April 2021 – Into India

Pat Cummins role model for how all of us can help India

Many of us in business relations with India are wondering what is the right thing to do in the midst of India suffering so much from the pandemic.

Pat Cummins has showed us what to do.

He is staying because IPL creates some joy for lockdown people – and he has made a big donation.

For business and trade the message is striking – keep in touch, build business relations and where you can, donate to support India.

Cummins has starred for the Kolkata Knight Riders so far this season.

The Australian superstar wrote on Twitter on Monday night to announce a donation in the fight against the virus, and to urge fellow cricketers to donate.

I am reproducing his entire Tweet because it is moving and inspirational:

“India is a country I’ve come to love dearly over the years and the people here are some of the warmest and kindest I’ve ever met.

“To know so many are suffering so much at this time saddens me greatly.

“There has been quite a bit of discussion over here as to whether it is appropriate for the IPL to continue while Covid-19 infection rates remain high. I’m advised that the Indian government is of the view that playing the IPL while the population is in lockdown provides a few hours of joy and respite each day at an otherwise difficult time for the country.

“As players, we are privileged to have a platform that allows us to reach millions of people that we can use for good. With that in mind, I have made a contribution to the “PM Cares Fund”, specifically to purchase oxygen supplies for India’s hospitals.

“I encourage my fellow IPL players – and anyone around else the world who has been touched by India’s passion and generosity – to contribute. I will kick it off with $50,000.

“At times like this it is easy to feel helpless. I’ve certainly felt that of late. But I hope by making this public appeal we can all channel our emotions into action that will bring light into people’s lives.

“I know my donation isn’t much in the grand scheme of things, but I hope it will make a difference to someone.”

Winning in India – less about sales and more about culture and relationships

When a company sends a salesperson into the Indian market, the goal is to fill the order book as quickly as possible – there is no time for that person to build ongoing relationships.

The result at best is a quick transaction based on price. It rarely lasts.

India is a country where relationships drive and impact all aspects of business. That is “how they do things there” and expect us to be the same.

Some tips for relationship building in these tough times:

You can build good relationships during Covid by hosting a zoom or similar catchup to see how things are going – no big agenda, just share experiences and listen.
You can join groups and chambers and be seen as a player.
You can accept the intangibility of relationships and give your key executives time and resources to build them.
You can look up Indian culture, architecture and history so you can have informal conversations about things close to their heart.
You will need strong curiosity and listening skills.

Really, decisions about future business with India need to be C-Suite and Boardroom driven, based around a minimum three-year strategy. And giving your people the right to spend time on the intangible of relationships is the best first step.

Come on India and Australia – time for an FTA to be number 1 priority

It is high time the close friendship between the PM’s Modi and Morrison led to an FTA.

It is great to see so much friendship and collaboration between India and Australia – but it is time to go to another level and have a serious shot at getting a free-trade agreement between the two countries.

Here’s 3 reasons why an FTA is now urgent:

India wants greater access to Australia’s resources.

Australia wants alternatives to China for resources and wine.

India wants investment and Australia has huge funds under management.

Patience around the FTA has been a good approach but now we have to step up the pace and get on with it.

We need some form of harvest agreements to take the heat out of agriculture – which is always a super-hot political topic in India.

Also, India seriously wants investment flows and Australia has not been forthcoming. Time for the Australian Government to lead our huge investment funds into India.

The reality is – close relations in trade mostly follow investment, and Australia has not invested heavily in India.

Wine barriers to India are huge – there is a 150% tariff – and yet wines like Orlando Jacob’s Creek have done well there.

One problem for India is they are encouraging their own wine industry, typically at the low end of the market. Perhaps they can free up tariffs on high end wine imports?

The relationship between Prime Ministers Modi and Morrison is close and could be a building block for an FTA.

Let’s put it top of the agenda!

India’s top ten business cities and what they are known for

Mumbai – beautiful, never sleeps, the financial and commercial capital of India

Mumbai

Mumbai is the ultimate commercial and financial city of India – a true 24/7 powerhouse that never sleeps. It houses the headquarters of a large number of major Indian companies like Tata Group, Reliance Industries, Aditya Birla Group, Larsen & Toubro, Godrej Group, and Hindustan Petroleum among others. The city is also the headquarters of the Reserve Bank of India, National Stock Exchange, Bombay Stock Exchange, and – yes – Bollywood.

