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Let’s engage with India

Why get closer to India? About 600 million people, more than half India’s population, are under 25 years old; no country has more young people. Remember the economic impact of the western “baby boom”? It is time the west moved closer to India in trade, culture and tourism. What do you think? As the great Indian philosopher Rabindranath Tagore said: “You can’t cross the sea merely by standing and staring at the water.”

Stephen Manallack is a Director of India strategy consultants the EastWest Academy Pty Ltd and compiled the secrets of Indian business success and cross cultural issues while preparing his book for the Indian market, Soft Skills for a Flat World (Tata McGraw-Hill). He has led several trade missions to India and is a Cross-Cultural Trainer. 

Bengaluru is India’s “must visit” city for all kinds of tech

New research based on data by Dealroom.co data and analysis by London & Partners – the Mayor of London’s international trade and investment agency – found Bengaluru as the world’s fastest growing tech ecosytem.

Bengaluru, often dubbed the Silicon Valley of India, has firmly cemented its tech credentials. The second Indian city was Mumbai, which made it into the top 10 fast-growing ranking at sixth place.

While Bengaluru, the capital city of the southern Indian state of Karnataka, grew 5.4 times from $1.3 billion in 2016 to $7.2 billion in 2020, the Maharashtra capital of Mumbai grew 1.7 times from $0.7 billion to $1.2 billion in the same period.

Bengaluru is also ranked sixth for the world’s tech venture capitalist (VC) investments, on a global list topped by Beijing and San Francisco, New York, Shanghai and London making up the top five. Mumbai comes in at No. 21 in the worldwide ranking, with Boston and Singapore among the other high-ranking cities.

Bengaluru is dynamic and global in feel, with sleek offices and countless quality bars and restaurants.

It used to be India’s “garden city” but has become a global “tech city”.

For EdTech, MedTech, AgriTech and in fact “any Tech”, Bengaluru is your India starting point.

It is also home to the dynamic Victorian Government Business Office led by Michelle Wade – essential to talk with them about your India entry plans.

Doing Business in India – Finding the Right Local Partner


 Most case studies of Australian businesses succeeding in India reveal one key element – finding the right local partner.

What is the right local partner?

It is much more than someone who says “yes”. Too many have been frustrated in Indian market entry because they forged alliances with any and everyone who said “yes” – which means everyone they meet. India is a culture that cannot say no, so be wary of the yes answer.

The right partner is already active and successful in your field. They can show you their track record.

Your right partner will have connections among suppliers and customers, and will be keen to introduce you to them so you can form your own judgement.

In the collective culture of India, your right partner will be well connected in the various business chambers and will have good connections in government – central and state. This right partner will demonstrate these connections by organising meetings for you, rather than just saying “yes” we are connected.

Your right partner will be someone you double check with Austrade and with other reliable connections you have in India or Australia.

Your right partner could ultimately become an agent, a joint venture or more. They might just be a trusted individual who willingly offers to make connects for you – this freely opening doors does occur in India.

Your right partner might be a talented individual who you hire into your business. Or it might be a combination of external and internal. Patience will be your best friend as you make these choices.

Finally, your right partner will develop relationships for you – because in Indian culture relationships matter. Relationships first, business second is the path to long term business in India. Quick deals are just that – one transaction that might not lead to anything.

So, how are you going finding the right partner in India?
 

Despite a shift towards USA and Japan, India maintains close friendship with Russia and a “multipolar” world view

External Affairs Minister S Jaishankar along with Russian Foreign Minister Sergey Lavrov address a joint press conference, in Moscow. The visit was aimed more at reiterating the importance both nations accord each other.

India has long been able to see both sides of an argument in international affairs – and today is a champion of a multipolar global order.

This frustrates countries like the USA and Australia, which clearly see the world in terms of goodies and baddies – for them, the world order is either run by “us or them”.

India’s independent approach was seen in the recent reinforcement of its long held close friendship with Russia. At a time when the rise of China has pushed India into closer relations with the US and Japan, the Indian External Affairs Minister, Dr S Jaishankar held a three day visit to Russia, to reassure an old friend.

Russia could be described as India’s oldest and strongest allies since independence.

“I think what makes our working together so natural and comfortable is our belief in a multipolar global order,” Jaishankar said.

In the complexity of our pandemic world, “multipolar” could be something that takes us forward in peace.

Can India teach the west and China about co-existence?

With India’s role as a rising power, plus its long record of peaceful co-existence with multiple countries, can it help the west and China live together?

