overview towards a queensland–india...economy is forecast to be the fastest growing economy...

OverviewTowards a Queensland–India

trade and investment strategyAugust 2018

2 Overview: Towards a Queensland-India trade and investment strategy

Trade and Investment Queensland (TIQ) is the Queensland Government’s dedicated global business agency. Through TIQ, the Queensland Government has one of Australia’s largest international networks of 15 trade and investment offices in 12 markets.

Our international presence promotes Queensland goods and services, and facilitates investment attraction to Queensland. Led by trade and investment commissioners, the offices are a vital connection between international investors and business opportunities in Queensland. They provide local expertise in foreign markets, facilitate business introductions, and assist inbound and outbound delegations, helping our businesses expand their international footprint.

TIQ’s India office was established in Bengaluru (formerly Bangalore) in 2004. It is complemented by the India office of Tourism and Events Queensland, located in Mumbai.

Trade and Investment Queensland office

Tourism and Events Queensland office

Mumbai

Brisbane

Bengaluru(Bangalore)

Overview: Towards a Queensland–India trade and investment strategy 3

Queensland’s future in the Asian century is bright.

Global growth is shifting east and driving strong demand for what Queensland has – safe food, abundant resources, trusted services, unmatched tourism experiences, outstanding skills and knowledge, and a secure environment in which to invest.

Last year the Queensland Government launched the Advancing Trade and Investment – Queensland Trade and Investment Strategy 2017–2022 with the aim of positioning Queensland as Australia’s most innovative and dynamic trading economy.

Now, we are focusing on building stronger ties with India through growing bilateral trade and investment. Our relationship is grounded in our shared cultural heritage as members of the Commonwealth, and the Trade and Investment Queensland office in Bengaluru demonstrates Queensland’s ongoing commitment to India.

With India already the world’s largest democracy and set to become the world’s second-largest economy, our relationship represents an enormous opportunity for Queensland to play a supporting role to this economic powerhouse.

And last year I travelled to India to investigate what this role could entail and promote India’s investment in our state.

My Government’s Advance Queensland agenda is all about positioning Queensland for the future. Because in a changing world, standing still is to fall behind.

This paper is the first step to mapping our existing strong ties with India and creating an even greater bond as we make ourselves part of India’s amazing growth story.

We have the opportunity to expand on our current agricultural trade with increased value-adding to meet the demands of India’s growing and discerning middle class.

We have the opportunity not only to grow our resource industries and help India develop its own, but also to be a part of India’s transition to renewable energy technologies.

And we have the opportunity to dramatically expand our services sector in education, health care, technology and tourism.

However, in order to build a relationship of lasting value – one that builds on the Gold Coast 2018 Commonwealth Games legacy, it cannot be one-sided or based on trade alone. Our ties with India run deeper than that.

The fact is that 49,000 people living in Queensland were born in India. That means Queensland is home to a rich Indian diaspora which forms the foundation of strong people-to-people relationships between us. These interpersonal relationships have a compounding effect and are a key enabler of investment and trade.

As we seek comment on this document over the coming weeks, I look forward to hearing your views on how we can strengthen this critical, enduring relationship.

The Queensland Government’s objective is to secure jobs and prosperity for Queenslanders, leverage existing capabilities to solve shared challenges, and embrace emerging opportunities, as we play a greater role in the great Indian growth story.

ForewordQueensland has a strong and important relationship with India and it is important that this relationship continues to deepen.

The Honourable Annastacia Palaszczuk MP Premier of Queensland Minister for Trade


Table of contents

Section Page

Invitation to participate 5

India’s growth story 6

Our relationship 16

Next steps 23


This document is the first step in a journey which will culminate in the development of a Queensland–India trade and investment strategy.

STEP ONE

STEP TWO

STEP THREE

Consultation will take place between August and September 2018.

Stakeholders from Queensland and India in both the private and public sectors will be invited to comment on this document and to be involved in the development of a Queensland–India trade and investment strategy.

The final Queensland–India trade and investment strategy will aim to articulate the best way to increase investment and trade between Queensland and India.

INVITATION TO PARTICIPATE

Next steps

To be involved, please email your submission to [email protected]

or write to Trade and Investment Queensland

PO Box 12400, Brisbane Qld 4003 Australia

See tiq.qld.gov.au for details on closing dates.

We are seeking your support to develop a Queensland–India trade and investment strategy – together we can put our best foot forward to build enduring relationships.


• Already the world’s largest democracy, India is also set to become the world’s second-largest economy and most populous nation.

• India’s size and geography have resulted in multiple regional markets, each with specific characteristics and opportunities.

• To meet the needs of its growing urban population, significant investment is planned in India to develop sustainable cities and infrastructure.