GDP (PPP) – 310.0 billion

Delhi

Delhi is the National Capital of India – and on a global scale, it is one of the great capitals of the world. It is also the most populous city of the country. Being the political center, Delhi is home to all the prominent political personalities and officeholders including the President, the Prime Minister, and distinguished ministries. Delhi is a metropolitan city and attracts a large part of the population from all the states. With the ever-growing rates of urbanisation, the city accommodates everyone and has a diversified economy.

GDP (PPP) – 293.6 billion

Kolkata

Kolkata – oh yes, I know it has a reputation as relaxed or even sleepy – but it was the capital of British India and houses India’s oldest stock exchange. Most people are not aware that more than 83 percent of the city’s population is employed in the tertiary sector. Kolkata is the third richest city in South Asia after Mumbai and Delhi. Kolkata is a house of many Indian corporations like Coal India Limited, ITC Limited, Britannia Industries, Allahabad Bank, National Insurance Company, and United Bank of India among others.

GDP (PPP) – 150.1 billion

Chennai

Chennai is one of India’s great southern cities with all the manners, politeness and conservatism that goes with it. It is the capital city of Tamil Nadu and sits by the Bay of Bengal. Given its glorious history and its significance as Madras Presidency during the British rule, Chennai is historically and culturally rich and diverse, attracting tourism in turn. Besides being a pioneer in art, culture, and music.

GDP (PPP) – 110.0 billion

Bengaluru

Bengaluru used to be called the “garden city” but today is better known for massive traffic jams. It has a “young” feel and houses some of India’s most trendy eating and drinking establishments. It contributes more than 35 percent of India’s IT exports. The city also houses some major manufacturing industries like Bharat Heavy Electricals Limited, Bharat Electronics Limited, and Bharat Earth Movers Limited among others. Infosys and Wipro have their headquarters in Bengaluru. The city is home to 8 billionaires.

GDP (PPP) – 86.0 billion

Hyderabad

Hyderabad comes across first as located in a dry and rocky area – but the city is known for its rich history, food, and its multi-lingual culture, both geographically and culturally. The city has an estimated population of around 8 million, making it 4th largest city in India, while the population of the metropolitan area was estimated above 9 million. Religiously and culturally, the city is united with Hindus, Muslims, and Christians.

GDP (PPP) – 75.2 billion

Pune

Pune, a place for learning, thinking and doing. Pune is a city located in the western Indian state of Maharashtra and now closely linked with Mumbai. It is the 8th largest city in India and the second largest in Maharashtra. India’s first Prime Minister called Pune “The Oxford of the East” because Pune attracts students from all over the world. There are a large number of good schools in Pune affiliated either with the Maharashtra State SSC Board or the All-India Indian Certificate of Secondary Education (ICSE) and CBSE boards.

GDP (PPP) – 69.0 billion

Ahmedabad

Ahmedabad was the historic home of Gandhi’s famous ashram and is now a dynamic commercial hub – it is one of the fastest-growing cities and is one of the best cities to live in. Ahmedabad is an economic and industrial hub of India and is the largest city in Gujarat. There are several significant companies located in the city and the place is known for the textile industry. This city attracts a large number of tourists every year as there are several amazing monuments along with numerous modern buildings. Have fun – go there during the amazing kite festival.

GDP (PPP) – 68.0 billion

Surat

Surat is known by several names – the silk city, the diamond city and the clean city – it is one of the cleanest cities in India and is the best developing urban community. Surat has the largest stone cutting and cleaning centers and is especially known for diamonds. Surat has a large textile industry and there are more than 380 dyeing and printing mills with 41,000 power looms.

GDP (PPP) – 59.8 billion

Visakhapatnam

Thankfully known by the shorter name of Vizag, this city manages to combine a powerful steel industry, major port and lots of natural beaty. It is a great economic destination that is also known as the financial capital of Andhra Pradesh. This coastal city is also known for its medication, programming, and pharmaceutical industry.

