If you run an international business today, it is likely that the way you choose markets looks different from what it did even a few years ago. If it doesn’t, there is a strong case for revisiting the criteria.
Tariffs are being used more aggressively, export controls are expanding, and disruption through the Red Sea and the Middle East continues to affect shipping, energy markets and insurance costs. Governments are also spending heavily to secure critical industries, energy supplies and strategic technologies. Trade policy, industrial policy and national security are becoming more closely intertwined.
For companies, these developments feed directly into decisions about where to manufacture, source, invest and sell. A market that looked attractive when the commercial assumptions were stable can look very different when tariffs change, a shipping route becomes unreliable or a government introduces new controls on technology, data or investment.
That is why stability deserves a more explicit place in international market selection.
The idea of a “safe-haven market” is useful here. In financial markets, a safe haven is an asset investors expect to hold its value better during periods of stress. For an international company, the equivalent is a market that can contribute a more predictable operating environment when other parts of the portfolio are exposed to greater volatility.
Australia is worth examining through that lens.
What would make a market a “safe haven”?
No major economy sits outside global disruption, and Australia is highly connected to the system around it.
China remains Australia’s largest trading partner. In 2025, two-way goods and services trade with China was worth A$326 billion and represented 25 per cent of Australia’s total trade. Australia is also an island economy that depends heavily on international shipping, imported technology and global capital flows.
The commercial case rests on the type of exposure Australia can add to a company’s international portfolio.
That matters because many companies are more geographically diversified than they are strategically diversified.
Imagine a company selling across five Asian markets. On a map, that looks reassuringly broad. Look underneath the map and the picture can be very different. Those markets may depend on the same shipping lanes, the same manufacturing networks, similar energy sources, the same major export customer or the same technology platforms. A disruption in one part of that system can affect several countries at once.
The same problem appears in supply chains. A business may have moved final assembly from one country into two or three locations, while the upstream components, raw materials or machinery still come from the same place. The operating footprint has changed, while the underlying concentration remains.
International strategy increasingly needs to account for those correlations.
Why Australia enters the conversation
Australia brings several characteristics that can be valuable in a more volatile international environment.
The first is institutional strength. The World Justice Project ranked Australia 11th out of 143 countries in its 2025 Rule of Law Index. For companies committing capital, employing people, entering contracts or building long-term customer relationships, that has practical value. Predictability around regulation, contract enforcement and the treatment of investors makes planning easier and reduces some of the uncertainty that can undermine a market-entry decision.
The IMF reached a similar conclusion when it assessed how Australia might respond to a combined shock involving higher tariffs, greater policy uncertainty and tighter global financial conditions. Its 2026 Article IV report found that the impact could be significant, while describing the risks as broadly manageable because of Australia’s institutional strength, flexible markets and policy toolkit.
Australia will still feel external shocks. Its economic and institutional system has a reasonable capacity to absorb them.
The second factor is the quality of the domestic market. Australia had a population of about 27.8 million at the end of 2025. That limits the absolute scale available in some sectors, but the market is wealthy, urbanised and accustomed to buying sophisticated products and services from international companies.
For businesses selling technology, professional services, specialised industrial products, premium consumer goods or complex B2B solutions, the purchasing power and maturity of the customer base can offset some of the disadvantages of a smaller population.
The third factor is Australia’s position within the Indo-Pacific commercial system.
Australia has free trade agreements with major economies including the United States, China, Japan, South Korea, India, the United Kingdom and Indonesia. It is also a member of the CPTPP and RCEP, the latter being the world’s largest free trade agreement by members’ GDP.
Foreign companies still need to meet the rules of origin, product classifications and other requirements that apply under each agreement. An Australian entity does not automatically confer preferential access across the region. What the network does provide is a set of established trade relationships connecting Australia with many of the markets international companies are trying to reach.
That combination — a comparatively predictable operating environment with deep links into the Indo-Pacific — can be strategically useful.
A different role in the international portfolio
For some companies, Australia will make sense because of the market opportunity itself. For others, its value may be broader.
A company may still want India because of growth, Vietnam because of manufacturing capability, or Indonesia because of long-term consumer demand. Australia can sit alongside those markets and contribute a different type of exposure.