• India has a comparatively young population and its middle class is rapidly increasing, with more people moving to urban areas. Shifting demographics and associated increases in demand for health services will present opportunities to invest in health care infrastructure and establish a universal health coverage system.

• The increasing population of both India and the world will heighten the need for sustainable approaches to food and energy production.

• India’s economy is becoming more regulated, providing benefits to government, citizens and businesses.

• Nearly 30% of India’s population now has access to the internet and there are expected to be nearly two billion connected devices in India by 2020.

• India is becoming more competitive as a preferred place to do business, with a number of structural reforms planned to further improve the ease of doing business.

• There are a number of flagship government programs underpinning the economic development and reform agenda in India today, including Make in India, Digital India, Financial Inclusion, Smart Cities, Skill India, Clean India, and Startup India. These programs provide a useful foundation for trade and investment efforts between Queensland and India.

• As India grows to become one of the world’s largest economies, Queensland has an opportunity to become an active partner and form strong and enduring relationships.

India’s growth story


1. OECD GDP long-term forecast 2013–2060; Exchange Rate 1 A$ to 1 USD$: 0.7508 (as at 15 May 2018) 2. IMF Gross Domestic product per capita (current prices); Exchange Rate 1 A$ to 1 USD$: 0.7508 (as at 15 May 2018)

INDIA’S GROWTH STORY

India’s economy

Key question• How should businesses position

themselves to respond to increasing demand for goods and services?

Already the world’s largest democracy, India is also set to become the world’s second-largest economy and most populous nation.

Gross domestic product rankings and forecast 2016, 2060

Rank 2016 2060

1 China China

2 EU India

3 US US

4 India EU

Gross domestic product in real terms1 A$, trillions, 2010–2060

Indian nominal gross domestic product per capital2 A$, 2000–2023

The world is watching India as it continues on its growth trajectory to overtake China as the most populous nation. India is forecast to rise through the global gross domestic product (GDP) rankings, potentially emerging as the second-largest economy by 2050.

A nation’s economics are intrinsically linked to its population, because it contributes to both production (in terms of available workforce) and overall domestic consumption. To truly appreciate the journey that India is taking, it is important to consider the rate of change, as well as the forecast size of the country.

India’s rapidly increasing momentum will have implications and opportunities for mature economies around the world, including Queensland.

Key observations• India’s GDP is currently upwards of A$3.5 trillion, and its

economy is forecast to be the fastest growing economy through to 2050, by which time it will surpass the US and EU economies to be the world’s second-largest behind China.

• In recent years the Indian economy has not realised some of the more ambitious growth previously forecast. Nevertheless, strong future growth is still expected, with India’s economy in 2060 forecast to be nearly eight times larger than in 2017.

2060

80

40

20502010

60

20300

20

20402020

Australia

India

China

0 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

2000 2005 2010 2015 2020 2025

8 Overview: Towards a Queensland–India trade and investment strategy

3. Defined as spending between $2 and $10 per dayData sources: IMF; United Nations Department of Economic and Social Affairs, Population Division – World Population Prospects; World Bank; United Nations – World Cities Report 2016


India’s demographic trends

India has a comparatively young population and its middle class is rapidly increasing, with more people moving to urban areas.

Key question• What new trade and investment

opportunities are emerging as the demographics of India change?

Total population, millions, 2000–2060

India’s population by broad age group, millions, 2015

Proportion of Indian population in urban areas % 2000-2025

As the world’s population continues to grow, greater pressures are being placed on the world’s resources.

As India becomes a wealthier country, so too do its people; a burgeoning middle class of a comparatively young and growing population will have higher levels of disposable income to spend on goods and services not previously accessible.

The way that people live will have an impact on their consumption patterns and will drive both trade and government investment in services and infrastructure.

Key observations• India is likely to overtake China to become the world’s most

populous country in the next decade and is forecast to continue growing until it peaks in around 2060 with over two billion people.

• GDP per capita is 250% higher today than it was in 2000 and by 2022 it is forecast to be 50% higher again than it is today (2017: A$2,641).

• The Indian middle class3 represents around 50% of the country’s population. Its population is also skewed towards the young, with 53.6% of the country’s total population under 30 years’ of age.

• India has a large working-age population which, between 2010 and 2030, is expected to grow by a further 241 million people.

• One-third of India’s population currently lives in urban areas, which is expected to increase to 42.5% by 2025.

2060

2,500

1,000

500

0

2,000

1,500

204020202000 205020302010

China

Australia

India

231

9-19 20-29

4572

196

60-69

115

70+50-5940-49

152

30-390-9

250248

0

10

20

30

40

50

2000 2005 2010 2015 2020 2025


4. GSDP at current prices, exchange rate used: A$1₹= INR 50.68; 5. Based on State Budgets 2018–19 PRS Legislative Research

1

2

5 7

8

93

4

6

10


India’s key regional markets

Key question• How can India’s regional specialisations and

expertise be accessed?

