\n\tBy Greg Peel<\/p>\n
\n\tHands up. What two commodities dominate trade between Australia and India?<\/p>\n
\n\tIf you assume coal is one of them, then you're spot on. But you may not have guessed that the Number One commodity is jewellery.<\/p>\n
\n\tUnlike China, India is devoid of coal. So great has China's growth in coal consumption been that China has now shifted, probably for good, to being a net importer rather than a net exporter. India now imports 59m tonnes of coal a year, with Australia as one source. Australia's coal exports to India are a one-way street.<\/p>\n
\n\tJewellery trade between the two countries is, on the other hand, a two-way street. India is one of the world's largest manufacturers of jewellery but its own growing middle class ensures demand beyond that which is fashioned locally. Since reforming its economy in the nineties, India's two-way jewellery trade has become big business. In 2000, Australia imported $10.3bn worth of jewellery from India and exported $7.5bn to India. In 2009 those numbers were $39.3bn and $28.0bn. And the increase does not simply reflect, for example, the rise in the price of gold. Volumes have also increased significantly.<\/p>\n
\n\tThese statistics are contained in a note produced this week by ANZ Bank economists. We all know that China is now Australia's trade “giant” and we are also aware that India is lurking, albeit forever eclipsed by its more advanced neighbour. But as of 2010, India is now Australia's fourth biggest export market behind China, Japan and Korea. With a bullet.<\/p>\n
\n\tLet's look at some of those numbers.<\/p>\n
\n\tIn the nineties, India's export growth rate was around 9%. In the noughties (now complete) it was 17%. India's nineties import growth rate was 9%, and 20% in the noughties. Despite such growth rates, India's economy still remains a relatively “closed” one, which simply means domestic consumption accounts for the bulk of domestic output. Slowly but surely however, India is becoming a player in global trade. In 2000 India's trade-to-GDP ratio was 21% and in 2010 it was 35%.<\/p>\n
\n\tAustralia has been a significant beneficiary of India's emergence in global trade. India's imports from Australia grew at a rate of 19% in 2000-05 and 30% in 2006-10, consistently outpacing India's total world import numbers. Australia is a top-ten import partner for India. In terms of bilateral trade between the two countries, that totalled $1.5bn in 2000 and $13.8bn in 2010.<\/p>\n
\n\tIndia's exports to Australia have nevertheless not seen similar rates of growth as in the other direction, and have indeed remained flat. Hence India's trade deficit with Australia is growing at a rapid pace. It now eclipses that of India's deficit with the ASEAN nations.<\/p>\n
\n\tThe sorts of goods Australia exports to India have changed markedly in ten years. In 2000, about half of the total were crude materials and minerals (including coal) and 26% were manufactured goods. In 2010, manufactured goods have all but slipped off the dial, minerals have slipped slightly to just over 40%, but the big mover and shaker has been the aforementioned jewellery which in 2010 represented 46%.<\/p>\n
\n\tIndia, notes ANZ, is only just beginning the sort of industrialisation and infrastructure upgrade that has been in full swing in China over the past decade. India's jewellery demand is unlikely to subside in this new decade, but nor will its growth in demand for coal.<\/p>\n","protected":false},"excerpt":{"rendered":"
ANZ compares the numbers over the last decade to show just how rapidly Australia’s trading ties with India are growing in significance.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[58],"tags":[27,89,88,22],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57664"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=57664"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57664\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=57664"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=57664"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=57664"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}