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Austrade
Official's Advice
to Exporters
Patience &
More Patience
Pays in the Long
Run
Mike Moingard
talks about his
experience as
Austrade's Senior
Trade Commissioner
for South Asia
- an ideal vantage
point to witness
the rapid transformation
of India's economy.
Excerpts.
When I first came
to India 10 years
ago I could never
have predicted
the staggering
growth that has
since occurred.
Returning in 2004,
it was obvious
that the economy
was growing well.
It was not known,
however, whether
or not that growth
was sustainable.
There were many
challenges to
the economy at
the time. Some
still exist. Infrastructure
development was
one of the biggest
challenges. Although
this problem is
being addressed,
it is fair to
say that construction
is not proceeding
fast enough. By
the time a new
road is opened
it is already
overflowing.
But processes
are improving.
Many regulations
which hindered
property and industrial
development have
disappeared. The
opening up of
sectors such as
in commercial
aviation, telecommunications
and IT has helped
India's economic
growth become
more sustainable.
Remember that
India had to build
broadband, airports
and roads from
scratch issues
that have been
high on the agendas
of successive
governments. Yet
one is constantly
reminded that
India is still
a developing country.
I once slept in
a hotel room with
the light on all
night because
I could not find
the switch. It
was there all
right, as I discovered
in the morning
but in the hallway
outside!
What is driving
the growth?
Around 80 percent
of economic growth
in India has traditionally
been driven by
internal factors.
More recently,
pressure from
external forces
has begun to influence
the economy. Components
of India's GDP
reveal that the
biggest sectors
showing growth
are in services,
followed by manufacturing
and agriculture.
Development of
services is not
only driven by
international
business, such
as IT, but also
necessities for
the economy as
a whole, including
financial services
and telecommunications.
The manufacturing
sector has traditionally
been focused on
the local economy
and has only recently
begun to expand.
Over 75 percent
of Australia's
exports into India
are commodities,
including industrial
inputs for manufacturing
such as steel
and aluminium.
The downside of
a stronger $A
has added to the
cost of our products.
However, this
assists export
of services from
India to Australia
as it costs less
to do so.
Certainly positive
perceptions of
Australia have
increased in South
Asia in recent
years. Apart from
just being seen
as a cricketing
country, Australia
has increased
its profile as
a source of education.
More Indian companies
are looking to
invest in Australia
and tourism to
Australia is on
the increase.
What is Austrade
doing?
Our 'Doing Business
with Australia'
seminars have
been very effective
in sending positive
messages about
Australia to India's
second-tier cities.
We are succeeding
more than most
embassies or trade
commissions in
getting the face
of Australia to
be appreciated
out there.
Austrade is spreading
out from the big
five or six cities
such as Mumbai,
Delhi and Chennai,
and moving into
places like Coimbatore
places which people
locate only on
maps. Many of
these smaller
cities have populations
of four or five
million, with
a strong regional
emphasis in diverse
sectors such as
education and
manufacturing.
What are the challenges
for exporters?
Two big issues
for exporters
to India are commitment
and patience.
A third is still
more patience.
When we present
India to Australian
investors and
exporters, we
are selling a
long-term proposition.
The Indian market
is not one to
provide short-term
results. Companies
must be aware
they are there
for the long haul
and do their research
well. Efforts
we have made in
the retail sector,
including creating
franchising opportunities,
are now beginning
to show results.
The market is
ready for franchise
operations, a
future growth
area.
A number of other
sectors offer
big opportunities
and will continue
to do so over
the next few years,
notably: industries
involving climate
change from clean
coal to renewable
energy energy-efficient
buildings and
building materials,
and many services
relating to these
technologies.
There is a growing
consciousness
in India of the
need for new 'green'
technology and
the services around
them that Australia
can offer. Good
examples of this
are Australia's
internationally
recognised expertise
in advanced solar
energy production
and wind power
generation.
India is a great
place in which
to work and live
We have a fantastic
staff here, and
I have made many
friends that I
will miss when
I leave. The Austrade
team in South
Asia, including
Sri Lanka, Bangladesh
and Pakistan,
is equal to any
in the world.
Their commitment,
passion and enthusiasm
have helped build
a sustainable
business model
suited to the
market and, as
a result, they
are achieving
outstanding results.
It has been a
great pleasure
working with them;
sharing with them
the warmth and
hospitality of
an amazing country:
India.
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