February 2020 – Into India

Canada boosts student numbers and gains in diversification of source countries

Canada welcomed more than 400,000 new international students at all study levels in 2019, with Indian student enrolments accounting for most of the increase in new study permits issued.

More important than the increase – Canada is succeeding in diversification of source countries. This has become a “top priority” for Canada.

These students were for university, colleges and K-12 schools.

Immigration, Refugees and Citizenship Canada statistics show that 404,165 individuals were issued study permits in 2019, an increase of almost 50,000 on the previous year. In 2018, 355,100 new study permits were issued.

Although total figures for the 2019 student population are yet to be released, this new data indicates that the entire international student population in Canada now exceeds 600,000, according to one analyst.

The statistics reveal that 139,740 Indian students were issued study permits in 2019 – up from 107,175 in 2018 – and Indian citizens represent 35% of all 2019 new study permits.

The second biggest cohort came from China with 84,710 permits, marking a decrease on 2018 figures where 85,165 Chinese students were given study permits.

Iran (+39% to 9,795), Nigeria (+16% to 7,585), France (+9% to 14,670) all showed increases of study permits becoming effective in 2019, compared with 2018.

Other countries represented in the top 10 such as South Korea, Brazil, the US and Japan have remained stable, while Vietnam decreased slightly on 2018 figures.

Rounding off the top 15, the Philippines, Mexico, Bangladesh, Colombia and Taiwan all saw increases, with new study permits for the Philippines notably increasing by 56% to a total of 6,365 in 2019.

In 2018, just 40% of active study permits in Canada were for university study – the rest for students at colleges, Quebec’s CEGEPs or at K-12 schools, Universities Canada highlighted.

Although the 2019 breakdown is not yet available, the organisation expects a similar division.

“With the caveat that these new numbers reflect the system as a whole, rather than just university enrolments, Canadian universities are pleased to see continued growth in the number of students choosing Canada as their study destination,” explained assistant director of International Relations at Universities Canada, Cindy McIntyre.

Source: The PIE News

“Namaste Trump” good diplomacy for India but differences with USA remain

Can India make the most out of US President Donald Trump’s visit?

“Namaste Trump” this week been a great visit for India and looks to have been celebrated across the nation. Two leaders of great democracies.

But differences still exist, and the question is can India and PM Modi build on President Trump’s historic visit which took place this week?

PM Modi will drive the relationship, but he is not alone.

One man in South Block — Harsh Vardhan Shringla, India’s foreign secretary – will make a big contribution to the outcome.

India’s foreign secretary is seen as a calm and composed officer, and he has handled bilateral ties even during turbulent times as the Indian ambassador to the US.

It was he who dreamed up and led the “Howdy, Modi!” event in Houston.

Now he has a lot of the responsibility of making “Namaste Trump” a success.

What will be the big issues? Top of the list is a free-trade agreement and disagreements on intellectual property rights. Plus how both countries feel about and react to China.

But clearly Namaste Trump is a big win for India and PM Modi and a mark of the increasing respect India has on the global stage.

Indian PM Modi and US President Trump – two men who enjoy centre stage and get on well

India in the frame is it plans to open education to foreign investors and institutions

Global education is watching as India moves to allow foreign investments in education.

The recent Union Budget signalled India plans to ease rules on foreign investments in education and open up the regulated sector. The budget proposed to encourage foreign direct investment and external commercial borrowings (ECBs) in education.

It is timely – India’s education sector is “capital starved”.

We have to wait for the actual rules, but it looks like the government may allow foreign education players to repatriate a portion of their income in India instead of requiring them to plough back all their earnings into their Indian operations. This would remove a key restriction that academics and experts have flagged for years as a disincentive to foreign investment in education.

The outcome of all this could be more global investment into existing Indian institutions, plus more foreign education institutions opening up in India.

This would be change on a radical scale. It’s needed – India’s education sector is struggling at all levels.

Finance Minister Nirmala Sitharaman (pictured above) said in her budget speech: “It is felt that our education system needs greater inflow of finance to attract talented teachers, innovate and build better labs”.

Please note – though FDI in education through the automatic route is already allowed, it has largely remained confined to the unregulated education technology space.

Expect innovation. Many European campuses are looking at opening special centres within Indian partner universities, rather than going it alone.

