2026

For Australia, the implications are clear. India is not simply a fast‑growing market; it is a strategic partner. Australia’s economic future is being reshaped by a partner whose importance is accelerating faster than most investors realise. For decades, Australia’s external orientation has been dominated by the United States and China. But a new strategic relationship is emerging — one built on complementary strengths, shared economic interests, and long‑term structural alignment. India is becoming increasingly significant for Australia, and the shift is now being reinforced at the policy level. Positive Tariff Developments  A major milestone arrives on 1 January 2026, when Australia will scrap tariffs on all Indian exports under the India–Australia Economic Cooperation and Trade Agreement (ECTA). This is not a symbolic gesture — it is a structural reset.  It signals that both nations see each other as long‑term economic partners, not transactional trading counterparts. For Australia, it opens the door to deeper integration with the world’s fastest‑growing major economy. For India, it strengthens access to a stable, high‑income market with strong demand for services, resources, and education. But the real story goes far beyond tariffs. India’s rise is not just a growth story — it is a strategic story, powered by four internal engines that align naturally with Australia’s long‑term interests: demographics, digitisation, financialisation, and formalisation. A Strategic focus on India’s Demographics India’s demographic advantage is unmatched. With a median age of 28 and more than 12 million people entering the workforce each year, India is building a consumption base that will expand for decades.    This is not a short‑term boom; it is a structural demand cycle that supports sectors where Australia has deep expertise — education, financial services, healthcare, and premium consumer goods. Digitisation is the second engine. India’s digital public infrastructure — Aadhaar, UPI, GST, ONDC — has created a low‑cost, high‑efficiency economic backbone that is accelerating productivity and formalising the economy. For Australian investors, this means a more transparent, investable market where listed companies gain market share and earnings growth becomes more predictable. Financialisation and formalisation are the third and fourth engines. As more Indians enter the banking system, adopt digital payments, and invest in financial products, the country is experiencing a structural rise in savings, credit penetration, and capital market participation. This creates a deeper, more resilient financial ecosystem — one that supports long‑term corporate growth and aligns with Australia’s strengths in financial services and wealth management. Indian Companies Ready for JVs India’s corporate sector is also entering a powerful new phase. Balance sheets are strong, leverage is low, and profit‑to‑GDP is rising from multi‑decade lows.  Companies are positioned to benefit from operating leverage as demand accelerates, and many are expanding globally thanks to competitive labour costs, engineering talent, and supportive policy frameworks. For Australia, the implications are clear. India is not simply a fast‑growing market; it is a strategic partner whose internal growth engines align with our economic strengths, diversification needs, and long‑term investment objectives.  With tariffs set to fall to zero from January 2026 and bilateral ties deepening, India is becoming an essential part of Australia’s economic future — and a compelling allocation for investors seeking structural growth beyond the ASX and China.

The World’s Next Operating System   India is increasingly emerging as a preferred destination for large-scale foreign capital deployment across infrastructure, manufacturing, technology, and human capital. Foreign inflows into Indian equities have regained momentum, but the more consequential development lies in foreign direct investment and long-duration capital. Global technology leaders are deploying tens of billions of US dollars into cloud infrastructure, AI capacity, advanced manufacturing, and workforce development.  These investments reflect long-term strategic intent rather than cyclical capital allocation. Microsoft Microsoft’s planned US$17.5 bn investment between 2026 and 2029 is its largest in Asia, and it highlights India’s role as a platform for AI diffusion at a population scale. The focus extends beyond data centres to national digital platforms and large-scale skills training, with a target of equipping 20 million people with AI capabilities by 2030. This positions India not only as a consumer of technology but as a scalable producer of digital talent.  Satya Nadella, chairman and CEO of Microsoft, announced the investment during his visit to India Amazon Amazon has announced plans to invest more than US$35 billion in India by 2030, building on nearly US$40 billion already deployed over the past 15 years, positioning it as one of the country’s largest foreign investors. The investment spans e-commerce, cloud, logistics, AI and digital infrastructure, with a strategic focus on AI-led digitisation, export expansion and job creation.   To date, Amazon’s platform has digitised over 12 million small businesses, enabled US$20 billion in cumulative e-commerce exports, and supported approximately 2.8 million jobs across India’s technology, logistics and services ecosystem. By 2030, Amazon expects to support up to 3.8 million jobs and quadruple cumulative exports to US$80 billion, while extending AI capabilities to 15 million small businesses and AI education to 4 million students.   Amazon’s investment in India Apple Manufacturing tells a parallel story. Apple’s rapid expansion of iPhone production in India, now spanning all major models and supplying global markets, demonstrates how India is becoming a meaningful export base rather than a marginal alternative. In the first half of 2025, India produced nearly 24 million iPhones, with exports surging over 50% year-on-year. India has overtaken China as the largest exporter of smartphones to the US, marking a significant realignment in global supply chains. What it means for investors Taken together, these developments reflect a broadening of India’s growth drivers. Domestic consumption remains important, but the incremental growth impulse is increasingly coming from foreign capital, global enterprises, and high-value infrastructure investment.   For investors, this shift reinforces the case for active management: the primary beneficiaries of India’s transformation are increasingly found across supply chains, infrastructure, industrials, and emerging technology platforms, rather than solely within yesterday’s large-cap index constituents that dominate passive exposures.