India’s size and geography have resulted in multiple regional markets, each with specific characteristics and opportunities.

When considering the Indian market, its size and regional variation mean that individual opportunities are better identified and pursued on a state or union territory basis.

Key observations• India is a federal union, comprising twenty-nine states and

seven union territories. This number has changed in recent times, with three new states formed in 2000 and another created in 2014.

• Each region has unique elements, such as its reform agenda and key development initiatives, ease of doing business, new sector-specific hubs and zones, and official languages.

• In terms of state domestic product, the major states are located in central and southern regions of India.

State / Union Territory

Nominal GSDP A$ billion4 Population (m) Area (km2) Official language Specialisations and key markets5

1 Maharashtra 552 112.4 308,252 Marathi Largest cotton producer in India, and Mumbai is a national finance hub, home to the Indian stock exchange

2 Tamil Nadu 315 72.2 130,060 TamilDiversified manufacturing sector, including automotive, engineering, pharmaceuticals, and textiles. Largest number of factories and industrial workers in India

3 Gujarat 295 60.4 196,244 Gujarati Significant refining capacity, one of India’s largest producers of crude oil (onshore)

4 Uttar Pradesh 294 199.8 240,928 Hindi Largest producer of food grains in India

5 Karnataka 253 61.1 191,791 KannadaIT hub of India and home to the fourth-largest technology cluster in the world. The state also has sector-specific special economic zones for key industries (eg IT, biotechnology)

6 West Bengal 207 91.3 88,752 Bengali Largest producer of rice and fish in India

7 Andhra Pradesh 172 49.7 160,205 Telugu Brackish-water shrimps and freshwater prawns

8 Telangana 166 35.0 112,077 Telugu, Urdu Pharmaceuticals

9 Madhya Pradesh 163 72.6 22,429 Hindi Rich in natural resources (fuels, minerals) including coal

10 Delhi 135 16.8 1,483 Hindi India’s biggest milk market, and a top tourist destination

Trade and Investment Queensland’s office in Bengaluru (Bangalore)


Data sources: United Nations Department of Economic and Social Affairs, Population Division – World Urbanisation Prospects; Reserve Bank of India; Global Infrastructure Hub


Increasing infrastructure demand

To meet the needs of its growing population, significant investment is planned in India to develop sustainable cities and infrastructure.

Key question• How can we partner in designing and delivering

these large-scale infrastructure projects?

Number of Indian cities by population size Units, 2000–2020

Indian government infrastructure spending % of GDP, 2012–2017

The combination of India’s increasing population and urbanisation means that existing cities will be placed under additional stress, while at the same time new cities will emerge. Significant investment will be required to provide relevant infrastructure and services.

The demand for new, high-capacity infrastructure and services provides opportunities for domestic and international businesses to partner with India throughout design, delivery and management stages.

Key observations• The latest data from the United Nations shows that from 2015

to 2020, the number of Indian cities with more than 300,000 people will increase by 26, which includes 4 new or bigger cities with more than 1 million people.

• Recent government infrastructure initiatives include the Smart Cities Mission, which involves development of 100 smart cities by 2020, part of a larger plan to develop industrial corridors connecting big metropolitan hubs.

• Over the past five years, India has invested A$750 billion in infrastructure and has allocated A$79 billion in the 2017–18 budget. It is estimated that around A$5,722 billion of infrastructure investment will be required by 2040.

• The Delhi–Mumbai Industrial Corridor is a major infrastructure program comprising many large-scale projects (including new industrial cities), which aims to expand India’s manufacturing and services sector.

• Significant Indian transport projects include the Sagarmala Project, which provides infrastructure to transport goods to and from ports quickly and efficiently (A$237 billion), and the Bharatmala Project, which creates a road network to link India’s west-to-east land borders (A$2.8 billion).

200

212250

150

100

50

2015 20200

83

64

56

3 6

238

93

76

60

2 7

0

1

2

3

4

5 4.5%

3.5%

2012

3.5%

4.4%

3.5%3.4%

2014 20152013 2016 2017

StateCentral

10 million+ 1–5 million 300,000–500,000 5–10 million 500,000–1 million


Data sources: Indian Food Security Portal, 2030 Food Demand and Supply Projections; World Bank database; Food and Agricultural Organization of the UN; India’s CIPHET


Sustainability for the future

The increasing population of both India and the world will heighten the need for sustainable approaches to food production and energy production.

Key questions• How can Queensland help India to create a

more efficient agriculture sector through the sharing of agtech and specialist services?