This is similar to the way investors think about a portfolio. They examine the expected return of each asset, along with how those assets behave in relation to one another when conditions change.
International businesses can apply the same discipline to markets.
A company with 70 per cent of international revenue concentrated in one jurisdiction carries an obvious risk. A company with revenue split across five countries may still have a concentration problem if those markets are exposed to the same trade bloc, energy source, shipping route or geopolitical tension.
The practical question is: what could hit several parts of the business at the same time?
That question belongs in market selection alongside growth, customer demand, margins and cost to serve.
Australia’s limitations still matter
Australia will not suit every business, and the safe-haven argument should not obscure the economics.
The domestic market is relatively small. Labour is expensive. Distance creates freight and travel costs. Regulation can be complex, particularly where state and federal requirements overlap.
The OECD’s 2026 Economic Survey of Australia points to weak productivity growth, strained housing affordability and regulatory fragmentation across states as continuing challenges. Those issues affect operating costs, labour availability and the ease of doing business.
Foreign companies also need to consider sector-specific regulation, foreign investment screening, local employment law, tax, product standards and the cost of establishing an effective sales and distribution model.
Stability is one input into the decision. It still has to sit alongside demand, unit economics, competitive intensity and execution risk.
How to assess whether you need a safe-haven market
For companies reviewing their international footprint, the starting point is to look beyond the number of countries in which they operate.
Ask where your revenue is concentrated. Look at where your critical suppliers are located, including Tier 2 and Tier 3 suppliers where possible. Identify the shipping routes, energy inputs, technology platforms and regulatory regimes on which multiple markets depend.
Then consider whether a single geopolitical event, policy change or supply-chain disruption could affect several parts of the business at once.
It also helps to define the role each market plays in the portfolio.
Some may deliver growth. Others may provide manufacturing scale, access to talent, strategic customers or supply-chain capability. A mature and predictable market can add value by giving the business a steadier source of revenue and a jurisdiction in which longer-term planning is easier.
This is where Australia may deserve a closer look.
For example, a company with manufacturing and sales exposure concentrated across emerging Asian markets may decide that the next market does not need to maximise growth. It may need to provide stronger institutional certainty, access to high-value customers and a different risk profile.
Another company may discover that Australia adds little diversification because its existing revenue, suppliers and customer base already have substantial Australian exposure.
The answer depends on the portfolio you already have.
That is why safe-haven thinking should sit inside a proper market-selection process. It is another way of testing whether a new market improves the overall international business, rather than assessing each country as an isolated opportunity.
A more deliberate way to think about market entry
The Indian-Australian population has helped make the relationship politically visible. Modi’s large community events attract considerable attention, and both governments regularly describe the diaspora as a bridge between the two countries.
Its commercial value deserves equal attention.
Indian-Australian executives, entrepreneurs and advisers bring language skills, professional networks and knowledge of local business practices. Many have direct connections to particular Indian states, cities and industries. They can help Australian companies understand how decisions are made, identify credible partners and navigate differences in regulation, culture and commercial expectations.
This capability is especially useful because India cannot be approached effectively as a single market. Economic conditions, industry strengths, government policy and business practices vary considerably between states. An entry strategy suited to Maharashtra may be inappropriate for Tamil Nadu, Karnataka, Gujarat or Uttar Pradesh.
Australian businesses should make more systematic use of Indian-Australian industry groups, founders, senior executives and professional advisers. Diaspora connections cannot replace commercial due diligence, but they can improve market intelligence and help companies build stronger local networks.
What Australian businesses should understand
The current global environment is making international expansion harder to evaluate. Growth forecasts and market size remain important, but they no longer tell the whole story.
Companies need to understand the risks sitting underneath their geographic footprint and how those risks interact.
Australia will not be the right market for every international business. Its size, cost structure and distance can rule it out for some models. For the right company, however, its combination of institutional strength, a wealthy customer base and deep Indo-Pacific commercial links can give it a useful role in a wider international strategy.
When you review your international footprint, ask whether you are genuinely diversified by risk, or whether the same underlying exposures are simply spread across several countries.
That is becoming an increasingly important distinction in international strategy.
If Australia is one of the markets you are considering, Dearin & Associates helps international companies assess demand, evaluate market-entry options and build a practical strategy for launching and growing in Australia.