Here is the situation as outlined by Michael Spence, a Nobel laureate in economics, Professor of Economics Emeritus and a former dean of the Graduate School of Business at Stanford University:

“At the recent G7 and NATO gatherings, China was singled out as a strategic competitor, a calculating trading partner, a technological and national-security threat, a human-rights violator, and a champion of authoritarianism globally.”

Not a great recipe for co-existence.

Spence continues: “China denounced these characterizations, which its embassy in the United Kingdom called “lies, rumors, and baseless accusations.” The risks that such rhetoric poses should not be underestimated.”

Also not a recipe for co-existence.

He concludes: ” The real danger, however, is that officials on both sides seem to have embraced a zero-sum framework, according to which the two sides cannot simply co-exist; one side must “win.”

But India has long experience of getting along with all sorts of regimes and managing to see both sides of the argument.

As India plays a bigger role in global groupings, can it influence both the west and China to drop “zero sum” thinking and work to co-exist?

10 tips for creating trusting cross-cultural teams

No trust, no team.

When trust is absent, you do not have a working team.

Creating teams across cultures is not easy – and even once you have trust, you can accidentally break it in one meeting.

Why?

Communication styles differ across cultures. Some (like Australia) are blunt and direct. Others (like India) are very polite and indirect.

Some cultures (USA and others) like a lot of social talk before getting down to business. Others prefer business first.

Add to this differences over how to give feedback and disagreements in public and you have a potential minefield that will destroy trust in an instant.

We know that diversity has an upside and succeeding across borders is a business imperative.

So, how do you avoid destroying trust? My 10 tips:

First, learn about cultural differences. Ignorance is your own personal enemy. Too many global business leaders have little or no awareness of differing cultures. It is time to change by learning about these cultures.

Second, creating a strong starting point is essential – which means having a clear direction and an optimistic and compelling goal.

Third, ensure that at least some of the team members have been trained in cultural difference and can operate successfully across cultures.

Fourth, encouraging your team to be curious, adaptable, caring and friendly – leaders can do this by showing these characteristics themselves.

Fifth, be specifically aware of the potential explosive points of the different cultures represented in the team. This makes team leaders aware of what can go wrong, what can be misunderstood and how to involve and encourage team members who are from cultures that are reserved and indirect. If conflict does arise, address it straight away in a calm and friendly way.

Sixth, help the team understand the differences between cultures in terms of giving feedback – Australians on the team will generally be very direct, while Indians on the team will be more cautious and indirect with feedback. Talking these differences through can help both sides.

Seventh, based on the trust created by the above, team leaders can establish team standards and norms that everyone commits to sticking to. This will mean for several team members that they have to adapt from their cultural norm. If it is seen that the whole team is adapting, it becomes a shared and positive experience. If I am the only one in the team adapting, it is just no fun and will not last.

Eighth, watch out for cultural differences over starting times – this will cause simmering divisions in the team. Westerners will generally be on time and expect everyone else to be on time too. Other cultures will arrive late and be surprised that others are already there. Create an agreed standard for the starting time and everything else has a better chance of success.

Ninth, have a predictable and mutually agreed timetable for information sharing, such as zoom meetings, email information, one-on-one sessions and physical meetings. Some cultures do not respond well to variations and unpredictability – so try for stability but also allow for those urgent meetings that just need to occur.

Tenth, work hard on creating personal connections with every member of the team. This can take time and seems like a distraction to many leaders, but it is your strongest tool in reducing conflict in cross-cultural teams. Know what their non-work interests are and you will be surprised how well you connect.  

India’s biggest employer to adopt “hybrid plus” model for work after Covid

Tata Sons Pvt Chairman, Mr. Natarajan Chandrasekaran, recently stated that the pandemic has transformed the nature of how employees and organisations work and boosted the adoption of digital technologies.

It is also driving a hybrid model where work broadens beyond offices and employs more women.

This signals a future where workplaces offer staff greater flexibility, while leveraging technology.

Last year the groups IT consultancy, Tata Consultancy Services, announced the aim to have only a fourth of its employees working from office on any given day by 2025.

Mr. Chandrasekaran said, “Let us not limit ourselves to only home and office when it is the hybrid model that has work. There might be a ‘satellite office’, a concept of third place, that could emerge in future.”

Mr. Chandrasekaran stated, in India’s situation, it could also witness advanced workplace diversity (employment of women), another positive result of a hybrid model.