• Given Queensland’s sophisticated supply chains and export capabilities, how can we encourage storage and distribution innovation in India?

Indian food demand, tonnes Millions, 2010–2030

Cereal and rice yield, kg/hectare Thousands, 2016

India’s wastage of agricultural produce 2013

Commodity / crop Total loss (%) Value loss value (in Rs. crore)

Milk 0.9% 4,409

Meat 2.7% 1,235

Marine fish 10.5% 4,315

Inland fish 5.2% 3,766

Egg 7.2% 1,320

Poultry meat 6.7% 3,942

Cereals 4.7% – 6.0% 20,698

Pulses 6.4% – 8.4% 3,877

Oilseeds 3.1% – 10.0% 8,278

Fruits and vegetables 4.6% – 15.9% 40,811

As the world’s population continues to grow, greater pressures are being placed on the world’s resources.

Apart from the obvious issues of depleting finite natural resources, there are also challenges relating to non-finite resources, such as food, demand for which is forecast to rise by at least 20% over the next 15 years.

Sustainability is not just about finding greener, renewable sources of energy and other consumables, but also about improving agricultural performance. This includes upgrading infrastructure and supply chains, and improving processes to gain efficiencies, improve yield and reduce waste.

Key observations• As India’s population and wealth grows, food demand will

will increase – compared to 2010 levels, the demand in 2030 for food grains and vegetables is forecast to increase by 31% and 55% respectively.

• Increasing food demand creates ongoing challenges in India, where yield rates lag behind other countries and the world average – Indian yields are less than half of those of the USA and China.

• These challenges can be attributed to capacity constraints in the rural transport networks, variable awareness about crop treatment, limited access to new farming technologies, and dependence on rainfall from an irregular monsoon.

0 50

100 150 200 250 300 350

2010 2020 2030

Vegetables

Food grains

6

4

2

10

0

8

China World IndiaJapanUSA

RiceCereal


Data sources: Indian Food Security Portal, 2030 Food Demand and Supply Projections; World Bank database; Food and Agricultural Organization of the UN; India’s CIPHET


Increased regulation of the Indian economy

India’s economy is becoming more regulated, providing benefits to government, citizens and businesses.

Key question• How do recent and proposed changes to the

Indian economy impact our relationship and future opportunities?

Gross tax revenue per capita A$, 2012–2018 (F = forecast)

Volume of electronic payments Millions, 2016–2017

Value of electronic payments A$, trillions, 2016–2017

Like many developing economies, India has long maintained a large informal sector, which poses challenges for international investment and trade.

The Indian Government has taken recent steps to increase regulation and digitise the economy. This presents benefits to government, Indian citizens (through increased public spending) and established businesses, which can leverage and depend on more efficient regulations, systems and supply chains.

Key observations• Gross tax revenue in India has been steadily increasing

and has grown by 12% per annum since 2012. Increases in tax revenues are partly due to recent initiatives of the Indian government to encourage greater participation in tax systems.

• A new goods and services tax (GST) was introduced in July 2017, which will further add to taxation revenues by extending the tax base. The GST allows the free movement of goods and services between states, and significantly reduces ‘red tape’ and other costs for businesses.

• Following demonetisation of Rs 500 and 1,000 banknotes (which led to the withdrawal of 86% of all bank notes from circulation), the government announced a number of measures to encourage digital transactions, including zero transaction fees on digital payments and no service taxes on digital transactions of values up to Rs 2,000.

• In the year following demonetisation, digital transactions in India have increased both in terms of volume (up 49%) and value (up 29%).

+12%217

187

20152012 2018F2017

252

2014

173

2016

278

2013

159138

671.5

998.5

Nov-16 Nov-17

+49%

+29%2.39

Nov-16 Nov-17

1.85

India’s economy is becoming more regulated, providing benefits to government, citizens and businesses


Data sources: World Bank database; Deloitte TMT India Predictions 2017; McKinsey Global Institute – India’s Ascent; StatCounter Global Stats


Technology usage

Key questions• In what ways can we use technology and

digital channels to better engage Indian customers?

• Which technology-enabled products and services will be in high demand as more of India’s growing population gains access to smart devices and the internet?

People with access to the internet in India % population, 2007–2016

Mobile device subscriptions in India Units, billions, 2007–2016

Connected devices in India Units, billions, 2017–2020

Access to the internet significantly improves information and communication flows and enables ecommerce opportunities.

This in turn allows consumers to access new products and services. At the same time, enterprises have greater reach and new digital channels, both domestically and also in terms of inbound and outbound international markets.

Key observations• The number of Indians with access to the internet has

increased dramatically over the last 10 years, from less than 5% of the population in 2007 to almost 30% in 2016.

