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The Australia cricket team needs a win in India - and so do our exporters

By Tim Harcourt - posted Monday, 1 March 2004

This summer Australia played host to the Indian cricket team. And next comes the really hard part. Later this year Australia has to take on India in the sub continent. And to top it off, we’ll have to do it without captain Steve Waugh, who has just retired. Of course, India is very special to Steve Waugh. He has written books about India and has a number of charities there. He has also described India as cricket’s last frontier. In fact, it’s the only place this legendary cricket warrior has left unconquered. Last time, in 2001, we came close but the follow-on and that breath taking innings of 281 by VVS Laxman in the Second Test at Eden Gardens in Kolkata (Calcutta) changed all that. Waugh’s “indomitables” (like the great Don Bradman’s “invincibles” of the 1940s) have done it all on the international cricket stage playing crowd pleasing, entertaining cricket. But an away series win in India is yet to be won – and it will have to be done without one of our greatest captains and one of the most fearless and combative Australians to wear the baggy green.

Australia’s cricket predicament is a bit like that of the average Australian business. It’s easy to play at home, on the easy familiar grounds with all the right networks and comforts in place. But playing away, in unfamiliar circumstances, in an unusual climate with mysterious cultures and conditions, is a different story. Winning away is the true test of a champion team or business – its takes adaptability, flexibility and character – something Steve Waugh has in spades. And it pays off. Economic research shows that exporting experience, even if it’s tough, makes a business a better one – in terms of productivity, quality, skill, service-delivery and the bottom line. For an average business playing away, like a cricket team, lifts your fighting spirit and your overall standards and competencies.

As Australia’s cricketers take on India, many Australian exporters and entrepreneurs will be doing their own “conquering” in regard to the Indian economy.


So, how are they faring in such a vast market as India?

According to Peter Kane, Australia’s Senior Trade Commissioner in New Delhi, Australian business is awakening quickly to the opportunities to be seized in the Indian sub-continent. “Economic growth in India, is averaging between four and seven per cent over the past five years and with a population of over 1 billion people (which will eventually outstrip China) and with a middle class of 285 million the opportunities are boundless” he says. He adds, “Many Australian companies are investing in India, such as AMP Sanmar, Lumley Technology, The Cookie Man, and, of course, Fosters and we are building up close relationships between Australian and Indian business.” Examples include, India’s IT giant Tata, who won the contract to upgrade Woolworth’s IT systems.

One major factor has been India’s economic reform process, which began with the passing of the Cold War. Whilst India, as a non-aligned nation, which flirted with Fabian socialism of the Nehru-Gandhi family variety, had been relatively closed to trade and foreign direct investment, in the 1990s it began to embrace the open economy. Tariffs and quotas were reduced, foreign direct investment was, at last, embraced and the previously shunned Indian ‘Diaspora’ (Indians living overseas) were made welcome back in Mother India. In an influential article, written this year for Foreign Policy, two US-based academics, Yasheng Huang and Tarun Khanna compare the Indian and China models of development. Whilst noting that the Indian reforms have come much later than China’s, they do think that India has some comparative strengths to draw upon. Strong democratic and judicial institutions, corporate governance and rule of law (partly a British legacy), a large number of Indian grown companies competing abroad (Tata, Infosys, Sundaram Motors, Wipro, Ranbaxy and Dr Reddy’s Labs), a well educated Diaspora, and strengths in knowledge based industries were all highlighted as reasons to be optimistic about India’s growth prospects. As the authors themselves concluded: “The Indian Diaspora has famously distinguished itself in knowledge-based industries. . . With the help of its Diaspora, China has won the race to be the world’s factory. With the help of its Diaspora, India could become the world’ technology lab.”

And Australia has indeed been one of the main beneficiaries of the policy-shift in New Delhi. In fact, over the 1990s, Australia’s merchandise exports to India grew 50 per cent faster than they did globally. Australia’s growth in exports to India was faster than to Malaysia, Singapore, Indonesia, Japan, Taiwan, and Korea. In the ‘Weary’ Dunlop Asialink lecture recently in Melbourne, the Governor of the Reserve Bank of Australia, Ian Macfarlane, noted India’s rise in Asia and its potential importance to Australia, together with China. “If India emerges as a second Asian engine of growth, Australia will face new opportunities and challenges. But we are well placed to respond to its increasing demands for imports of food, materials and intermediate goods. As with Korea, Australia has had a rising share over the past five years of India’s imports of materials” he said.

In addition, on the services front, India has been a good market for education and tourism. According to Senior Trade Commissioner Kane: “student numbers have grown ten-fold since 1993, and tourism numbers have grown from 3,000 to 30,000 over the same period.” People links and the 200,000 strong Indian community in Australia have also assisted this.

And in terms of cultural exports – don’t forget ‘Bollywood’! The Indian film industry produces over 1000 films a year at a cost of one billion (AUD) - with studios in Film City (Mumbai), Chennai and Hyderabad. The films are made to satisfy the 20 million-plus patrons who visit the country’s 13,000 cinemas every day.


Australia has proved to be a popular choice by Bollywood filmmakers for location shots, post production work, animation, and special effects where our attractive locations and the skills of our film industry workers make us especially competitive.

According to the Australian Trade Commissioner in Mumbai, Don Cairns:

“The ongoing demand for new material presents huge opportunities for Australia which is fast becoming a preferred destination for Indian film, TV commercials and music video producers. The interest from the local industry in Australia has been very positive, despite strong competition from the Germans, New Zealanders, Swiss and the French”.

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About the Author

Tim Harcourt is the JW Nevile Fellow in Economics at the UNSW Business School, Sydney, Australia. He is also the author-host of The Airport Economist.

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