Why India

India is the world’s fourth largest economy and continues to grow rapidly. With real GDP expected to grow at around six and a half per cent annually, to 2030 India could overtake Germany and Japan to become the world’s third largest economy by 2027. India’s economic success has been driven in part by its ICT and digital economy sectors. It is home to a growing manufacturing sector that is becoming increasingly important to domestic growth and global trade. Growth has also been driven by a young population, a growing middle class and domestic consumption, improvements in infrastructure, and capital inflows and policy support.

FDI inflows into the country have also increased as the business and investment climate has improved and FDI regulations have become more favourable.

In the past decade, India has implemented a range of economic reforms to support its manufacturing sector and its economy more broadly. Chief among these is Make in India, a collaborative effort among several government agencies to create a more business-friendly environment and boost foreign investment.

Other initiatives include the Production Linked Incentive Schemes designed to boost manufacturing and jobs, implementation of a goods and services tax, and Digital India, which is a program to grow India’s digital economy. The Indian Government is also making efforts to attract advanced manufacturing as many companies contemplate diversifying from China. As India aims to diversify its economy and become a major hub for global supply chains, more opportunities for foreign enterprises will emerge.

Australia and India have strong political, economic and people-to-people links, with growing security ties. India is Australia’s fifth largest trading partner, with two-way trade totalling AUD 50 billion in year 2023- 24. Economic ties between the two countries are supported by the 2022 Australia - India Economic Cooperation and Trade Agreement (ECTA), by which 90 per cent of Australian goods will enter India tariff free by 1 January 2026 and the the New Roadmap for Australia’s Economic Engagement with India. The document outlines how Australia plans to deepen and diversify its economic partnership with India—focusing on clean energy, education & skills, agribusiness, tourism, technology and investment—to seize growth opportunities in India’s expanding economy. A range of other agreements and partnerships provide Australian businesses with favourable market access conditions.

The Australian Government’s “New Roadmap for Australia’s Economic Engagement with India”, launched in 2025, sets out a pathway and key areas of opportunity for deepening Australia’s economic integration with India. The Roadmap builds on the 2018 India Economic Strategy to 2035. More information on the bilateral relationship is available in Section 5.1 and from the Department of Foreign Affairs and Trade’s India Country Brief.

Comparing key indicators: India and Australia

India is one of the fastest-growing economies in the world, forecast to expand, on average, 6.5 per cent annually between 2024 and 2030.

It has a thriving digital ecosystem and an increasing openness to foreign investment. Rising household incomes are seeing demand for luxury and high-end products and services grow faster than demand for basic goods. The government is also investing heavily in infrastructure through its National Infrastructure Pipeline program. All of this creates opportunities for Australian businesses.

Despite India’s ongoing economic modernisation and growth, risks remain. India’s agriculture sector, which accounts for 44 per cent of all employment and 18 per cent of GDP remains vulnerable to extreme weather events which are expected to increase due to climate change. India also needs to create jobs for its rapidly growing population and invest in upskilling its workforce as it looks to move up the manufacturing value chain, while also improving infrastructure.

Figure 1: Real GDP Growth – India and world average (2016 – 2026f), %

India’s large and rapidly growing economy offers numerous prospects for Australian businesses, particularly in India’s priority sectors. This section provides a short overview of prospective sectors.

Education

India’s focus on education reform and skill development provides a growing opportunity for Australian educational institutions. Recent changes to government regulations that allow foreign universities to establish and operate campuses in the country enhance these opportunities. Australia's Deakin University was the first foreign university to establish a branch in India following this change. With a young population and increasing demand for quality education, India is a significant market for Australian educational service providers. Indian Government initiatives to improve educational infrastructure and accessibility such as the National Education Policy (NEP 2020), promote interdisciplinary learning, flexibility in curricula, and internationalisation of education, make future growth likely. India aims to advance educational attainment at all levels, improve its academic research capabilities, provide further development for educators and fully integrate technology into classrooms. Austrade has identified opportunities in vocational education and training and higher education.

Food and agribusiness

Agriculture is a key sector in the Indian economy but it faces inefficiencies and poor productivity. The sector could contribute as much as AUD 914 billion by 2030 if productivity is improved. The government is investing in infrastructure to modernise the food supply chain, and the country is ripe for investment in cold chain logistics, the absence of which results in significant food waste each year and large swings in food prices. Agtech is playing an instrumental role in improving productivity and sustainability. India had 1300+ agtech startups in the six years to 2024 and its agtech opportunity is valued at AUD 36 billion, with a current market penetration rate of 1.5 per cent, highlighting the scale of the opportunity. India’s food consumption is also expected to rise significantly over the coming decades. In addition to population and income growth increasing demand, diets are changing with the adoption of meals that include more fruit, vegetables and dairy. Australian exporters can capitalise on these trends by helping India meet its growing demand for food and expand its processing capacity. Austrade has identified grains, pulses and feed, horticulture, meat and livestock, packaged foods and wine and beverages as key market opportunities.