• This figure is expected to continue growing, with the McKinsey Global Institute estimating that by 2025 there will be 700–900 million smartphone users with mobile internet access.

• Internet access is heavily skewed towards mobile use – in 2016 Indians accessed the internet through their mobiles nearly 80% of the time. The number of mobile devices in India is also rapidly growing.

• India is on the verge of a digital revolution, which presents many opportunities in financial services and IT services (eg digital health solutions that can impact reach and delivery of rural health care). These opportunities are further supported by government initiatives including Startup India and Digital India.

Nearly 30% of India’s population now has access to the internet and there are expected to be nearly two billion connected devices in India by 2020.

0

5

10

15

20

25

30

20162010 20132007

0.0

0.2

1.0

0.4

1.2

0.8

0.6

20132007 20162010

0.6

1.9

20202017


Data sources: World Bank, Confederation of Indian Industry


Ease of doing business

Key questions• What are the challenges of doing business in

Queensland and India?

• How can we better appreciate our cultural differences and similarities with a view to forming enduring relationships?

India ease of doing business Rankings, 2012–2017

India business confidence Index, 2012–2017

To be successful, we should understand the differences between Queensland and Indian cultures and learn how to navigate the relationship-based business environment.

Key observations• Indian business is strongly relationship-based, preferencing

businesses that have an established local presence and network. Partnering is often the recommended option for foreign businesses entering the Indian market as partners can provide invaluable knowledge and existing relationships.

• Recent reforms have significantly improved India’s global ranking in terms of ease of doing business.

• The changes include structural reforms related to starting a business, obtaining credit, taxation, trading across state borders, enforcing contracts and resolving insolvency.

• The government is looking to implement additional reforms to further improve its ranking, including simpler registration of firms, better enforcement of contracts and improved processes for opening bank accounts.

• Since May 2014 the Indian government has taken many positive steps to implement its pro-business and pro-investment agenda and has announced to the world that India is open for business.

India is becoming more competitive as a preferred place to do business, with a number of structural reforms planned to further improve the ease of doing business.

131 134 134 131 130

100

20172015 20162012 20142013

49.954.8 56.2 53.9 56.5 58.3

2014 20172015 201620132012


Data sources: The World Bank Database; PWC – The World in 2050; KPMG analysis


Supporting India’s growth story

Even by today’s measures, India is a significant economic power that dwarfs not only Queensland, but Australia as a whole. This imbalance will become even more pronounced as India continues on its growth journey. By 2050 it is expected to have an economy which is almost 60 times the size of Queensland.

While India is a growing nation, growth is largely focused on domestic consumption, with limited participation in global exports (with the exception of services exports) when compared to other developing economies.

Like all growing nations, India needs to consider energy security, food security, health care, education and future infrastructure. While hungry for all of these and more, India is also a nation with a large workforce and the potential for self-sufficiency by adopting smarter processes and technologies.

The next period of growth for India will not be without challenges. However, challenges come with opportunities, and Queensland is well-placed to be an active partner with India in supporting mutual growth through building on our existing strong relationship.

Prioritising shared challenges faced by both India and Queensland is one way to provide a focus that will result in rapid innovation that benefits both partners, and bolsters the relationship that exists today.

As India grows to become one of the world’s largest economies, Queensland has an opportunity to become an active partner and form strong and enduring relationships

INDIA AUSTRALIA QUEENSLAND

People

GDP

GDP Growth= 1%

= US$250b

= 25m


• Queensland and India share a cultural heritage as members of the Commonwealth and have a rich history of our people sharing experiences, ideas and expertise.

• The trade relationship between Queensland and India is strong and growing.

• The ties between Queensland and India are stronger than just trade and investment. Queensland is home to a rich Indian diaspora – 49,000 Queensland residents were born in India. This represents strong community-based relationships with India.

• This relationship already supports significant economic development and investment in infrastructure in Queensland and supports employment in numerous fields throughout the state.

• India hosts our Trade and Investment Queensland office in Bengaluru (Bangalore). Likewise, Queensland is host to an Honorary Consul for India in Brisbane, as well as an active branch of the Australia India Business Council.

• Given the potential to deepen this relationship, Queensland is seeking to build stronger ties with India.

Our relationship


Data sources: ABS Census 2016 QuickStats; High Commission of India (Canberra)

OUR RELATIONSHIP

Our people – Queensland’s Indian diaspora

The United Nations’ estimates that, in 2017, there were 16.6 million Indians living abroad. While the growing number of Queensland residents born in India demonstrates a quantifiable link, there are also rich cultural connections of the Indian diaspora that sit behind the numbers.

