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.
Despite a tariff as high as 150% plus state taxes, Australia’s Jacob’s Creek is a standout leader in the imported wine market of India. This Aussie winemaker is owned by global giant Pernod Ricard.
Here are some stunning statistics – imported wine accounts for 40% of wines sales in India. 70% of that 40% is Jacob’s Creek. This means Jacob’s Creek accounts for over 20% of the wine market in India.
Another stat – every year 19 million Indians reach legal drinking age.
Wine is mainly an urban success story in India, with three cities dominating the consumption – Mumbai, Delhi and Bengaluru. Apparently women are driving demand for wine – while men stick to whiskey and beer, women have become major consumers of red wine.
Jacob’s Creek has succeeded despite stiff competition from local winemakers, including Sula and Fratelli.
In the context of exporters urgently seeking alternatives to China, Jacob’s Creek is a success story that should be studied by those seeking to succeed in India.
Now – about those tariffs. Australia needs a coordinated campaign to get some relief for wine. This campaign needs to encompass governments, industry and culture/education. My advice – don’t go head-on against the tariff. Subtle approaches are best. Work out what we can offer India and how some reduction in tariff therefore becomes mutually beneficial.
Commenting on the recent Indian Budget, Vishal Kampani, Managing Director, JM Financial Group, said “the Finance Minister has laid the foundation for next-generation growth and deserves a big round of applause.”
The Union Budget 2021-22 presented by Finance Minister Nirmala Sitharaman on Monday has laid out the road map for India to achieve sustainable growth in the years to come by delivering on key expectations. By choosing growth imperatives over fiscal puritanism, the FM has clearly indicated where the government’s focus and priorities rightly lie.
We have heard about soft power diplomacy and hard diplomacy, but India is showing another way through “vaccine diplomacy”. It could show Australia and other Indo-Pacific Region countries an alternative diplomacy template.
Right now, Australia is too often the first country to call others out, it is known for “hard talking diplomacy” (sometimes at great cost such as the recent trade dispute with China) and Australia is also known predominately as a close ally of the United States of America. These are not positions that find much favour in a rapidly changing region.
How has India created an alternative diplomacy?
First, India accepts global realities, such as the future dominance of China and the USA, so it tries to find the right niche or niches for itself. It has worked hard to develop and promote a reliable reputation in global pharmaceuticals, to the point it is more trusted in this area of production than Russia or China. The UN Secretary General Antonio Guterres has called India’s vaccine manufacturing capacity the “best asset in the world.”
Second, in a distinctively Indian way, India has built generosity into its diplomacy. India has already supplied more than five million vaccines to its neighbouring countries—Bangladesh, Sri Lanka, Nepal, Bhutan and Myanmar—as well as additional quantities to other emerging economies like Brazil. This Vaccine Maitri (Vaccine Friendship) will not be forgotten by the people of those countries.
To put this generosity in context, India is the worst affected by Covid19 in terms of numbers and needs to vaccinate 700 million people at home.
Third, Indian Prime Minister Narendra Modi is a strong advocate of business and of building transparency and trust across business activities. This, in part, has led to the development of a globally competitive pharmaceutical and biotech industry in India. The “vaccine diplomacy” is built on this foundation of strong private industry.
Part of the success of India’s pharmaceutical industry is an almost accidental outcome of long-term price controls in their domestic markets which forced the pharmaceutical sector into world markets, thereby becoming more competitive with higher quality.
It is one thing to have a strong pharmaceutical sector – it is quite another creative step to use “vaccine diplomacy” as India seeks to define its niche in the modern world.
For countries that struggle with the subtleties required in diplomacy, India has created a template – accept the reality of global power, find your niche and use “out of the square” thinking such as generosity to reinforce that niche.
Below (L-R) Robert Johanson, Chairman Bendigo Bank and Australian Friends of Asha Slums; Dr Kiran Martin; Anne Rathbone, Owner of Yering Station Winery, and Harish Rao from Friends of Asha Australia
Robert Johanson AO was honoured in the Australia Day honours by appointment as an Officer of the Order of Australia. This recognises his distinguished service to the banking sector, to relations between Australia and India, and to tertiary education governance and financial administration. Robert has brought respect for all and considered commentary to his many roles and especially as Chair of the Australia India Institute – from 2010 to 2019. He served for 31 years on the board of the Bendigo and Adelaide Bank, 13 of which were as Chair of the bank’s board.
Robert was also Deputy Chancellor of University of Melbourne from 2007 to 2017. He has also been the Chair of the Board of the Australia India Institute in Delhi since its inception in 2015, a role which thankfully he continues to hold – this continues his relationship with India and ongoing support of Australia India connections.
Robert has a strong personal commitment to making a difference for those in need and has served as the Chair of the Australian Friends of Asha, the Australian branch of Asha India. Asha is a charitable organisation created by Dr Kiran Martin in 1988 which works with people in India residing in slums and benefiting more than 700,000 people from over 91 slum colonies of Delhi. Australian Friends of Asha was launched by former Governor of Victoria The Honourable Alex Chernov AC QC in November 2012 and aims to provide support to Asha and promulgate its work throughout Australia.