Health and medical

India’s healthcare sector is rapidly expanding, driven by a growing population, rising income levels and greater health awareness. The government is prioritising the improvement of healthcare infrastructure and services through various initiatives and aims to provide universal healthcare by 2030. COVID-19 also accelerated India’s capacity to offer digital healthcare services. Australian businesses have an opportunity to capitalise on these trends by consulting on digital service provision, providing training, developing health delivery systems, and exporting medical devices and complementary medicines. India also faces a shortage of medical professionals, creating an opportunity for Australian businesses to improve access to specialist care through digital health services. Austrade has identified opportunities in biotech, health services and digital health.

Green economy

India committed to meeting 50 per cent of its energy needs through renewable sources by 2030 and achieved this target five years early in July, 2025. The government is investing heavily in renewable energy, energy efficiency and green technologies. Initiatives such as the National Solar Mission, which promotes the adoption of solar power, aim to increase foreign investment in the sector. India is also ramping up efforts to become a hub for the production, use and export of green hydrogen as it looks to decarbonise. It has established financial incentives worth AUD 3.2 billion through to 2029-30 for the manufacture of electrolysers and the production of green hydrogen. Austrade has identified an opportunity for Australian businesses to export renewable energy solutions. There is also an opportunity to develop transmission infrastructure and energy storage capacity as India scales up its renewable energy generation.

Infrastructure, transportation and cities

India is urbanising rapidly and its urban population is expected to increase from 377 million in 2011 to about 750 million in 2030. Infrastructure development presents significant opportunities for Australian businesses. The government is prioritising infrastructure upgrades through various initiatives that support municipal proposals centred around community, sustainability, innovation and technology. India is also implementing a federally coordinated plan to improve its road infrastructure through a project that plans to deliver over 34,800km of roads around the country. The government is also investing in airport infrastructure to meet demand for regional and international travel. Austrade has identified opportunities for Australian businesses to invest in airport solutions, sustainable building solutions and roads, rail, ports and logistics.

Technology

India’s thriving and globally competitive technology sector is driven by an innovative ICT sector and startup ecosystem. Well-established, targeted government policies such as Digital India and Startup India provide a further boost. India and Australia signed the Australia-India Framework Arrangement on Cyber and Cyber-Enabled Critical Technology Cooperation in 2020 to support the development of cybersecurity and e-commerce solutions. This collaboration aims to grow cyber and critical technology expertise across India and Australia, and provide grants for programs that prioritise critical technology standards, ethics and applications. There are favourable conditions for Australian businesses looking to enter the sector. The International Space Investment India Projects grant also provides opportunities for Australian companies in India’s emerging space technology sector. Austrade has identified opportunities for Australian businesses in critical technology, cyber security, digital games, fintech, proptech and software as a service (SaaS).

Professional and financial services

Driven by digital innovation and regulatory reforms, India’s professional and financial services sectors offer opportunities for Australian businesses. A variety of government initiatives are helping to foster a pro-business environment. The establishment of the International Financial Services Centres Authority (IFSCA) in Gujarat marks an important step in India’s integration into the global financial system and the maturation of the country’s capital markets. Developments such as the Unified Payments Interface (UPI) have revolutionised digital transactions and banking.

India ranks among the countries with the highest number of digital transactions annually. There are many opportunities for Australian businesses to offer advanced payment solutions, digital banking services and blockchain technologies to streamline financial operations. Multinational companies, including in the financial and professional services sector, have long favoured India as a destination in which to base their back-office functions. Increasingly, they are locating higher-value services in India too. See Section 3.3 for more details.

Mining equipment, technology and services (METS)

India’s mining sector is poised for growth. In addition to increasing domestic thermal coal production, the government is committed to developing more sustainable mining practices. As such, India’s METS sector offers Australian businesses opportunities both to help India expand its domestic mining capacity and also improve sustainability in the sector. Mining is a priority area under the government’s Make in India policy. There is also an opportunity to increase critical minerals production for use in aerospace and defence, electric vehicle production and renewable energy generation and storage. India has large reserves of iron ore, bauxite, chromium, manganese ore, baryte and rare earths and mineral salts. Australia is deepening ties with India in this sector through the Australia-India Green Steel Partnership and the Australia-India Critical Minerals Investment Partnership.

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