Agarwal's Bhoruka Group is also keen to explore the possible use of biomass, such as the residue from vineyards citrus orchards and sugar cane farms, to generate power.

The project would benefit this rural town with the creation of 65 direct jobs in phase one, and up to 500 indirect jobs in the construction, transport and logistics sectors.

Almost 15,000 truckloads or rail container movements a year would be needed to carry 350,000 tonnes of raw materials and finished products.

'Once the plant is up and running, we expect to spend more than A$60 million a year buying raw materials and other products from the Riverina region,' Saxena said.

He envisages farmers in the region will plant an extra 75,000 hectares of crops to deliver 100,000 tonnes of oilseed to the crushing plant and another 50,000 hectares will be planted in other parts of Australia.

'Safflower oilseed will give farmers an option to plant up to August on a fixed price contract,' said Saxena, who has earlier run large food and agribusiness ventures for multinationals such as Unilever and Bakrie, and for India's Thapar Group.

'It's a product, which is both water-efficient and good for crop rotation. Soybean will replace imports and give farmers a summer crop.'

Both Agarwal and Saxena say Australia has high level of technical skills in agriculture and it is much cheaper and easier to value add to the raw material here, convert it into oil and then ship it overseas direct into the export markets.

For example, in India, oil seeds incur 35 per cent import duty whereas edible oil has no duty on it.

Riverina Oils founding partners include Ravi Uppal, who is executive director heading the power division of Larsen and Toubro. State Bank of India is providing the finance - its first greenfield financing project in Australia.