Queensland’s community of Indian-born residents contributes to the state’s celebrated multicultural society.

Key observations• Queensland is home to more than 10% of Australia’s growing

Indian-born population. The diaspora is an active part of Queensland society and maintains links with India.

• Queensland’s urban centres attract the largest number of Indian residents; the greater Brisbane area is home to 35,335, or 72% of the state’s total.

Queensland is home to a large and diverse Indian diaspora – 49,000 residents of Queensland were born in India. This supports strong community-based relationships.

Case studyQueensland–India Women’s Business Advisory Circle

Trade and Investment Queensland has created the Queensland–India Women’s Business Advisory Circle, a network for businesswomen in Queensland and India to support each other in doing business.

Made up of business influencers, existing and new exporters, as well as facilitators such as Trade and Investment Queensland and Austrade, this advisory circle is primarily a LinkedIn group where members can interact, seek and share advice, discuss export issues and share success stories.

Queensland is home to a large and diverse Indian community, with at least 27 Indian associations:

• Arya Pratinidhi Sabha of Brisbane

• Australia–India Business Council

• Australia–India Cultural & Business Society

• Australian Folklore Association

• Bengali Society of Queensland

• Bihar Jharkhand Sabha of Australia & NZ

• Brisbane Tamil Association Inc

• Club De Goa

• Federation of Indian Communities of Queensland

• Global Organisation for Indian Family & Youth – Brisbane

• Global Organisation of People of Indian Origin

• Gujarati Association of Queensland

• Hindu Mandir Association Queensland

• Hindu Society of Queensland

• Hindustani Language School

• India Australia Society

• Jvala Charitable & Cultural Society Inc

• Kashmiri Pandits Australia Inc

• Kshatriya Society of Brisbane

• Malayalee Association of Queensland Inc

• Marathi Association of Queensland

• Punjabi Cultural Association Queensland

• Queensland Telugu Association

• Shree Sanatan Dharam (H) Association Queensland

• Tamil Association of Queensland

• The Odia Community of Australia

• VHP (Vishva Hindu Parishad) of Australia Inc

Estimated resident population of Queensland (born in India) Thousands, 2006–2016

2015

2010

2014

2012

2730

20133537

2011

4044

2016 49

20082009

2006 13

21172007

25

Note: Not all organisations listed above will be actively approached for consultation; stakeholders (including those above) are invited to make submissions in relation to this document. Further details on page 5.


OUR RELATIONSHIP

Our people – skilled visas and remittance to India

Key questions• How can our relationships help us to do

business in Queensland and India?

• How can we ensure our existing relationships will benefit us into the future?

• What would help us to develop new relationships in key sectors into the future?

Skilled migration to Queensland Visa holders, 2010–2017

Year Total inbound Origin: India

2017 20,480 3,353

2016 23,208 4,409

2015 27,316 5,488

2014 30,850 5,691

2013 31,265 4,578

2012 27,774 2,738

2011 22,441 1,670

2010 50,455 1,603

Estimated remittance from Queensland to India A$, millions 2010–2016

Interpersonal relationships are a key enabler of trade in both goods and services. In order to understand fully the economic relationship between Queensland and India, it is important to understand the relationships between its people.

The data and commentary on this page provide a snapshot of Indian migrants who are residing in Queensland and Australia, including those who hold temporary skilled working visas.

As well as permanent migration, there is also temporary people movement between India and Queensland in the form of tourism and education.

The movement of people is just the starting point for linkages between India and Queensland.

Key observations• Foreign direct investment and trade in goods and services

follow interpersonal relationships; strong and enduring relationships have a compounding effect on total trade.

• The estimated remittance from Queensland to India increased by more than 17% per annum from 2010 to 2016.

• A consistent share of skilled migration to Queensland comes from India, mainly within the hospitality sector. Café / restaurant owners and chefs / cooks represented 39% of all primary visa holders in Queensland in 2017.

• ICT occupations represented 20% of all primary visa holders in Queensland in 2017.

The trade and investment ties between Queensland and India start with people.

0

100

200

300

2010 2011 2012 2013 2014 2015 2016

Data sources: ABS 34120DO009_201516; ABS Census 2016 QuickStats; World Bank; DFAT Visa Data; KPMG analysis


OUR RELATIONSHIP

Bilateral goods trade

Key questions• How can we continue to grow our goods trade?

• What is required in order to move towards more value-added goods trade?

