Blog

Featured

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. 

India post-Covid to get major economic boost from the rural economy

The Covid19 pandemic has crippled India’s urban economies.

But fortunately for India, the rural economy is stepping up.

Over two thirds of the population and 70 per cent of the workforce of India are in rural areas. The rural economy is now 46 per cent of national income.

And India’s 650,000 villages have money to spend.

How is this happening?

farming 2

Bharat, or rural India, is thriving – it is a combination of bumper crops, good monsoons and Government handouts.

In India’s auto sector, biggest demand is now rural – for tractors and two wheelers.

tractors

Rural unemployment peaked at 26 per cent in May but by June 21 had dropped to 7.3 per cent.

For once in a long time, the Indian rural economy is the good news and could be the big driver post this pandemic.

India to benefit from Industry 4.0 says head of Rolls Royce

The fourth industrial revolution also known as Industry 4.0 or a new age of connected technologies and data-driven insights is now upon us and is changing the way we live, work, and interact with each other.

One of India’s inspirational business leaders is Kishore Jayaraman, President, Rolls-Royce, India & South Asia. He has a vision for India and Industry 4.0.

Industry4.0 2

Industry 4.0 is all about innovative technologies, such as artificial intelligence (AI), mass automation, industrial communications, Big Data, robotics and 3D printing.

According to HSRC’s “Global Industry 4.0 Market & Technologies 2018-2023” report, the global Industry 4.0 market is projected to reach US$214 billion by 2023.

The Indian government estimates India’s manufacturing sector would breach US$ 1 trillion by 2025.

KishoreJayaraman

But Kishore Jayaraman (pictured above) warns that Indian manufacturers need to move beyond the current status, characterized by manual inputs, lack of ICT integration in manufacturing, and critical gaps in capability, to move to the next stage and fill the critical technology gaps.

He says: “To that end, government’s ‘Make in India’ initiative is providing the groundwork for both small and large companies to develop advanced manufacturing capabilities and invest in technology upgradation.

“Additionally, programmes such as green corridors and smart cities have been launched to support critical technology interventions across various industries. Besides creating jobs, these initiatives appeal to a new generation of workers with different values and skills that boost synergies,” he said.

Here’s how he sees India benefiting from Industry 4.0:

First, it will allow manufacturers to improve productivity, efficiency, safety and performance and help position India as a global manufacturing hub.

Several Indian e-commerce companies are using advanced data analytics to gain insights on customer behavior and improve business performance. Likewise, manufacturers can implement data analytics to improve forecasting, predict and prevent manufacturing downtimes, manage supply chain and enhance production capacity and quality.

Second, Small and Medium enterprises (SMEs), which form the backbone of Indian manufacturing, can leverage Industry 4.0 technologies to become more agile, enhance productivity, streamline costs and reduce risks.

Third, employers will be able to increase the skills of their workforce. While some jobs may be lost, new ones will be created in the new economy. New technologies inadvertently require new skills and trained Industry 4.0-ready workforce especially in areas of cognitive robotics, advanced automation and industrial ICT. Training in safety-related skills will also come into play with an increased level of human-machine cooperation.

Finally, Industry 4.0 could provide a pathway for Indian manufacturing to transform to an innovation-led and high-value manufacturing stage. Technology-intensive sectors such as the Aerospace & Defence (A&D), which is at the cusp of innovation and growth in India, are clear beneficiaries.

industry4.0

At Rolls-Royce, Industry 4.0 is a critical aspect of business and strategy – using connected systems to make better decisions. This brings together a number of technologies, such as the Internet of Things, intelligent manufacturing, digital product verification as well as virtual design and simulation.

 

Marketing to India’s millions is now about social media and e-commerce

India has 560 million internet users – and growing fast.

Over 450 million will be social media users within 2 years.

India is a young population – the median age is just 27.

E-commerce will be over A$100 billion by 2026.

Australia now has a good starting point thanks to Austrade – we have the AUSTRALIAN STORE at Amazon India.

Check it out.

India also has some of the world’s best digital marketing agencies – one leader was SOCIAL WAVELENGTH which has now become Mirum India – top outfit.

I have great respect for Mirum India which is led so well by Sanjay Mehta and Hareesh Tribrewala.

Indian startups are driving growth and change

There are many drivers of India’s economic growth and transformation – but certainly punching above their weight are Indian startups.

