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.