GDP (PPP) – 43.5 billion

(Thanks to multiple sources including INDIA TODAY for the above)

India adopting digital payments as Covid spurs rapid move away from cash

I am a big fan of The Hindu Business Line and one of their recent reports shows a big shift in India to digital payments – the cash economy, so long a burden for India, is dying out as a result of Covid and long-term Modi Government efforts.

This has massive positive implications for GST income for government.

Business Line reported that ACI Worldwide released a new report that indicated more than 70.3 billion real-time payments transactions were processed globally in 2020, a surge of 41 per cent compared to the previous year.

This comes as the Covid-19 pandemic dramatically accelerated trends away from cash and cheques towards greater reliance on real-time and digital payments, according to the study.

According to the report, India retained the top spot with 25.5 billion real-time payments transactions, followed by China with 15.7 bn transactions.

In 2020, the transaction volume share in India stood at 15.6 per cent and 22.9 per cent for instant payments and other electronic payments respectively, while paper-based payments had a considerable share of 61.4 per cent.

The report speculated that by 2024 the share of real-time payments volume in overall electronic transactions will exceed 50 per cent. This will further touch 71.7 per cent by 2025.

“India’s journey of creating a digital financial infrastructure has been characterized by collaboration between the government, the regulator, banks, and fintech. This has helped to advance the country’s goal of enabling financial inclusion and also provided rapid payment digitization for citizens. The pandemic has further accelerated the adoption of digital payments with many first-time users adopting digital payments and significant uplift by merchants,” said Kaushik Roy, VP, and head of product management, Asia, ME, and Africa, ACI Worldwide.

Melbourne edtech firm TALi launches learning app in India

Pictured is Glenn Smith, MD, TALi Digital

I was pleased to hear from Michelle Wade, Commissioner South Asia at Global Victoria, that Victorian edtech and digital wellness company TALi Digital this week launched their Indian platform via the Times of India. The two apps — the TALi app and TALi TRAIN — are designed to improve children’s attention skills, which are so important for their ability to listen, learn and focus on tasks at home and at school. Targeting children aged 3-8.

As Michelle wrote on Linked In – “Very proud of our team, and particularly Annie Santhana, Gopi Shankar and Stuart Bland for the many months’ work and continued support to Tali Digital.”

Well done!

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IMF Projects India’s Growth Rate to Jump to Impressive 12.5 Per Cent in 2021

My good friend Mugunthan Siva is the CEO of India Avenue Investment Management – an India and Australia investment company – and he has advised me of great news for the Indian economy and investors.

The International Monetary Fund is now forecasting India to grow GDP at 12.5% in 2021 – the only double digit forecast amongst developed and emerging economies.

Expected global growth of 6% will also play a role in India’s growth given its incrementally increasing role in supply chains, the rise again of the IT outsourcing industry and its strength in pharmaceutical manufacture and export.

In 2022 the IMF forecasts a further 6.9% GDP growth for India – once again the leader of the pack. If India continues to grow like this the US$5tn goal of the Modi’s Government appears within reach in the next 4-5 years.

According to Mugunthan, India’s equity market is evolving nicely given the pivot post COVID. Market breadth has normalised and active managers are dominating the landscape again, as they should in an inefficient equity market like India’s. The next 3 years should see a strong recovery in corporate profit.

India to become the 3rd largest economy and “sweet spot” for investors over next decade

Indranil Sen Gupta, BofA Securities

Indranil Sen Gupta, BofA Securities, recently expressed the view that India is likely to become the 3rd largest economy over this decade. This will be driven by:
– sweetspot for the demographic dividend
– significant FX reserves to protect the economy
– 9-10% nominal GDP growth over the decade
– Low interest rates will lead to the next capex cycle, earnings growth

He said: “We see the economy growing at 9% nominal, that is 6% growth, 5% inflation, and 2% depreciation for the next two years. There are three drivers. The demographic dividend which we have all been talking about for the last 15 to 20 years is actually going to kick in from 2020 and help savings and investments. Secondly, there is financial deepening. Compare it to GDP ratio, which is around 40 to 50 per cent of GDP, should jump almost 100%. And thirdly, there is the emergence of mass markets, which the US probably saw 100 years ago. For example, the price of an entry level car today is 2.5x down from 14x 20 years ago. We think that is close to 1x on export basis.”