09 Feb 2023
The concept of a false dawn can mean different things in different contexts. It is defined as a promising situation that comes to nothing or – more literally – the transient light which precedes the rising of the sun.
It is also a phrase often used to describe the potential for economic development in India – the world’s largest democracy and its fifth biggest economy.
“Servicing Indian financial institutions and other multinationals is a big part of our business. So is helping Indian companies operating around the world, including in Australia.”
I have been traveling to India for more than 30 years and I have certainly heard the term false dawn associated with the enormous promise of the country, its people and its economic model.
But I have to say, this time if feels different. Both in terms of changes in the country’s operating environment and the policy reforms taking place. There has been real reform and it feels like the sun is about to rise on the Indian market – albeit gradually.
Capitalising on this new dawn will still require patience and persistence and ANZ is very well placed on this front given our decades of investment in the country.
Against this backdrop I’m visiting India this week to visit our operations and meet with staff and customers. I will also take part in a business delegation of Australian CEOs and senior executives led by Prime Minister Anthony Albanese.
The commitment of our delegation helps to underline the importance the Australian Government and Australian companies place on the development of the Indian market. It will also bolster the security partnership and build trade and business ties.
It occurs with the backdrop of the Australia-India Economic Cooperation and Trade Agreement signed last year which will deepen economic ties and opportunities between the two countries. Bilateral trade could grow by 60 per cent over next five years due to the deal, according to India’s Ministry of Commerce. According to our own ANZ Research the value of that trade could hit $US52 billion by 2030.
The opportunity is not lost on us at the bank and we already have a big presence in India. ANZ has about 7500 employees in a service hub in Bengaluru supporting banking operations and transaction management services in markets including Australia, New Zealand, Europe and the US.
ANZ has banking branches in Mumbai, Gurugram and Bengaluru and India is also a key country for our Institutional banking business – which has 80 bankers in the country serving about 200 corporate customers across a variety of industries.
And our connection to the country goes back to the 1980s when ANZ acquired Grindlays Bank and started a fledgling technical support operation in Bengaluru. Our presence on the ground gives us an advantage over rivals as we seek to facilitate the movement of goods and services across the Asia-Pacific region.
We also have a big presence in commodities like gold. ANZ was the leading supplier of gold bullion to the Indian market, accounting for about one fifth of the country’s gold imports, in 2021 and 2022.
In keeping with this outlook, we plan to visit the country again in June, this time taking our board and executive for a week - again underlining the importance of the Indian market to ANZ.
Visitors to India are often surprised by the sophistication of the country’s financial system. For ANZ, servicing Indian financial institutions and other multinationals is a big part of our business. So is helping Indian companies operating around the world, including in Australia.
To date, the bilateral trade and investment flows have largely come from Indian companies with links to Australia. This business delegation will likely help broaden the range of Indian companies open to doing business with, and in, Australia.
But where there is still an opportunity is helping to support Australian companies working in India. There haven’t been many to date but that doesn’t mean we shouldn’t persist because India’s economy offers tremendous opportunities.
It is the world’s second most populous country, soon to be the most populous, and its share of global gross domestic product (GDP) has more than tripled since 1992. It is still developing at a rapid rate with a massive need for capital and infrastructure. Australian companies are well-placed to provide some of that.
The amount of infrastructure required for India's major cities is enormous. Infrastructure now represents 23 per cent of total spending at the state government level, the highest in a decade. And central government spending on infrastructure is at a record 19 per cent.
With some patience, persistence and hard work we believe India is primed to fulfil its potential and take its place in the sun.
Shayne Elliott is CEO of ANZ.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
09 Feb 2023
14 Apr 2021