Traditionally exporting a large volume of foodgrain to India, Australian agricultural majors like GrainCorp are increasingly looking to set up processing units in the country.
This followed Australia's push to make India a global hub for grain processing, an Australian diplomat told Business Standard.
“This would be beneficial to the operations of Australian companies that are exporting a significant amount of foodgrain to India," said Leonie Muldoon, senior trade and investment commissioner for South Asia.
India is a large market for Australian farm produce. The country sent over more than $921 million worth of chickpeas and pulses and $525.38 million worth of wheat in 2016-17. These imports have witnessed a steady rise over four years and companies such as GrainCorp and Olam Australia are looking to scale up business in India and nearby markets.
“We are focusing on taking advantage of the food processing ministry’s SAMPADA scheme, which incorporates ongoing government work in areas such as mega food parks, integrated cold chains and value-addition infrastructure,” an executive at one of these companies said.
Australia exported $11.15 billion worth of goods to India in 2016-17 while importing only $2.96 billion of merchandise. The trade deficit is principally due to Australian coal and natural gas exports worth over $7 billion.
Also, $350 million of copper ore was imported in the last financial year. High-value ores of zirconium and uranium are expected to inflate this bill in the current financial year. Indian mining companies were interested in sourcing mining equipment and safety apparatus from Australia, Muldoon said. These included diesel-powered vehicles for underground operations, dust-suppressing gas masks and machines to provide stabilisation during tunnelling, she added.
An Australian business delegation representing over 70 companies in food processing, mining, renewable energy, infrastructure and education is visiting India.
The second Australia Business Week in India arranged by the Australian Trade and Investment Commission is being attended by Keith Pitt, Australia’s assistant minister for trade, tourism and investment, Luke Hartsuyker, assistant minister to the deputy Prime Minister of Australia, and Karen Andrews, assistant minister for vocational education and skills.
The ministerial visits may help in furthering trade talks. Talks on a proposed free trade agreement have faltered after New Delhi refused to budge on reducing farm tariffs while Canberra is wary of greater market access.
"Australia is pushing for tariff reductions in dairy, fresh fruit, pharmaceuticals, meat and wines. India wants zero duty on automobile parts, textiles and fresh fruit, including mangoes, and greater access in the services sector," an official said.
The countries have missed the January 2016 deadline to finish talks set by Prime Minister Narendra Modi and Australia's then Prime Minister Tony Abbott in September 2014.