There were over 50,000 startups in India in 2018.

India has the third largest startup ecosystem in the world.

The success is partly driven by corporate India (which is providing much of the funding) and by the Indian Government policies.

Bengaluru is in the world’s top 20 startup cities and ranks in the top 5 of the “fastest growing”.

Some of the best known Indian startups include Ola Cabs, Snapdeal (e-commerce), OYO (hotels), Swiggy (food delivery), Big Basket (food e-commerce) and BYJU’s (ed tech).

Watch this space.

Can you trade with India without leaving home?

As Covid19 has made us all (Australia, UK, USA, Canada etc) more cautious, we are reluctant to travel.

Add to that a leap in Indian online e-commerce for all kinds of products and services.

Is the future of trade with India digital? Do relationships matter any more?

We have always said that the key to long term success with India is in the careful and gradual development of close working relationships. This has to be done face to face, but these days can be supported via phone and video calls.

Deakin University is the prime example of success through perseverance and relationship building – they have had a presence in India for over 25 years.

Ravneet Pawha has led Deakin in India for most of that time and she is now the Deputy Vice President – Global and CEO – South Asia. She knows everybody in decision making on education in India. Ravneet is a regular promoter of Australia and our education at conferences and in Indian media.

ravneet

The Australian citrus industry is taking a closer look at India but their CEO has told members it could take five years to build a market.

citruspic

So relationship still matters in dealing with India.

For our diplomacy, we need closer relationships at Indian central and state government levels.

For education, we need to follow the lead of Deakin University and be on the ground over there, building collaborative relationships.

And for products and services, while online is becoming the way of the future, products and services will only become trusted and valued as people have a relationship with your brand.

Australian PM Morrison has been gradually building a closer relationship with India PM Modi and this is producing some progress on agreements and cooperation.

Relationship – it is the way forward with India.

ModiMorrisonSmile2

10 essential tips for doing business with India

Doing business with India? Here are some tips that might help your experience, but keep in mind you will find many variations and contradictions of these points in the very diverse and exciting India market:

The language barrier is real – even English

India has some 26 major languages, but your Indian counterpart will almost certainly speak English, which itself can be a problem – it creates the illusion of communication and understanding. Many of us speak English and think western – your Indian partner speaks English and thinks Indian, so take care to build real understanding. Also keep in mind there are “many Indias” with many different languages and ways of thinking.

business2

You are in a different culture

Visitors to most of Asia and China are visually reminded all day that they are in a vastly different culture. But often, especially in offices, India can appear quite westernised and individuals also give that impression. Better to open your mind and see things and people more clearly, looking beyond the surface level “westernisation” – exploring cultural differences expands your horizons and you will find many charming similarities.

Be patient and you will get there faster

Adopt a patient long term view – India is a 5 to 10 year game. It is very easy to get MOU’s (Memorandum of Understanding) signed with fanfare in India but too many do not produce any outcome. One way to improve our cultural dexterity would be to take a long-term view and apply lots of patience.

Narendra-Modi-Mohammed-bin-Zayed-Al-Nahyan

Businesses should not start out on market entry unless they are prepared to commit at least five years to making it work. Governments need the same longer-term perspective. Rushed trade missions, political announcements and photo opportunities amount to very little – we see them as an achievement, but they are just a beginning.

Relationships take time – but they are everything

India is a collective culture which means relationships are the number one factor in success, and building relationships takes time. Many who see India as not a short-term transaction opportunity can find success, but not for long as someone with a better price comes along. A better strategy is to aim for longer success through a focus on building relationships. The first trade meeting in India can be exciting and positive, but from the India side this is just seen as an introduction and they will wait to see if the relationship grows. Trust and relationship take time.

ModiMorrisonSmile2

“Yes” can mean “maybe” or “no”

See beyond the politeness: Indians are among the most courteous and generous hosts on the planet. On top of this, their culture demands that they never provide an outright rejection or “no” statement, even when this is clearly the only answer. The dumbest question for a business to ask in India is “can you help me with market entry for my products?” The answer will always be “yes” and you will sit idle for a long time back home until you realise this is not the right question. Within Indian culture built so solidly on relationship above all else, the word “no” is a real relationship breaker and is rarely or never used. “Yes” can in fact mean “maybe” or even “no” and you need to look for the signs. Like most of Asia, Indians are indirect communicators.

