Investor Updates
India favoured as key investment partner for Australian innovation
30 July 2013
India continues to be a promising source of foreign direct investment (FDI), according to the Australian Trade Commission’s (Austrade) Nicola Watkinson, Minister Commercial and Senior Trade & Investment Commissioner, South Asia.
“India is already a significant source of FDI for Australia, and its importance will only continue to grow,” Ms Watkinson said.
“India is a key part of Australia’s future in the Asian Century.”
Austrade recently undertook a detailed market opportunity analysis and found that India remains a prospective source of inward investment, particularly into innovation-led technology sectors.
Indian outward FDI flows have grown steadily as its companies chase markets, technologies and resources and invest to manage the domestic risk and uncertainty.
Australia’s traditional investment targets, the resources and energy sectors, have seen significant investments from India. However, Ms Watkinson sees potential to attract investment into Australia’s innovative industries, including life sciences, advanced materials, clean technology and the digital economy.
“While Indian investments in Australian resource projects have attracted media coverage, our research suggests the majority of recent greenfield investment projects have been in the areas of services.”
“There is a clear alignment with Australia’s strong track record in innovation, such as our capabilities in energy efficiency and remote renewables, and India’s need for technology solutions in these areas,” she said.
Likewise, Ms Watkinson sees an opportunity to engage Indian industry to raise awareness of Australian investment opportunities in advanced materials, life sciences and food research.
“This investment is critical in helping catalyse Australian research with a view to commercialising and taking it to the global market.”
However, Australia faces stiff competition as an investment destination from both emerging and developed markets.
“Our research found that there are a number of IPAs [investment promotion agencies] keen to get an early-mover advantage by forming long-term relationships with major corporates looking to internationalise,” Ms Watkinson said.
“Austrade needs a strategic and targeted approach to maintain visibility in one of the world’s key economies.”
With a sustained focus and greater promotion and engagement with Indian industry, Ms Watkinson believes solid investment outcomes can be expected in the medium term.
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