An ASX truck manufacturer has gone in to bat early for Australia’s new partnership with India, citing ‘growing openings’ for Aussie companies.
They’d signed up for a joint hydrogen task force and expanded a co-operation on clean energy.
They’d also inked a headline deal on migration designed to lift the exchange of students, researchers and business.
There was precedent.
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The Economic Cooperation and Trade Agreement (ECTA), signed in December last year, was actually the first signed by India with a “developed country” in a decade.
Before that had come an early harvest agreement and a forerunner of the Comprehensive Economic Cooperation Agreement (CECA), which we’ve been nutting out with various Indian bosses since 2011.
Albanese said India and Australia were accelerating a much, much broader economic partnership, defence ties, crayfish, lentils … everything is on the table.
Going out to bat early for Australia on this new playing field has been Austin Engineering (ASX:ANG).
Its CEO and MD David Singleton on Tuesday morning announced his company’s first foray into the subcontinent.
It’s not a big one by any stretch of the imagination, but it could be a template for more Aussie ventures in India.
“The Australian government has vastly improved business access and trade opportunity with India through an elimination, reduction or phase out of tariffs, and we see a long-term future potential for Austin in this market,” Singleton told Stockhead.
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Our conversation came not long after India’s May index of industrial production (IIP) was announced, showing another rise – this one a stout 4.2 per cent YoY.
The factory output grew at a higher-than-expected rate driven by a pick-up in manufacturing and mining.
“India’s economy is gaining strength and it’s presenting growing openings for Australian companies to increase business and trade, and we are excited to be part of this opportunity,” Singleton said.
Relations between India and Australia have strengthened over the last decade, says Biswajit Dhar, Professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University.
“The revival of the Quadrilateral Security Dialogue, or the Quad, in 2017 provided an important platform through which the two countries deepened their engagement,” he said.
Australia has also emerged as a more significant trade partner for India during the past five years.
During fiscal year 2018–19, Australia’s share of India’s total trade was 1.6 per cent, which increased to 2.4 per cent in 2021–22. But during 2022–23, this growth trend was reversed because of reduced exports from India.
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“The commitments taken by the two partners suggest that the ECTA provides a good platform for taking India–Australia trade to the next level,” Professor Dhar told the ANU’s East Asia Forum this month.
We trashed 98 per cent of our tariffs when the agreement came into force and we’ll remove any remaining within five years.
India eliminated tariffs on 40 per cent of its tariff lines and will do the same on another 30 per cent in a phased manner over the next seven years, Professor Dhar notes.
“The more important aspect of India’s offer is its commitment to enhance imports of several products that are commercially important for Australian businesses, including sheep meat, wool, fresh rock lobsters, coal, alumina, titanium dioxide and certain critical minerals.
“India has also provided a duty-free quota for facilitating cotton imports, and has slashed tariffs on lentils, almonds, oranges, mandarins and pears.”
On Tuesday, Austin received its maiden purchase orders for four haul truck trays from an as- yet-unnamed major iron ore producer in India, potentially opening a giant new market for its Asia Pacific business.
“India presents an exciting market opportunity for Austin and we’re very pleased to receive our first order for truck trays for delivery to India,” Singleton said.
“Our operations in Indonesia and Australia are well positioned to service this market given our close proximity and well-established operations.
“India has a very large mining sector. It is one of the world’s largest producers of iron ore, and our experience with building equipment for Australia’s iron ore industry is favourable in respect to the Indian market opportunity.
“Our products are built to drive efficiency in operations – lighter trucks, more payload per tray, precision wear monitoring and a reduction in environmental footprint overall.”
It’s an Aussie tray for Indian iron ore. Picture: ANG
Singleton says the truck trays in this order will be used in iron ore operations to demonstrate the benefits of the Austin design.
That said, there’s no guarantee of further orders, although Austin is staring at an order of some 165 trays across the client’s various iron ore and coal mines.
The iron ore truck trays usually have a service life of around four years before they need replacing, so there’s a lot of runs on this wicket and it’s looking a lot greener than Indian pitches ever did back in the day.
Austin says the orders follow nine months of retrofitting engineering alongside the customer to develop a customised ULTIMA tray that’s designed to be used without a steel wear liner.
Singleton says it can outperform more traditional setups and deliver an additional circa 66,000 tonnes of ore per annum per truck, with less downtime for maintenance to replace wear liners.
“This equates to a significant lift in overall tonnage delivered across the full operation per annum, and additionally leads to a reduction in fuel and tyre usage, thereby reducing carbon emissions per tonne of ore delivered,” he said.
Austin’s Mainetrack condition monitoring software will be used to monitor the performance of all Austin trays deployed at the sites, allowing wear rates to be accurately evaluated.
Austin added the digital wear monitoring system to its service offering through its acquisition of Mainetec in 2022. Initially used on Mainetec’s excavator and dipper buckets, Austin has now configured the system for deployment on its truck tray range.
The four trays are being manufactured in Austin’s facility in Batam, Indonesia, and are expected to be ready for delivery in the next six weeks.
Singleton also sees India as an entry point to “further broaden our customer network across the Asia Pacific region”.
“India presents an important opportunity for Austin to market its customised equipment and the potential advantages it could bring the country’s iron ore sector,” he said.
“We also see India as a logical market expansion opportunity given our existing experience in the Australian iron ore sector.”
This content first appeared on stockhead.com.au
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