Plus greater global collaboration in delivering degrees could be a great outcome – so the student experiences both the Indian and the overseas providers.

So – here is what we are waiting for – the Centre needs to frame rules to ease both fund flow to India and institutional collaboration and how a foreign educational player investing in India will be allowed to take back money that they make in India.

Watch this space…

Trump to open Indian cricket stadium bigger than the MCG – not “fake news” – it will happen next week

Trump and Modi are good at surprises.

How about this? US President Trump will make his first visit to India next week and will open a new cricket stadium set to “dislodge the Melbourne Cricket Ground” as the world’s biggest cricket stadium. The Motera Stadium in Gujarat can take 110,000 spectators.

Interesting combination – look forward to seeing the Indians explaining the game of cricket to President Trump.

But sometimes these two are also predictable.

Australia knows very well the difficulty of getting a free trade deal with India – and so do the Americans (although their “America first” attitude makes negotiation difficult).

Nisha Biswal, president of the U.S.-India Business Council, said hopes were fading for the two sides to quickly bridge gaps in their efforts to restore some U.S. trade preferences for India and improve access for selected U.S. agriculture products and medical devices to India’s 1.3 billion consumers.

Still, PM Modi is good at using charm and relationship as a part of diplomacy so you can expect him to pull out all the stops for the visit of President Trump.

Melbourne seminar on India has best expert panel

BDO has assembled Melbourne’s best India panel to speak on Tuesday 3 March – book now – free event. Email michaelm@eastwestadvisers.net

They have a great line-up of speakers:
• Michelle Wade, Victorian Trade Commissioner for India, Bengaluru
• Susan Coles, Deputy State Director, Victoria, Department of Foreign Affairs and Trade
• Bill Cole, Partner International, BDO
• Sandeep Khurana, Director, EastWest Advisers
• Michael Moignard, Director, EastWest Advisers

I am proud to be the MC of this one.

Venue: BDO, 727 Collins Street Melbourne
Date: Tuesday 3 March 2020
Time: 12 noon start (lunch will be provided)
Email michaelm@eastwestadvisers.net

Pictured below: Bill Cole, Partner International, BDO

EV’s and charging stations boosted in India

Two announcements have given a great promotion to Electric Vehicles in India.

First, the Government has lowered the GST rate on EV’s to 5% from the standard 12%.

Second, leading company Tata Power will increase its network of electric vehicle charging stations to 700 by next year.

The company which has already installed 100 fast charging stations in various cities, including Delhi, Mumbai, Bengaluru, Pune and Hyderabad.

The company is not only targeting the public spaces but will also offering home EV charging stations.

The company is also in talks with metro rail authorities and municipal corporations for setting up EV charging stations. Moreover, it will set up charging stations at Tata Group owned outlets such as Chroma, WestSide, Titan watch showrooms and Indian Hotels.

Pictured is a trial solar powered EV charge station in India

7 strategies for India market entry 2020

Find the affluent millennials

India is home to the world’s largest population of millennials—typically defined as those aged 18-35. At 450 million, these millennials are influencing the way Indians eat, shop, commute and buy, much like their global counterparts. They are the first upwardly mobile group in recent history of India – and will have an impact very like the way western baby boomers changed most things.

According to Santosh Desai, managing director of Indian Brand Advisory Group Futurebrands, Indians used to be “born something” but now can “become something”.

Drill down to the real middle-class market

We know India has 1.3 billion people, but if you think too much about this you will get nowhere. Drill down to find your market.

For example, some estimate the “middle class” as high as 300 million. For me, this is way too high. Austrade takes a dimmer view – it estimates that there are approximately 30 – 80 million people in our target demographic, many of whom live outside Tier 1 cities. That’s a big range from 30 to 80, which shows that we just do not know. But for me Austrade’s numbers are too low.

Austrade looks for consumers that:

can afford international travel to destinations, like Australia;
can afford to send their children for study abroad; and
can afford to eat at high-end restaurants and hotels or eat significant amounts of imported food and wine at home

Think of India as many markets

Thinking of India as “one market” will slow down your impact and waste your marketing efforts. First, there is the divide between north, south, east and west. Then there are big metropolises (8-10) and hundreds of tier two cities (around one million plus). Then there are over 26 different languages, multiple food cultures, differing beliefs and interests. It is complex, so build that into your “many markets” strategy.

