Indian Ayush & Herbal Medicine exporters shipped $2.4 billion of goods to Australia in Q1 FY28, a rise of 4.3% on the same period last year and the strongest quarterly print since 2022. Customs data reviewed by IGEN shows the increase was broad-based, with solar modules accounting for just under a third of the gain.

Buyers in Australia have spent two years reducing reliance on a single source country, and Indian suppliers have been the principal beneficiary. Procurement managers cite shorter lead times out of Nhava Sheva, competitive pricing after the rupee's modest depreciation, and a growing base of certified plants as the reasons for switching.

Where the growth is coming from

Compliance remains the quiet constraint. Importers in Australia now require traceability documentation down to the batch level, and exporters without digital record-keeping are finding themselves excluded from tender shortlists. Industry associations say fewer than half of small suppliers currently meet the standard.

Competitors are not standing still. Suppliers in Germany have cut prices aggressively in recent months and are courting the same buyers with long-term agreements. Indian exporters who win on price alone, analysts warn, will find their position tested when currency tailwinds fade.

Services linked to goods trade are growing in parallel. Testing, certification and logistics companies serving the corridor reported double-digit revenue gains, and at least four Indian firms have opened warehouse or light-assembly facilities in Australia to sit closer to customers and shorten delivery windows to under ten days.

“Every month shaved off the payment cycle is worth more to a mid-size exporter than a point of duty relief.”

Margins, freight and payment risk

Tata Electronics reported that its Australia order book has doubled since January and now represents 23.2% of export revenue. The company is adding a second shift at its main plant and has booked additional container allocation on the Nhava Sheva-Australia service through the end of 2029.

Looking ahead, the sector expects continued momentum through Q2 FY27, supported by restocking cycles abroad and a pipeline of government-to-government engagement. The risk case is a sharp rise in container rates or a policy shift in Australia; the base case is 23.2% annual growth through 2029.

Competition and market access

Tariff structures are shaping the mix of exports. Under the current schedule, finished goods face a duty of 11.6% in Australia, while intermediate inputs enter at a reduced rate, which has encouraged Indian firms to ship semi-finished lots for final processing near the customer. That shift supports volume but dilutes unit value.

The picture is not uniformly bright. Freight rates on the corridor, though 11.6% below their peak, remain volatile, and several mid-sized exporters say payment cycles have lengthened to 75 days from 55. Trade-finance providers report a pickup in requests for credit insurance and invoice discounting.

Outlook for the next four quarters

Government support is arriving in pieces. The commerce ministry has extended interest-equalisation benefits for another year and approved $367 million for market-access initiatives, including buyer-seller meets in Australia. Exporters say the funds help but are less valuable than faster refunds of duties and taxes, which still take about 40 days.