Month: April 2023

6 big changes in India – and 5 reasons growth will boom

Only 8% of Indian households own a car – so big growth is ahead

INTO INDIA has consistently said India is the growth story of this century.

Now Anish Mathew, CEO and CIO of the very successful Sundaram Asset Management Singapore Pte Ltd, has found a unique way to describe why India is indeed THE growth story.

6 big changes in India

  • The number of income tax filers has increased by 57.5% between FY15 and FY21.  This is obviously the impact of the growing use of Aadhar (biometric unique identity card) as the preferred KYC document and the implementation of GST, both of which is pushing up the tax compliance in the country.  
  • Indirect (GST) tax base stood at 14mn in November 2022, a 2.3x increase from mid 2017.   
  • Number of PAN cards (unique tax identity number issued by the Income Tax Department) allotted has increased by 2.5x in the last 7 years.
  • 80% of the railway tracks were electrified as of end FY22 as compared to 31% in FY11.
  • Road infrastructure measured in number of kilometres has increased by 36.6% in the last 11 years.
  • Major port capacity has nearly doubled in the last 8 years.

5 reasons growth will boom

  • Only 8% of the households owned a car, 24% an air conditioner and 38% a refrigerator.
  • Only 1% of Indians account for 45% of all flights.
  • Only 3% of Indians make up all unique card holders.
  • Only 2.6% of Indians invest in mutual funds.
  • The Indian diaspora remitted USD 100bn into the country in 2022, eclipsing the gross FDI flow during the same period. 

Mathew advises that the three big growth drivers for the next decade are consumption (driven by the Demographic Dividend and rising incomes); manufacturing, and; digitisation (which is the formalisation of the Indian economy)

He makes a powerful case for investment and trade with India.

Indians becoming more influential in Australia as a leading source of migrants and students

Indian-Australian MP Daniel Mookhey takes oath on the Bhagavad Gita

As the UN releases data that India has become the most populous nation on the planet, our Indian diaspora in Australia also continues to grow in size and influence.

The recent NSW state election saw Indian-Australian MP Daniel Mookhey elevated to Treasurer, the first MP in Australia to take the oath on the Bhagavad Gita.

Pru Car, also of Indian origin, became Deputy Premier of NSW and Charishma Kaliyanda became the first Indian born Australian to be elected to the NSW Parliament’s Legislative Assembly.

The Australian Bureau of Statistics reported that India has become the leading source country for permanent migrants, overtaking China and the United Kingdom. The latest ABS figures reveal one in five skilled migrants were born in India (20%), highlighting the strong presence of Indian skilled workers in Australia’s workforce.

And India is now second in the top five countries of origin for international students in Australia in 2022 –  China (155,348 students), followed by India (99,739), Nepal (56,847) Vietnam (22,396), and Colombia (21,836). These students accounted for 58 percent of all international students in the country, Erudera.com reports.

The India-story in Australia continues to write new and better chapters.

(Special thanks to The Hon Lisa Singh, CEO, Australia India Institute, for most of the above data)

India and Australia share strategic interests in the Indian Ocean, not so much in the “Indo-Pacific”

Russian Deputy PM Denis Manturov this week in Delhi announced India and Russia are close to an FTA – further evidence of India’s “Multi-Alignment”

INTO INDIA was so pleased to see Economics Correspondent for The Age, Matt Wade, today writing about the shared Indian Ocean region strategic interests of India and Australia.

https://www.theage.com.au/world/asia/india-is-now-the-world-s-most-populous-nation-it-s-time-we-got-to-know-it-better-20230417-p5d15h.html

This is such a refreshing shift from the rhetoric about the QUAD (India, Australia< Japan and USA) so called strategic alignment for the “Indo-Pacific Region”.

One of the clumsiest terms of recent diplomacy has been the concept of an “Indo-Pacific Region”. A quick glance at a map shows this to be wide of the mark.

But the same glance at the map will quickly show why India and Australia worry about the Indian Ocean region – they both need this area to be safe and open for maritime activity and stable for economic development. It is also realistic for these two countries to combine for peace and stability in the Indian Ocean.

It is just not realistic to expect India to share in security interests for the Pacific.

India has traditionally been a “non-alignment” country, which happens to be close in defence to Russia.

It is now promoting the concept of “Multi-Alignment”. Of course, the USA (and Australia) do not understand this at all, believing in the power of taking sides.

That is why they have been so hopeful that India coming into the QUAD is a sign of India shifting towards “taking sides” and moving “our” way.

Not happening.

Here is one piece of evidence that India maintains an independent and “Multi-Alignment” program – at a time when the western alliance is condemning Russia, this week India and Russia have announced progress towards a free trade agreement, to build stronger trade and investment in both countries – according to Russia’s deputy prime minister Denis Manturov, speaking at an event in New Delhi with India’s foreign minister S Jaishankar on Monday.

There you go. Multi-alignment is the modern incarnation of India’s historic “Non-alignment”.

We will have to get used to it.

Vital connectivity for India depends on progress in the “north east states” region

India’s “north east region” has long been neglected and is little known among western leaders – but it has a crucial future because of the role it can play in India’s strategic and commercial connectivity in the surrounding region.

The role of China in the Indo-Pacific increases the focus on this sensitive region.

India is now giving the NER priority – there are around 30 major road and highway links under construction, a complex process when border crossings are involved. There are also around 10 major railway construction projects including bridges and new lines.

This has been so well described by Sreeparna Banerjee and Ambar Kumar Ghosh, “India’s Northeast: Gateway to Connectivity with Eastern Neighbours,” ORF Occasional Paper No. 395, March 2023, Observer Research Foundation.

India’s Northeast: Gateway to Connectivity with Eastern Neighbours

India’s northeast consists of eight states—Arunachal Pradesh, Assam, Manipur, Tripura, Sikkim, Mizoram, Meghalaya, and Nagaland. It shares 5,812 km of international boundaries with the neighbouring countries of Myanmar, China, Bangladesh, Nepal, and Bhutan. It is landlocked; seven of the eight states are linked to the rest of India only through the Siliguri Corridor in North Bengal—a narrow strip of land (22-km wide) that is also called the ‘Chicken’s Neck’. The corridor is flanked by Nepal in the north and Bangladesh in the south.

This region can serve as a pivotal connecting space between India and its neighbours to the east in South Asia, as well as to East and Southeast Asia and beyond, enhancing the country’s diplomatic, infrastructural, and commercial engagements.

India’s foreign policy priorities, reflected in its ‘Act East’ and ‘Neighbourhood First’ policies, also bring the northeast into focus as a connectivity gateway to the wider Indo-Pacific.

Japan, with its long-standing expertise in the infrastructure sector, continues to play a significant role in developing physical connectivity projects within and across the northeast.

Australia shares many of the strategic goals of India, and now through the QUAD (India, Australia, Japan and USA) the countries are closer together through their commitment to democracy, open and free cultures and more.

The focus on this region will continue – India is crucially positioned within South Asia and in the broader Bay of Bengal region. It needs to play a more vibrant role in the region, and to do so, must engage more strongly with its East and Southeast Asian neighbours.

Watch this space…