Queensland merchandise trade with India by category A$, billions, 2012–13 to 2016–17

Queensland merchandise trade with India by category A$, millions, 2016–17

Trade category Exports to India

Imports from India

Food and live animals 938 28

Chickpeas 8736 –

Beverages and tobacco 0 0

Crude materials, inedible, except fuels 234 13

Mineral fuels, lubricants and related materials 6,234 20

Bituminous coal 6,233 –

Animal and vegetable oils, fats and waxes 0 2

Chemicals and related products, nes 8 128

Manufactured goods classified chiefly by material 4 180

Machinery and transport equipment 11 196

Miscellaneous manufactured articles 5 171

Commodities and transactions not classified elsewhere in the SITC 1,817 21

TOTAL 9,251 758

Bilateral trade of goods is perhaps the most fundamental measure of interaction between two regions, and often creates economic dependencies with ongoing political implications.

Analysis of the trade relationship of India and Queensland can be used as the basis for expanding the existing economic ties and moving into adjacent sectors and regions or further up the value chain.

Key observations• The trade relationship is characterised by exports from

Queensland to India, with limited growth in goods imported into Queensland from India.

• Around 67% of Queensland exports to India are coal and related goods. Queensland exports around 71% of Australia’s total exports to India in this category.

• The second-largest export category to India is fruit and vegetables, with Queensland exporting around 57% of Australia’s total exports to India in this category.

The goods trade relationship between Queensland and India is strong and growing.

7

10

9

8

1

0

5

3

6

4

2

2015-16

Imports

2016-172013-14

Exports

2014-15

6: Representing 64.2% of Queensland’s total chickpea exports (A$1359.7M). In 2017-18, Queensland total chickpea exports fell by 51.6% to A$658.3M. Data source: ABS 5368.0


OUR RELATIONSHIP

Bilateral services trade

Key questions• What are the key sectors we should focus on

in order to increase services trade?

• What can be done to encourage new relationships that can improve services trade?

Australian services trade with India A$, billions, 2012–13 to 2016–17

Australian services trade with India by category A$, millions, 2016–17

Trade category Exports to India

Imports from India

Transport 37 28

Travel (including education-related) 3,854 –

Insurance and pension services 6 0

Financial services 48 13

Telecommunications, computer and information services 47 20

Personal, cultural and recreational services 19 –

Other 76 2

Total 4,087 128

Trade in services is a hallmark of the knowledge economy, and is often more heavily dependent on interpersonal relationships compared to trade in goods.

This section looks at Australia’s services exports on a balance of payments (BOP) basis, to understand the linkages between Australia and India. Note that BOP data is not available at the Queensland level.

Key observations• Services trade is also characterised by exports, with limited

growth in imports from India.

• The majority of bilateral trade in services is from travel-related services, which includes all goods and services acquired for personal use by travellers (including Indian students).

• The second-largest category for import services from India is telecommunications, computer and information services, driven by outsourcing by Australian businesses.

The services trade relationship between Australia and India is less significant than the goods trade, but has the same characteristics of Australia exporting more than it imports from India.

4.0

1.5

1.0

4.5

3.5

2.5

3.0

2.0

0.0

0.5

2016-17

Imports

Exports

2015-162013-14 2014-15

Data sources: ABS 5368.0; ABS 5368.0.55.003; DFAT Trade in Services Australia

Case studyQueensland Skills and Education Consortium

The Queensland Skills and Education Consortium (QSEC) is delivering high-quality industry-focused skills programs in India to foster employment. Its partners include TAFE Queensland, Griffith University, Australian Retail College, Intech Institute of Technology and FoodCoach Institute. Since its establishment in 2016, QSEC has signed training delivery agreements with several Indian states and organisations, including Kerala, Chhattisgarh and Jharkhand and the Skills Council for Mining Sector.


OUR RELATIONSHIP

Bilateral investment

Key questions• What can we do to grow our bilateral

investment relationship?

• How can Queensland position itself as an attractive investment destination?

Australia–India FDI relationship A$, billions, 2012–2016

Australia–India FDI relationship A$, millions, 2012–2016

Category 2012 2013 2014 2015 2016

Indi

an F

DI in

Au

stra

lia

$m 1,337 1,161 955 897 886

% of total Indian outbound FDI 1.18% 0.93% 0.65% 0.48% 0.46%

% of total Australian inbound FDI 0.23% 0.18% 0.14% 0.12% 0.11%

Aust

ralia

n FD

I in

Indi

a

$m 1,265 1,318 1,530 1,610 1,759

% of total Australian outbound FDI 0.28% 0.26% 0.28% 0.30% 0.32%

% of total Indian inbound FDI 0.58% 0.56% 0.52% 0.43% 0.41%

Foreign direct investment (FDI) is an investment made by a company or individual in another country, in the form of either establishing business operations or acquiring assets.

FDI usually involves more than just capital outlay, and commonly includes the provision of management services. As such, this investment relationship represents more than just the flow of capital; it often centers around the exchange of mutually beneficial ideas and expertise.