Gandhi exhorted us to “be the change you want to see in the world” and Robert has contributed more than any other to the positive change in the relationship between Australia and India.
Below is Robert Johanson with Mahinder Shrivas who thanks to Asha went from a Delhi slum to Trinity College at Melbourne University
Easy to use and understand analysis of the India Budget by our friends at Nangia Andersen India:
“The Finance Minister delivered a growth oriented reformative budget giving due thrust on capital investment. Amidst the high expectations of a pandemic-struck India, FM treaded the tightrope successfully, maintaining a balance between revenue gap and government’s commitment to the pained sectors of the economy, viz. infrastructure, healthcare, public transport system, auto, textiles, digital India. While the budget maintained the status quo on tax rates, incentives were accorded to units of IFSC and start-ups. Additionally, steps have been taken to improve the efficiency of tax administration system, rationalization of MAT, equalization levy, etc”
Yesterday was both Indian Republic Day and Australia Day – and in these times the closeness of the two countries makes us more aware of what we have in common.
Australia’s Prime Minister Morrison wrote yesterday that: “While, for now, our people are separated, the truth is that Australia and India are closer than we have ever been. Our progress is unchecked. We’ve taken huge strides in the last year, and, despite its enormous hardship and loss, 2020 will be remembered as a pivotal moment in our friendship.”
Business and investment can become the next step in the “huge strides” in the friendship of the two great democracies.
India’s growth and demand right now means that every sector of Australian business should have an “India strategy” and become part of this amazing growth story – and the future closeness of the two countries.
The disturbing instances of racism against an Indian cricketer are a reminder that racism is always there and we need to oppose it. It was good to see 6 people ejected from the ground and well done by the Indian cricketer for calling it out.
Racism hurts individuals and communities.
A study of over 800 Australian secondary school students found that racism had huge mental health impacts on young people who experience it, including:
ongoing feelings of sadness, anger, depression and being left out
headaches, increased heart rate, sweating, trembling and muscle tension
a constant fear of being verbally or physically attacked
not wanting to go to school
having little or no trust in anybody apart from family. 1
Australia is now a very culturally diverse country – about half of us were born overseas or had one or more parents born overseas. When racial tensions develop, they don’t just affect one or two of us – they affect us all… as neighbours, workmates, friends and fellow Australians.
Racism creates a society where people don’t trust and respect each other.
When it’s allowed to flourish, it lessens us as a people.
Let’s all take a strong stand against racism.
(Thanks to the Australian Human Rights Commission for some of the above)
The launch by India on 18 December of its Australia Economic Strategy (AES) – the first of its kind for India – could be an exciting step along the way to increased trade. As KPMG has expressed it: “It demonstrates India’s intent to fast-track the relationship with Australia in a post-pandemic world.” Exciting.
My view is that as Australia and India move closer together, opportunities will emerge for the two to create and lead an “Indian Ocean Countries Group” – a pathway to peace and prosperity in our region.
The AES adds to the Comprehensive Strategic Partnership (CSP) announced by Prime Ministers Morrison and Modi in June 2020 – and both are real evidence that India and Australia are moving closer together.
Three pillars of India’s strategy
The AES is based on three pillars: resources; technology & services; and research & innovations.
Five key sectors
According to KPMG there are five key sectors:
The first is Indian investment in Australia’s mining and resources sector, especially lithium, cobalt and nickel, important for a rapidly growing e-vehicle market.
Second is Indian investment in renewable energy both in the establishment & operation of solar farms as well as the supply of EPC services with Sterling Wilson Solar Limited being a case in point.
Third is health and pharmaceuticals. Collaboration in clinical trials, cancer research, medical & health-tech and training, knowledge transfer and sharing of Australian best practices in hospital administration and patient care.
Fourth is investment in Australia’s agribusiness sector including farmlands and Australian food processing capabilities. There is also significant potential for knowledge sharing and collaboration in best practices for dairy processing.
The fifth is software & information technology. India’s tech giants already have sizeable operations in Australia with further organic and inorganic growth on the cards and an opportunity to extend their business portfolio into government accounts. Further, as Australia looks to build up internal capability and capacity, there is opportunity for the tech giants to set-up centres of excellence or innovation hubs in strategically important areas such as cyber security, cloud and digital, for Australia and the wider ASPAC region.
Make in India program
The new AES, and IES and the wider strategic partnership, all serve to complement India’s flagship Make in India program, which makes India a credible alternative for lower cost manufacturing for Australian companies as they look to diversify business and supply chain risk in a post pandemic world.
Close relations have historically been built on a combination of defence/strategic alliances, mutual investment and trade.
For Australia and India, the future is looking bright in all three areas.
Tech pioneer Bill Gates praised India’s policies for financial innovation and inclusion, saying his philanthropic foundation is working with other countries to roll out open-source technologies modeled on the country’s implementation.
“If people are going to study one country right now, other than China, I’d say they should look at India,” Gates said at the Singapore Fintech Festival on Tuesday. “Things are really exploding there and innovation around that system is phenomenal.”
India has built ambitious platforms for universal identification and digital payments, including the world’s largest biometric database and a system for sending rupees between any bank or smartphone app. Gates said those policies have drastically reduced the cost and friction of distributing aid to the poor, especially during the pandemic.