He added, “Only 23% of women who could be possibly working are employed due to challenges such as the lack of social infrastructure, commuting, etc. We should leverage this potential opportunity to grow and expand.”

India a prime target for Aussie exports and investment – Austrade

Austrade’s Ashley Brosnan puts the case for Australian businesses to quickly get into India:

Australian businesses continue to see opportunities across a range of sectors including education, mining and resources, infrastructure, agri-food, and digital services. Thanks to the steady success of some great Australian brands, Australia is already a trusted supplier and investor.

However, India remains a challenging place do business. Expansion requires a high degree of market literacy and on-the-ground experience. Local partners help exporters and investors to navigate markets and regulation – and these partners can prove invaluable.

Despite this, the Government of India has signalled that India is ‘open for business’. It is emphasising investment and competitiveness as factors that will support the economy and encourage a return to growth.

The effects can be observed already in global rankings. India has moved up 63 places in the World Bank ‘ease of doing business’ rankings in recent years.

Austrade is helping Australian companies to explore India

The Australian Government is investing heavily in developing commercial links between Australia and India. The Australia-India Comprehensive Strategic Partnership agreed by Prime Ministers in June 2020 creates further opportunities for Australian business.

The Partnership seeks to build supply chain resilience between the two countries. It strengthens and diversifies trade and investment links with a focus on education, critical minerals and technology cooperation.

Today, Austrade posts across India are working intensively with Australian businesses to understand market, identify opportunities, make connections and help companies negotiate contracts.

India consumer spending skyrockets

India’s consumer spending a “revolution”

Austrade’s Ashley Brosnan on India’s consumer spending “revolution”:

The biggest revolution taking place is the rapid rise of a huge, diverse and wealthy consumer market. Despite the impacts of the pandemic, domestic demand is likely to be a major driver of recovery and growth over the next decade, making up 60% of the overall economy.

E-commerce is taking off as smartphone usage multiplies. India already has over 1 billion internet users and the digital economy’s contribution to GDP is projected to grow 15–20% by 2024.

Incomes are also rising strongly. India’s median income per household is expected to reach A$13,867 by 2025. The World Economic Forum considers that consumer expenditure in India will grow by a factor of four up to 2030.

This means over 80% of Indian households will be middle-income in 2030 – an increase of 140 million. Another 20 million will be considered high income.

India’s emerging and aspirational middle class is seeking premium food and beverage, healthy lifestyle products, technical infrastructure, quality healthcare and education, entertainment and consumer goods.

Trends in consumer demand are encouraged by a substantial, highly-skilled Indian diaspora in Australia, which is set to number 1.4 million in 2031.

India now a top FDI destination – assuring economic growth

FDI fuels double-digit growth

Austrade’s Ashley Brosnan sets out the FDI picture:

Despite the COVID-19 crisis, foreign direct investment (FDI) inflows into India grew 13% in 2020. This is an extraordinary achievement – and a landmark development in a country that has historically proved challenging to foreign investors.

The rapid inflow of investment makes India one of the few countries to experience double digit growth in FDI during 2020. It means India is now a top 10 destination for FDI, and it heralds a sea change in global investment sentiment.

Multinationals are seeking to move their supply chains into the subcontinent. The push factor is a desire to diversify from an over-dependence on China. The principal pull factor is a young, competitive workforce, particularly in the information technology and construction sectors.

FDI flows into India contrast sharply with the global picture. For example, FDI flows into China grew by 4% last year, while FDI flows globally fell 42%. FDI flows into developed economies fell 69%.

Investment in India is likely to grow significantly over the next decade.

India growth 2021 12.6% – the only world economy to be over 10%

Prime Ministers Modi and Morrison are close – and should talk more about trade.

Rapid recovery in 2021

Austrade’s Ashley Brosnan points to India’s post-coved economic recovery based on fast rollout of the vaccine, falling caseloads, economic stimulus and Foreign Direct Investment – it has every angle covered:

The OECD projects that India’s economy will grow 12.6% in 2021. This will make India the only major country to achieve double digit growth in 2021.

It should be acknowledged that the Indian economy is among the worst affected by the pandemic, which has resulted in strict, multi-month lockdown restrictions. GDP fell 10.3% in 2020 damaging household income and business confidence.

But rapid economic growth in 2021 will be driven by an expansive vaccine rollout, falling COVID-19 caseloads, and extensive economic stimulus.

Not forgetting that India is now a top 10 destination for Foreign Direct Investment.