Key observations• The relationship is one of Australian FDI into India, with a

lesser and diminishing FDI flow from India.

• India has become an increasingly popular destination for Australian FDI (both in terms of absolute investment and share of total outbound FDI).

• Although the reported FDI from India into Australia is dropping, there is an ongoing wave of Indian companies expanding operations into Australia, including newly launched Ola Cabs.

• However, Australian FDI represents a decreasing component of India’s total inbound FDI, as the nation secures growing amounts of FDI from other sources.

Australian investment in India is at a record high; however, there is an imbalance between this and Indian investment coming into Australia.

Data sources: ABS 53520; OECD Database, IMF Database; KPMG Analysis

2012 2013 2014 2015 2016

1.6

0.2

0.6

1.8

0.4

1.0

1.4

0.8

1.2

0.0

India FDI to Australia

Australia FDI to India


OUR RELATIONSHIP

Queensland’s strengths and our shared challenges

As noted in the Advancing Trade and Investment – Queensland Trade and Investment Strategy 2017–2022 (the Strategy), Queensland possesses many natural and acquired competitive strengths (reliable and efficient infrastructure, natural resources, cost of doing business, existing global presence), all of which have supported the growth of its major export industries – mining, food and agribusiness, tourism, and international education and training. These industries form a strong foundation for future growth, and provide a starting point from which value-added opportunities can be identified.

Queensland is becoming the place to develop and invest in emerging industries such as robotics, drones, artificial intelligence, data and computing, renewable energy, clean technology and emerging science. Further investments are attracting international entrepreneurs and start-ups to Queensland, promoting collaboration between researchers and businesses and growing innovation networks within our regions and international hotspots.

Shared challenges will provide Queensland and India with a platform for stronger collaboration and co-investment. Facing the uncertainties of the future is always easier with the support of others. By working together to overcome challenges, such as food security and sustainability, Queensland and India can help each other.

Our shared challengesWhile there are certain challenges that are unique to countries and regions, there are also shared and universal challenges. It makes sense to approach these issues together, so we can benefit from sharing resources and expertise. Some of the challenges facing both India and Queensland include:

• How we limit our reliance on natural resources, and find cleaner and renewable ways to meet our energy needs.

• How we continue to feed a growing population in a way that is efficient and sustainable in the long term.

• How we prepare for changing demographics and the associated increase in demand for health services.

• How we overcome health challenges and diseases specific to tropical and subtropical climates.

• How we prepare for the impact of disruptive technologies and their impact on future employment.

• How we ensure that our people have the right skills and training to succeed.

It is important that we focus our efforts and provide targeted support to leverage existing capabilities and help solve shared challenges.

Mining and METS• Major industry in

Queensland, contributing A$21.6 billion in 2015–16.

• Strong comparative advantages in mining; one of the world’s largest exporters of seaborne coal.

• Home to 800 mining and mining equipment, technology and services (METS) companies, with METS employing more people than mining directly.

Tourism• World-class tourism

attractions and experiences (including five World Heritage areas), welcome over 24 million domestic and international visitors annually. Tourism generates A$57.9 million per day in overnight visitor expenditure across Queensland.

• Well connected to Asia growth markets.

• Major event capabilities (eg hosting the Gold Coast 2018 Commonwealth Games).

• Queensland’s third-largest export, behind coal and food.

Food and agribusiness • 83% of Queensland is

dedicated to agribusiness.

• Strong comparative advantages in the production of beef, fish and crustaceans, chickpeas, cotton, sugar cane and sorghum.

• Innovative agtech and related services, including robotics, bio-products, packaging materials, and digital wireless technologies.

International education and training• Destination of choice, due

to safe communities and its enviable lifestyle, weather and locations.

• Proximity to Asian growth markets and offers affordable living for students and their families.

• Strong regional dispersion, with significant education exports outside of Brisbane.

Queensland’s strengths


We are seeking your support to help develop a Queensland–India trade and investment strategy that articulates the best way to increase investment and trade.

Consultation will take place between August and September 2018. As part of this consultation, we will be asking key stakeholders in Queensland and India the following questions:

• What do you view as the strengths of the Queensland–India relationship?

• What are the key opportunities moving into the future?

• What would enhance our trade and investment relationship?

Additional questions for stakeholder consideration are highlighted throughout this paper.

Together we can put our best foot forward and continue to build enduring relationships with India.

Next steps

Front and back cover images (left to right): Gold Coast coastline

Indian diaspora benefiting from international education services

Vidhan Soudha, Bengaluru (Bangalore)

QIMR Berghofer Medical Research Institute

Gold Coast

Indian diaspora benefiting from international education services

overview towards a queensland–india...economy is forecast to be the fastest growing economy...

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