Agricultural exports to India grew 50 per cent in the past two years

India is now the most populous country in the world and Australian farmers are making inroads there.

ANZ Head of Agribusiness Mark Bennett and Om Tyagi from Indian agricultural technology company UGL on the outskirts of Agra, India. Picture: Charlie Peel

Australian farmers are making a big push into India as an alternative market to China, with a 50 per cent jump in agricultural exports since a new trade agreement came into force last year.

India surpassed China as the world’s most populous country in 2023, but it is the massive boom in the country’s middle class and the growing demand for high-quality produce that has driven the surge in Australian exports and put India at the front of the Albanese government’s future trade plans.

Already, Australian farmers have responded to the rapid economic shift, with agricultural exports to India rising from $1.08bn to $1.77bn since the Australia-India Economic Co-operation and Trade Agreement came into force.

It has fuelled hope among Australian farmers that India, with a population of 1.42 billion and the world’s fifth largest economy, could offer a long-term alternative market to China, providing a buffer for exporters fearful of punitive Chinese trade restrictions like those enforced on meat, timber, barley and lobster in 2020.

While the seismic uplift of the middle class bears resemblance to the economic growth of China over the past two decades that led to it becoming Australia’s largest trading partner, analysts say the rise of India will be different because of its protectionist policies and socially driven agriculture sector.

A report released on Monday in the Indian capital, New Delhi, by ANZ, which has led a trade delegation to the country, found that despite the country’s insistence on being able to feed its own people, some constraints meant there were gaps that could be supplied by Australian producers.

“The modern rise of India is an opportunity to leverage long-held and valued trade and political relationships,” ANZ head of agribusiness Mark Bennett said.

“We have seen the impacts and opportunities created by the rising middle class of China over the last 15 years, especially for Australia as a nearby, sophisticated production base.

“And as India surpasses China as the world’s largest population, all eyes are on this market as to its needs, its capacity, and where the opportunities might be.”

While China’s population has started to contract, India’s is growing by 0.8 per cent a year, adding 11 million people to the increasingly urbanised population.

Yet it’s the 28 million Indians a year entering the middle-class that is mostly driving the country’s economic growth.

Nowhere is the demographic shift clearer than in New Delhi and Mumbai, where shiny glass-faced business parks and shopping centres sit next to roadside stalls and new apartment towers rise up out of the slums.

Since the ECTA came into force, eliminating tariffs on 85 per cent of Australian goods, exports of Australian sheep meat, seafood, broad beans, avocados, citrus and almonds have surged.

Mr Bennett said India’s protectionist nature, particularly when it came to agriculture, and relatively haphazard imports meant Australian farmers and exporters needed to better understand the country to position themselves to provide it with goods.

“Most Australian agricultural trade to India occurs to supplement Indian production in years where the season has impacted the domestic crop. Other than wool and cotton exports, which remain quite consistent, Australian agricultural exports to India remain volatile,” he said.

“A growing middle-class brings changing consumer demand for high quality, sustainably produced, clean, green goods – an area where Australia has an excellent reputation.

“Further, Prime Minister (Narendra) Modi’s push to grow the domestic manufacturing sector, particularly the food manufacturing sector, may see an increase in demand for goods to be manufactured and exported.”

Albanese government ministers, including the Prime Minister himself, have visited India 23 times since 2022, highlighting the importance Canberra places on the relationship.

That was reciprocated with 17 Indian ministerial visits to Australia, including a tour by Mr Modi in May last year.

Austrade’s Southeast Asia managing director, Monica Kennedy, said the Australian government intended to drive further growth by focusing on providing Australian produce to Indian food manufacturers.

“We are working with India to prepare an environment in which we have products which are produced in Australia, made in India and exported to the world,” she said.

Recognising the massive growth in agricultural trade, the government has increased its funding to establish business partnerships between Australian and Indian businesses.

“The Australian India Business Exchange Program has helped about 300 Australian businesses achieve about $1bn in commercial outcomes for their trade with India,” Dr Kennedy said.

Austrade general manager for Southeast Asia, Monica Kennedy, at the Australian high commission residence. Picture: Charlie Peel

“We’ve received indications from the Australian government that we’re to double-down on what we do and they have doubled-down on investment for us.”

Despite the visual changes to the cities as the middle-class grows, India retains its traditional subsistence agriculture sector on the outskirts of the cities, where farmers tend plots of about 2ha each, which can support a family.

The hand-harvesting and haphazard supply chain are different to Australia, but the food gets to where it needs to be – on dinner plates and in export containers.

The large number of farms and quality arable land make India, despite its huge population, a net exporter of agricultural products, particularly wheat, cereals, seafood and meat.

It’s the major imports of pulses, like chickpeas and lentils, oils and fruits, that provide significant opportunity for Australian farmers.

Speaking at an aggregation of farms on the outskirts of the city of Agra – most famous for the Taj Mahal – on Sunday, Om Tyagi from Indian agricultural technology company UGL, said farming held a strong role in Indian society.

“In India, farming is a social subject, not a business,” he said. “India is growing well and has a focus to feed its people.

“We are aspiring to grow, and we are helping to feed the world.”