Prepare for the collective

Most westerners come from a culture of the individual, but the Indians they meet are firmly placed in a collective culture.  A visitor to an Indian company will often find four or five Indians in the meeting, and often it is not clear who is in charge. Many Indian leaders will not speak up or even speak at all in these meetings – in the collective someone else does the talking while they do the evaluating.

It will be slow and fast

Modern India can be slow or fast and it is hard to know which you will encounter. Sometimes delivery seems to take forever, yet on other occasions it is faster than the west. This means to succeed there you need incredible patience, so don’t send your least patient executive to India. Being able to respond positively under both slow and fast delivery is the key.

The visitor can be shocked and unprepared for the speed of modern India. Businesses need to go prepared to deliver on a product or service right now, not just having some idea for a future opportunity. Trade missions from around the world arrive weekly, so they have plenty of choice. Fast and slow, east and west – India is a living and dynamic paradox.

business 4

India is many countries in one

Differences are not just seen in the North, South, East and West, India is truly many countries in one and you need to be ready for cultural diversity. While Mumbai is the fast and flashy financial capital, it is also a tough place because everything is done on grand scale and at great speed. New Delhi is more formal and stuffy, also more liveable, and is more than a political capital – it is a powerful business city. Chennai is one of my favourites, embracing that slower southern pace and the values that shine in southern businesses. Regions have varying strengths, so research is the key. Recent moves to allocate Smart Cities across India can provide insights into alternative gateways for you.

Navigate through the spider web

While the west strives for simplicity and certainty, Indian business leaders know that life is like trying to find your way through a spider web – where does it begin, where does it lead, who can tell? Consistent with this view, most Indian corporations offer an incredibly diverse range of products and services – whereas western business tends to focus on just one area. In most cases Indian companies are willing to buy from you but are also looking for the deal to include some intellectual property sharing arrangements – think about these before you head over there.

Learn the art of flexibility and patience

Being patient and flexible is an asset, even if you come from a country that likes to be blunt, direct and structured. Most Indian communication is indirect, so it can take some time to work out what the real issues are. India is full of surprises and you cope best through being flexible. Dropping any “one rule for all” approach is a good start.

If you are thinking of going, India’s great thinker Rabindranath Tagore can be your inspiration: “You can’t cross the sea merely by standing and staring at the water.”

business

 

 

 

 

 

 

Abu Dhabi invests big time in India’s Jio

India has close economic and diplomatic ties in the Middle East. They just got stronger.

Abu Dhabi Investment Authority (ADIA) invested US$ 806.28 million in Jio Platforms, taking the total capital raised by its digital services subsidiary to around US$ 14.19 billion in just seven weeks.

The UAE is India’s third largest trading partner and more than three million Indians live in the Emirates.

So far, Jio Platforms has raised US$ 13.89 billion from seven marquee global investors.

JioFiber-1-770x433

ADIA, which is a globally diversified investment institution, invests funds on behalf of the government of Abu Dhabi through a strategy focused on long-term value creation. It has made several investments in India, mostly through its private equities department.

Jio Platforms is at the forefront of India’s digital revolution.

Jio, with 388 million users, combines all of RIL’s digital and telecom initiatives, including Jio digital services, mobile and broadband, apps, tech capabilities such as artificial intelligence, Big Data, and Internet of Things, and other investments such as in Den Networks, Hathway Cable, and Datacom.

India and Australia set a course to lead in the Indian Ocean

Last Thursday a “virtual” meeting set the course for the Indian Ocean region.

Australia’s PM Scott Morrison and Indian PM Narendra Modi met online.

Both shared the same problem – how to ensure security in “our” Indian Ocean region when China is becoming so active there.

These two leaders have ensured that for decades the two countries will become even closer strategic friends, and that both will lead in determining power in the Indian Ocean.

indiaaust2

Neither country ever expresses expansionist plans. Both just want the freedom and security they cherish.

This is a real boost to the India-Australia relationship because, let’s face it, there has not been much spark of interest between the two countries. Lots of words, but nothing tangible. Modi and Morrison have changed all that. Now it is real.

indianocean

What security deals came out of the meeting?

First, allowing reciprocal access to each other’s military bases for logistics support such as refuelling and maintenance. Sounds mundane, but it is a key step to closer military exercises and training.

Second a maritime cooperation agreement supporting the “rules-based” maritime order in the region, founded on respect for the sovereignty of all nations and international law, particularly the UN Convention on the Law of the Sea. “Rules based” means “not China”.

