue is an important mechanism for advancing the ambitious bilateral agenda. Australian and Indian Defence Ministers also meet regularly.

Australia–India Joint Ministerial Commission meetings provide a forum for Trade Ministers to identify opportunities and address challenges in the economic relationship. This is complemented by ministerial engagement in sector-focused working groups, including on energy and education.

People-to-people links

Australia and India are building strong and lasting ties through our people-to-people links.

The Indian diaspora (comprising both Australians of Indian origin and Indians resident in Australia) is now Australia's third largest and fastest growing diaspora. The number of people born in India amounts to 592,000, representing 2.4 per cent of the Australian population, or 1 in 50 people. Around 700,000 people claim Indian ancestry.

India remains Australia's largest source of skilled migrants and the second largest source of international students. Hinduism is our fastest growing religion and Punjabi is our fastest growing language.

The Australia-India Council is also advancing Australia's foreign and trade policy interests with India. Board members are appointed by the Australian Government to strengthen the connections between Australia and India, and provide advice to government on the opportunities and vulnerabilities in the relationship. The board recommends projects to DFAT that will create new sustainable collaborations and break down perceived barriers to engagement between our two countries.

Find the Australia-India Council on Facebook.

Last Updated: 16 January 2020