Australian Investment into India: Skill India, Clean Energy Market

Posted on by
By Bradley Dunseith

Australia-Investment-India-Skill-India-Green-Energy

 

Australia’s growth prospects in India are expanding.

Among key opportunities identified by the country’s entrepreneurs are: investing in India’s higher education and vocational sectors and India’s growing renewables market. India’s rapid growth has resulted in the need for complex, skill-oriented jobs on one hand, and accelerated its energy consumption and requirements, on the other.

When looking at the Indian education and training sector, Australian investors observe that India’s large labor supply does not automatically serve the country’s high employment targets. Rather, the availability of labor is now becoming a challenge for the government as industrial innovation and automation necessitates up-skilling and technical training.

Accordingly, this sector has captured the imagination of startups and foreign investors – incentivized by the Modi government’s support for private sector participation.

In the case of India’s energy markets, Australia’s trade and business relationship with India previously centered on the former being a major supplier of coal to India. Today, as India is focused on developing its clean and renewable energies industry, Australian companies are embracing new opportunities in the fast-growing market. 

In this article, we focus on how Australian businesses are investing in the above industries – education and clean energy. Lastly, we discuss how Australian investors can improve their experience in India by approaching the country’s markets on a state-by-state basis.

Investing in ‘Skill India’ offers new growth strategies

India is one of the fastest growing emerging markets. However, like the country’s infrastructure, training programs and educational courses have not been able to keep apace of this surge in growth.

By 2022, India is expected to have the world’s largest, young workforce – nearly 900 million strong. But, without high quality education and effective training programs, India’s growing labor pool could become more of a liability than an asset.

Consequently, India’s federal government is increasingly looking to the private sector and to foreign players for support in training its massive workforce.

In 2015, the Modi government launched a new initiative titled ‘Skill India’ that seeks to train 400 million Indians by 2022. Complementary initiatives, such as ‘Make in India,’ or ‘Startup India’ aim to create a whole ecosystem of readily available skilled labor, develop supply chains, create manufacturing growth, and boost consumption. 

Australian businesses investing in high quality programs training India’s workforce are not only capturing this newly emerging market opportunity. They are building a bigger space for Australian players to be a part of India’s growth over the long term.

In fact, Australia training models and services are already successfully establishing themselves in India. Sydac, a South Australian company, secured a major US$30 million contract to provide simulation training to the state-owned Indian Railways.

The governments of both countries are working together to increase Australia’s presence in India’s higher education and vocational sectors. In 2015, Australia and India signed a Memorandum of Understanding (MoU) on education, training, and research. More recently, in April 2017, Australia brought a Skills Mission to Delhi titled “Skilling a Global Economy.”

Professional-Service_IB-icons-2017RELATED: Pre-Investment, Market Entry Strategy Advisory

Clean energy: Australian expertise opens new market potential

Australia is a leader in clean and renewable energy, and India is pushing to dramatically increase its renewable power capacity. A recent Ernst & Young (EY) report showcases India’s move up to the second spot in the ‘Renewable energy country attractiveness index’ 2017 from the third position it held in the last two years.

During the 2015 UN Climate Change Conference in Paris, Indian Prime Minister Narendra Modi announced that his country would add 160 gigawatts (GW) of wind and solar energy by 2022. India has struggled to keep up with these ambitious goals. However, the country is still rapidly expanding both its wind and solar energy production. As of April 2017, India generated 5,400 megawatts (MW) of wind energy and 12 GW of solar energy annually. 

Establishing Australian vocational training programs, which teach Indian technicians to maintain and repair wind turbines or solar panels – for instance – will spur increased demand for clean technologies made in Australia. By highlighting and leveraging this kind of expertise, businesses can foster a whole ecosystem of interest for Australian exports.

Related-Link_IB-icons_2017RELATED: Canadian Investments into India Grow – Appeal of Expanding Economy, Stability, and Reforms 

Doing business in India: A state-centric approach

According to the Australian Trade and Investment Commission’s 2015 International Business Survey, Australian companies identify India as one of its most important – albeit difficult – markets abroad.

How can foreign players make India a more manageable place to do business?

One way is to approach the country on a state-by-state basis.

Each Indian state has its own language, customs, and regulations. Preparing to engage with all 29 states at once will leave foreign businesses overwhelmed and frustrated. Targeting a single state, on the other hand, can make those cultural differences and business barriers feel surmountable.

A great example of this approach is in the sister-state relationship forged between South Australia and Rajasthan; the two states signed an MoU to the effect in 2015.

In a federal constitutional set up, state governments are usually able to implement reforms and streamline bureaucratic procedures faster than the federal government. In India, states often compete with one another for foreign funding by trying to provide the most attractive incentives for doing business within their unique state.

By approaching India one state at a time, Australian businesses will have higher success rates in navigating the country’s business climate. Moreover, a concentrated emphasis on individual states will better showcase Australia’s unique expertise – adding to the country’s ‘brand power’ while integrating Australia into India’s continued growth.

 

About Us

India Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Eurasia, including ASEANChinaIndonesiaRussia, the Silk Road, & Vietnam. For editorial matters please contact us here and for a complimentary subscription to our products, please click here.

Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout India and the Asian region. We maintain offices in Delhi and Mumbai and throughout China, South-East Asia, India, and Russia. For assistance with India investment issues or into Asia overall, please contact us at india@dezshira.com or visit us at www.dezshira.com.

 
Related-Readings_IB-icons_2017Related Reading:

dsa brochure

Dezan Shira & Associates Brochure

Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.


2017-18 Tax Guide Thumbnail for Related Sources

Tax, Accounting and Audit in India 2017-18

The third edition of Tax, Accounting and Audit in India is updated for 2017, and provides an overview of the fundamentals of India’s tax, accounting, and audit regime. The guide also includes a detailed introduction of the Goods and Services Tax (GST) that was launched on July 1, 2017, representing the complete transformation of India’s indirect taxation structure. 


Payroll processing and compliance in India

Payroll Processing and Compliance in India

In this issue of India Briefing Magazine, we discuss payroll processing and reporting in India, and the various regulations and tax norms that impact salary and wage computation. Further, we explain India’s complex social security system and gratuity law, and how it applies to companies. Finally, we describe the importance of IT infrastructure, compliance, and confidentiality when processing payroll in India.

Leave a Reply

Your email address will not be published. Required fields are marked *

Never Miss an Update

Subscribe to gain even better insights into doing business throughout the India. Subscribing also lets you to take full advantage of all our website features including customizable searches, favorites, wish lists and gift functions and access to otherwise restricted content.

Scroll to top