I would have liked the “India Economic Strategy to 2035” to focus more on how the introduction of the GST and the transport E-way system is creating all kinds of new business demands in India.
In particular, Indian businesses are now being driven towards massive business process improvements. Service providers in this plus tax plus logistics are in big demand.
The GST was cited as the biggest tax change in history. Associated with it is the E-way which is electronic documentation detailing the movement of goods exceeding Rs50,000 in value.
Goods out of the e-way bill’s ambit include perishable items such as meat, milk and milk products and fruits and vegetables. Other items that don’t need an e-way bill are gold and silver jewellery, cooking gas cylinders, raw silk, wool and handlooms.
The e-way bill is a key anti-tax evasion measure and is a crucial part of the GST architecture.
The transformation coming from these reforms is huge. The previous state border taxes led many companies to have production and warehousing where they otherwise would not make sense, so now the opportunity is for great efficiency.
Helping Indian business cope with the GST and E-way bills, and then achieve the business process transformation opportunity arising from them should be a big target for Australian consultants and providers.
Australia finally has ‘An India Economic Strategy to 2035’ which is a good thing, with trade now declining to around A$14 billion.
A big part of that trade is education, with Indians big users of our universities and colleges.
The strategy mentions “visa employment conditions” as a potential threat – it should have been stronger. Changing visa conditions have had the intended consequence of employers now being uncertain and scared to offer employment to overseas graduates.
This is bad for Australia long term. Australian governments have one department discouraging Indian students (immigration) and the rest of the country hoping we can get more – time for the government to step in.
But even worse is that Indian graduates are not prepared for employment in Australia – and the report missed this key point. Their CV’s are not up to scratch, their English is difficult to understand, few have learnt presentation skills and their self descriptions often miss out their most attractive employment qualities. From our pilot study we know that these things can be quickly fixed, giving Indians a real chance of getting the jobs they want.
If this employment mismatch continues, we will have thousands of Indian graduates of Australian universities taking unskilled jobs – and word will get back to India – “don’t come to study in Australia because you will not be offered a job”.
The report did call for our universities and businesses to work together to provide employment for students while they study – this is good. But the report made no mention of how unemployable these students are when sitting opposite corporate recruiters.
Missing this point was a big miss by the report. In addition to fixing the visa debacle, the government urgently needs to call the universities in, demanding a solution on employability skills.
Otherwise our trade will decline even further.
At last! Australia has ‘An India Economic Strategy to 2035’ — let’s hope this will have an impact and lead to change.
The strategy document noted that current trade with India is around $15 billion – it should have lamented this as a pathetic failure of previous initiatives. In contrast, current trade with China is $200 billion.
The report talks about several priority areas but only time will tell if the detail and approaches are right.
It misses on not placing enough emphasis on cross-cultural understanding. This is Australia’s biggest failing and underpins our poor outcomes with India – we just cannot talk to each other in a way we both understand.
The report also misses some strategic points – while it talks about declining US power in the region it could acknowledge that India has never understood our close alliance with the US. Nor does India have Australia’s (US based) global focus that we have to boost democracy etc. India is far more accepting of the world as it is. To know this is to have better diplomatic (and trade) relations.
It is also light on detail about how to benefit from the reach and connections of the 700,000 or so Indians who have migrated to Australia. But further focus and research will no doubt come from the report.
I really like that the report noted the Indian opportunities for Australia “would not fall into its lap and that the government would require a sharper national focus on India, an unambiguous commitment by Australian business and a deeper understanding by both government and business of the magnitude of what is unfolding in an Indian market place which will only get more crowded”.
More to come…
India has jumped to the world’s sixth largest economy according to figures from the World Bank.
India’s GDP was $2.597 trillion as the economy rebounded from the slowdown caused by demonetisation and tax changes.
India is also poised to become the world’s most populous nation with 1.34 billion people – and still growing fast as one of the youngest nations.
This population is part of the reason for economic success – the so-called “demographic dividend” of a young population is paying off with local consumer demand being the major driver and India has been able to find the skilled workforce for a growing manufacturing sector.
This is a huge achievement with India more than doubling its GDP in less than a decade.