Consumerism is changing in India

India had just 9 Shopping Malls in 2007. There are over 350 Shopping Malls in 2019. Plus 85 new Shopping Malls will be built in the next 5 years = 435 Shopping Malls in 2025.

Add to this that online retail is taking off, with Amazon and the local Flipkart leading the way – Indian consumers use cell phones for online access.

Dr Mark Morley Trade Commissioner India Government of Australia makes a key point about opportunities for us: “Australia is well positioned with the Indian consumer. Across India, we have a great reputation for clean, safe and reliable supply. We are well known as a premium supplier of produce, and we have a global reputation for our quality brands.”

Thinking local is a good way to start

Especially for those in food, beverages, education and fashion, your beginnings for India can start right here in Australia.

About 650,000 Australians claim Indian ancestry, and we have over 65,000 Indian students here, which means a significant local market spending money. Add to that the growth in Indian tourists – up to over 300,000 per year and growing at around 15%. This gives you a good market testing opportunity.

Collaboration is the new relationship

If you just want to “sell” to India, sharpen your pencil and think short term – sooner rather than later, India will find an alternative to you.

To be in India for the long term, seek genuine opportunities to collaborate with Indians – once you and Indian collaborators are working together, your future is more secure. This is how Indians prefer to operate, so drop “transactional” thinking and focus on “collaboration” – it is the new relationship.

Give India the time it needs

Cultures based on relationship (collaboration) are slower to move, so give India at least three years. You might “sell” sooner, but for most this is a very short-term market entry approach.

India FY20-21 Union Budget

Commentary by India Avenue India Avenue Investment Management (IAIM) – a boutique investment company focused on providing investment solutions for clients in Australia and New Zealand who seek exposure to India’s growth potential through its capital markets. The India Avenue Equity Fund is managed by the team at IAIM and has a bias towards companies which are experiencing strong growth through rising local demand.

The Government of India (GoI) is currently stuck in a dilemma between managing a challenging economic environment (slow growth, rising inflation and weak tax revenues) whilst maintaining fiscal prudence. Hence it was of little surprise to us that whilst the budget continued with its infrastructure push, simplification of the personal tax regime for middle income taxpayers and improvising ease of doing business, to a large extent their hands were tied.

This is evident from the fact that the Budget off balance sheet funding has grown 8% over FY20. Having said that, we expect that spending will likely pick up significantly in FY21 (April 2020-March 2021). Below are some of the key aspects of this year’s budget.

Fiscal Deficit

GoI raised the FY20 fiscal deficit target to 3.8% of GDP from 3.3% set earlier. The fiscal deficit target for FY21 was set at 3.5% of GDP.

Disinvestment

GoI raised the divestment target to INR 2.1tn (USD 29bn), more than double the previous year’s target of INR 1.05tn (USD 15.2bn). Privatisation examples include a few big ticket SOE’s like Bharat Petroleum Corporation Limited and a stake sale via an IPO of India’s largest life insurance player, Life Insurance Corporation of India.

Taxation

A 100% tax break was offered for sovereign wealth funds for investment in infrastructure. A reduced tax rate of 15% for new power generation investment. Removal of dividend distribution tax at the hands of the company and charging it in the hands of shareholders at their individual rates (particularly beneficial to foreign companies as they are subject to a withholding tax of merely 5-10%).

Infrastructure

The GoI continues to emphasise infrastructure as its key development focus. Key areas include building 100 more airports by 2024, development of 9,000kms of economic corridors, 2,000kms of coastal roads connecting ports and 2,000 kms of strategic highways.

Measures to attract foreign capital

Proposal to increase foreign portfolio investor limits in corporate bonds from 9% to 15%. Tax exemptions for Sovereign Wealth Funds fulfilling certain conditions, for dividends, interest and long-term capital gains arising from a debt or equity investment made in India.

Our View

The slowing economy and the Government’s current constraints to spend its way out of the slowdown remains a concern. This had led to a large dichotomy in returns with investors seeking “safety” in Large cap names. Names outside the top-15 have fallen significantly and priced in this concern over the last 2 years whilst India’s mega caps reach all time high prices and valuations. We emphasise that India is a not simply a beta story, as the country rapidly changes, typical of an emerging market country. India today will look markedly different in 5 years’ time and astute investors need to be ahead of the curve to fully participate in India’s ascent to the 3rd largest economy by 2025.