Third, an agreement to cooperate on critical cyber and other technologies.

There were six other agreements and commentators are saying the two leaders found many ways of implying that “this is all about China”.

But I think it is really about the future of the Indian Ocean.

The two countries – India and Australia – have middle level defensive capacities and could unite a string of countries in the region in some form of security net. Likely additions would be Vietnam and Indonesia.

It will be values based. Modi told Morrison, “it is our sacred responsibility to uphold and protect values for global good like democracy, rule of law, freedom, mutual respect, regard for international institutions and transparency.” These values, he said, were under challenge.

This Indian Ocean deal could make the region one of stability at a time of China’s rise to power and the unpredictability – and decline – of the USA.

 

Former diplomat John McCarthy shows how Australia can gain respect in Asia

INTO INDIA recently called for an end to “Australia giving Asia a lecture”.

Now former diplomat John McCarthy has highlighted the importance of regaining respect in Asia.

In an interview in the Australian Financial Review, McCarthy said: “American power is diminishing, whichever way you look at it. Chinese power is increasing. We don’t like it. And we are not doing much about it. Part of the reason why is because there is no popular understanding of why it’s important. So, the political class are not giving it the huge amount of thought they should be.”

He is concerned that our political leaders publicly criticise China because they think the Australian electorate will support it.

More from McCarthy: “What we should be doing now is working quietly with other nations to present “a united, cogent front” against China’s excesses. Instead, our politicians are playing the punters, using foreign policy to win support at home.”

He made the key point that Japan, Vietnam and India all have much bigger problems with China than we have – border issues and very considerable policy differences that go back many years – yet they are very careful. “Occasionally they will make a strong criticism of China, but they hedge. They are cautious. They are measured,” he said.

When Australia made a loud and public call for the coronavirus investigation, McCarthy was well placed to judge the reaction in Asia.

“The immediate reaction of my Asian friends to those comments was ‘Why are you following Trump on this?’ When you are looking for respect, you don’t follow the words and actions of the most condemned American I can think of.”

So, what is ahead for Australia in Asia?

“I think over the longer term it can get back to a more mutually respectful, interest-based relationship. At some stage we will have to get the thing back into some sort of kilter. It is really totally wrong right now.”

“We don’t want to be seen by our regional friends as the voice at the table that could be an embarrassment – yet I think we are.”

Can we gain respect? McCarthy’s concluding remarks are a powerful lesson in diplomacy.

“The Chinese may not like us, but it would be nice if they respected our views,” he says. “I think partly because of the way we have said things, pronounced on things, they have put us in the same basket as Trump and that is seriously hurtful to Australia.”

He also says it’s not just China we need to worry about.

“If we want to contribute to the responses to the changes in the region, we don’t want to be seen by our regional friends as the voice at the table that could be an embarrassment – yet I think we are. Because of the way we sound off, the small country echoing Trump, the countries that are more measured in the way they deal with China are thinking, ‘Do we want to be closely associated in public with this maverick?'”

Right there is the challenge for Australia.

 

India offered flexibility on RCEP – the world’s biggest trading bloc

RCEP – the initials that describe potentially the world’s biggest trading bloc.

RCEP needs India back – it walked out during earlier negotiations.

To urge India back to the negotiations for the Regional Comprehensive Economic Partnership (RCEP), its 15 member countries have offered New Delhi the option of deferring commitments related to opening up its market.

Reports on the RCEP move come on the eve of online discussions between Indian PM Modi and Australian PM Morrison. I hope they can advance the talks.

ModiMorrisonSmile2

The move was reported in The Hindu Business Line.

According to some diplomatic sources, the deferral means that India does not need to worry about RCEP’s impact on the broadening of its trade deficit with China and other member countries when it signs the RCEP agreement.

India quit talks with the RCEP — which includes the 10-member ASEAN, China, Japan, Australia, South Korea and New Zealand — in November 2019, as it could not agree on crucial issues including the level of market opening being demanded by the members, especially China.

“If India agrees to the package then it can enjoy the benefits of all other aspects of the RCEP pact such as investments, services and intellectual property rights, without having to worry about the fate of industry and farmers,” the diplomat further said.

The RCEP, once completed, could be the largest trading bloc in the world, accounting for 45 per cent of the world’s population and 40 per cent of world trade.