The experts believe India will soon overtake the fifth biggest economy, Britain, as the rise to the top continues.
Airlines operating out of the Terminal 1 (T1) of the Mumbai airport now provide self-bag drop (SBD) facility to passengers, making it the only terminal with such a fully-automated check-in system.
The airport operator has also extended the check-in facility to a host of five-star hotels in the city, enabling the passengers to collect their boarding passes from the hotel itself.
All the airlines operating out of T1 of the Chhatrapati Shivaji International Airport (CSIA) are now on SBD facility, making T1 the only terminal in the country to have a fully-automated check-in system.
Mumbai International Airport Ltd, which runs the Mumbai airport, is the joint venture company between a GVK-led consortium and the Airports Authority of India.
In June this year air traffic numbers increased around 20% on the previous year – signs of strong economic growth.
Swinburne University continues to host “Western Immersion” programs for Indian uni students – I am always pleased to speak about “Letting your light shine” to these groups – this one is from Tamil Nadu. With 50% of the India population under the age of 25, they face stiff competition for jobs – hope we helped give them an advantage with some of the secrets of PR and good communication. Especially focusing on teaching them how to do a “personal pitch”.
One of the global initiatives of Indian Prime Minister Narendra Modi has been International Yoga Day – celebrated across the world on 21 June each year since 2015.
While China is building a global reputation based on the “belt and road” initiative and creating bases in the South China Sea, defending accusations of deliberately creating debt in emerging nations and interfering with neighbours, India just goes on doing its own thing.
China has an ageing population and a trade-dependent economy – it is vulnerable to global economic shifts and worried about security of trade routes.
In contrast, India has a young population and economic growth driven by internal demand. It is less likely to be affected by global economic downturns or security issues.
This is not to say security is not on the mind of India – it recently did a significant deal with Indonesia. But for China, security of trade routes is the dominant global concern.
That is why International Yoga Day gives special insight into modern India – lifting millions out of poverty, creating a strong economy and global strength but celebrating the quiet and peaceful side of its culture. This year the theme was “Yoga for Peace” and somehow I feel only India could come up with such a concept.
Fitch Ratings this week raised India growth forecast for 2018-19 to 7.4 per cent from 7.3 per cent, but cited higher financing costs and rising oil prices as risks to growth.
For 2019-20, it estimated the country to grow at 7.5 per cent.
The economy grew at 6.7 per cent in 2017-18 and 7.7 per cent in January-March quarter.
According to Fitch, India has better macroeconomic fundamentals than in 2013 and very low foreign ownership rates in the domestic government bond market, but the current account deficit has been widening as a result of rising oil prices, reviving domestic demand and poor manufacturing export performance, it said.
Time to review your India engagement strategy?
This weekend showed how much the west looks at the world through the prism of Europe and America – with the focus very much on the G7 meeting.
There was little or no western media coverage or political analysis of another important meeting over this last weekend – the Shanghai Cooperation Organisation, which has 8 members, representing 42 per cent of the world’s population, 22 per cent of the land area and 20 per cent of the GDP.
SCO focuses on political, economic, security and cultural cooperation among members – China, Russia, India, Kazakhstan, Kyrgystan, Tajikistan, Uzbekistan and Pakistan.
Unlike the friction of the G7 (pictured below), this meeting was a real opportunity for one-on-one discussions between leaders such as India’s Prime Minister Modi and China’s President Xi, who met on multiple occasions.
India is a new member of SCO and was very much focused on regional connectivity projects to boost trade among members of the SCO countries. India has been strongly pushing for connectivity projects like the Chabahar port project in Iran and the over-7,200 km long International North-South Transport Corridor to gain access to resource-rich Central Asian countries.
Prime Minister Modi and Chinese President Xi were also expected to discuss the economic ties between the two countries over the two days. India has been asking China to open its IT and pharmaceutical sectors to address the trade deficit which climbed to over $51 billion last year.
Outcomes of this meeting will be important for countries like Australia and Indonesia – but in Australia, at least, it seems SCO is not on the radar while the goings on at the G7 gain all the attention. Time to change our prism?