Commentary by India Avenue Investment Management (IAIM)

How Indian use of English can show cultural differences among English speaking nations

A recent headline in the Economic Times read: “India budget – what all has the Government promised”.

For western English speakers, the “what all” demonstrates a slight difference in how English is used in India. I am not saying anyone is right or wrong here, but language can remind us that although we might speak English, we think first as a westerner or an Indian or other part of Asia. Western media would say “what has the government…”

At the least it is entertaining – at most it provides cultural insights.

At functions in India you will see two signs “Veg and non-veg”. This shows how important food choices are over there.

Pictured is the vegetarian Jumbo King Food outlet in Mumbai

Young Indians will often refer to non-relative individuals as “Auntie” or “Uncle” as a sign of affection.

“Timepass’ is a terrific Indian-English creation – used to describe a Bollywood movie or TV show that was just OK. How was the movie – Oh you know, timepass.

When an Indian talks about “mugging” it is generally not about thugs or criminals – it describes rote learning, memorising, cramming.

In a crowded country, “kindly adjust” is a common phrase which means “sorry about any inconvenience but there is not much I can do about it now”. Especially useful on trains.

Pictured is Ahmedabad station where “kindly adjust’ comes in handy

Conversations can often include “rest is fine” which comes after a short description of what is happening in your life and “rest is fine” is an all purpose summary of the rest.

“What is your good name” is one I love – such a respectful way to ask a person’s name.

Brian Johnston recently wrote in this topic in Traveller.

He said a simple sign in a Delhi temple said “Ill manner of all kinds is intolerable”. Admonishment or observation? Intolerable, but is it tolerated?

Indians, he says, have a Shakespearean knack for new variations of words – upgradation, pin-drop silence, and “Mention not!” when you offer praise.

More – she is pulling your legs. Pay attention on. Discuss about. She’ll be knowing the answer.

How about “Don’t prepone it – do the needful!” By the way, “Prepone” is much shorter than “”Do you want to bring our meeting forward a day?” Prepone is now in the Oxford English dictionary.

Words such as hullabaloo, hoary, gallivanting, thrice and scurrilous continue to thrive in India.

Johnston says: “Indian English conforms to its own proper rules of grammar and vocabulary”.

He makes the point that English is no longer controlled by the small number who originally spoke it. Native speakers of English (450 million) are way outnumbered by non-native speakers (at least 1 billion).

In India you can order “hot hot coffee”. A travel guide might refer to the wonderful India Gate in Delhi as “big and enormous” – that is huge!

(I am pictured in November in front of the “big and enormous” India Gate in Delhi)

China of course has its own English, often dispensing with subjects (can or can not!) or verbs (this chilly crab delicious).

India and China both use “is it” in questions – “you are leaving now, is it?”

On the road in India is entertaining – “Horn please!” is the instruction on mountain bends and on the back of trucks. “Faster will see disaster” it a beautiful use of English as is “Always alert, accident avert”. Also – “Road is hilly, don’t be silly”

Pictured above – colourful back end of a truck in India

My favourite is the sign off used in emails and letters – “We will revert with the necessary”. Says it all.

(Thanks in part to Brian Johnston and Traveller 1 February 2020)

India budget revives “Modinomics”

Has “Modinomics” been given a boost by the Indian budget?

A couple of highlights from the recent Indian budget make me think the PM Narendra Modi might have found his economic mojo again.

Here’s one – 100 more airports will be developed by 2024 – that is a big number!

Pictured above – Mumbai and Delhi airports

The Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman, while presenting the Union Budget 2020-21 in Parliament said that infrastructure was crucial to the theme of “Economic development” and hence the Budget is dedicated to providing “Ease of Living” to all citizens.

Here’s another – Indian Sea Ports will receive funding for technology to improve their performance and the government is considering corporatizing at least one major port and subsequently listing on the stock exchanges.

Here’s a third example – a national gas grid, expanding to 27,000 km plus states to introduce “Smart Meters” plus a corporate tax rate of 15 per cent for new domestic companies generating electricity.

Just my quick take on the budget, which seems to have found the Modi economic mojo again.