Australia sets impressive trade records which newsrooms refuse to report

Australians are not good at celebrating good news – and some of the good news they don’t even get to see on major media.

Trade performance is a good example.

Australia has an outstanding national trade body – Austrade – with talented people around the world promoting our products and services.

In many countries – including India – most of our states also have Government offices working hard to build trade and investment.

They have been incredibly successful.

Of the 35 advanced countries in the Organisation for Economic Cooperation and Development (OECD) who reported last year’s exports to the World Bank, only three increased exports relative to gross domestic product (GDP) over 2022.

Of these, Australia’s expansion was the strongest.

The World Bank also affirms Australia’s ascendancy.

The World Bank’s development indicators show export and import outcomes for 138 economies from 1974 to 2023.

The World Bank measured Australia’s 2023 exports at a record 26.7% of GDP.

The success story continues…

Of the 35 advanced OECD member economies for which the World Bank has recorded last year’s export volumes, 17 experienced a decline. These include normally robust economies Ireland, Germany, the United Kingdom, Netherlands and Belgium.

Only 18 increased their exports over the previous year. Just four managed an improvement of more than 5%. Australia ranked third with 6.5% behind Denmark and Costa Rica.

Well done all those Australian providers of quality export goods and services.

Well done, Aussie!

How India can become the “next China”

Globalization worked so well for China, but is stressed today

It’s complicated.

Mainly because of the rise of protectionism worldwide.

The Chinese miracle rode on the wave of globalization that began around 1980 and lasted until the 2008 global financial market crisis.

Globalization has come under severe stress lately, according to Amit Kumar, a research analyst with the Takshashila Institution’s Indo-Pacific studies program.

Weaponizing trade has left nations increasingly wary of economic coercion.

Self-sufficiency in some form or other is back in fashion. PM Modi is super keen on self-sufficiency for India.

If globalisation is too restricted, India’s ambitions might be thwarted. India could well have shot itself in the foot here, with it’s own anti-globalism and scepticism on international trade deals.

Gains for India will however be derived from the ongoing de-risking and “China plus one” strategies.  

India – unlike China during its growth – faces tough competition from Vietnam, Thailand and Malaysia. India attracted 15% of European investment diversifying away from China, but it fell behind ASEAN, which attracted 21% of the rerouted investments.

India is also lagging on ease of doing business. INTO INDIA has praised India’s progress, but must admit that it is now too slow. Ease of doing business has to leap ahead.

India currently contributes 16% of the global economic growth, as opposed to China’s 34%. The IMF predicts India’s share to rise to 18% in the next five years.

As China witnesses a decline in its share owing to its economic slowdown, we are led to conclude that India should emerge as the leading engine of growth.

With one reservation – “Ease of doing business’ could be the key.

Perhaps India CAN become the ‘next China’ and drive global growth

India’s consumer base is rapidly growing – pic from a Delhi mall

Since INTO INDIA has been involved with India, the mantra from economists and diplomats has been that “India is not the next China “. Is that about to change?

It could be, according to Amit Kumar, a research analyst with the Takshashila Institution’s Indo-Pacific studies program.

China has been top of mind for good reason – contributing more than a quarter to global gross domestic product expansion between 1990 and 2020. In the period from 2013 to 2021, China contributed almost 39% of global GDP growth — 13% more than the G7 countries combined.

How could India become the next China?

India would need to sustain a near double-digit growth rate for nearly three decades.

It would need to integrate with the global manufacturing supply chain, transition into an export powerhouse and attract enormous foreign investment.

But 40 years ago, we would have said the same things about China.

China’s rise from the 1970’s was boosted because of the deepening U.S.-Soviet rivalry and the Sino-Soviet split, prompted the US and the West to open up to China in 1971.

This is happening now with India.

Due to the deepening strategic competition with China, Beijing’s expanding diplomatic and economic clout, its belligerent foreign policy and economic coercion, has sparked concerns of overdependence and strategic vulnerability in the West.

India is emerging (has emerged?) as the preferred partner for the West.

We should not forget that China’s growth was also driven by global businesses looking for cheaper manufacturing.

This is now happening with India. Global firms now see India as an alternative to China.

The Indian Government has already supported high-profile projects involving the manufacturing of iPhones and the assembly of semiconductors – sending an “invitation” to others.

China also had a rapidly growing consumer base. No other Asian country had such a base – until India.

India has the second-largest consumer base – defined as people spending above $12 a day – of over 500 million, second only to China’s 900 million. Estimates show that by 2030, India’s consumer base will expand to 773 million, trailing only China’s 1.062 billion.

The gap between China and India will only shrink from here on.

NEXT BLOG – What India has to do to become the next China.

Australia India two-way trade now over A$50 billion

Great news from Austrade – two-way trade between Australia and India has reached around AUD 50 billion!

INTO INDIA has been active in this space over 20 years, and for most of this time our trade remained stagnant.

This recent growth is a tribute to the folks at Austrade, as well as State Government offices and all the organisations promoting the relationship. And of course highest praise goes to the brave companies that are finding a way in the Indian growth market.

Healthcare is a good example of the opportunities ahead.

The recent Indian budget 2024 signals the Indian government’s resounding commitment to provide equitable healthcare services across socio-economic spectrum with special coverage of “missing” middle class.

The Indian government is scaling up their focus on digitalisation of the public healthcare system, tariff reductions on some critical pharmaceutical drugs and MedTech devices.

Good news across the board – the budget also involves notable reductions in corporate taxes for foreign companies.

As India continues to grow as a preferred commercial destination, connect with organisations such as the Australia India Chamber of Commerce, with Austrade and with State Government offices – they can all help with the pathway to India.

Learning a lot about networking within different countries

Andy Molinsky is a professor of organizational behaviour at Brandeis University’s International Business School. He regularly writes for the Harvard Business Review, and his work has been featured in the Economist, Fast Company, Fortune, the Financial Times, the Boston Globe, NPR, and the Voice of America. 

He recently did some simple research which put a spotlight on how networking varies across cultures.

– Kanya is an MBA student in the United States who grew up in Thailand. She works in the construction industry and is 26 years old.

– Sandeep is an IT professional from India with an MBA degree from the United States. He is 28 years old.

– Mohamed is a security professional from Egypt pursuing an MBA degree in the United States. He is 24 years old.

Here are their answers:

1. Is networking common in your culture?

Kanya (Thailand): “No – it’s not common at all in Thailand. I have never been to networking events in my country before, other than a specific career fair. We don’t have any organizations that set up networking events.”

Sandeep (India): “Yes, it’s somewhat common, but only in certain situations. Indian culture is opening up to the idea of socializing and partaking in networking activities. As there is an influence of the western culture and the emergence of multinational companies is becoming evident, more and more Indian students and employees are making themselves available for networking events.”

Mohamed (Egypt): “The Arab culture is one that is more personal. You typically do business with those you know personally or have at least met. This makes networking vital in the Arab world. Networking is done in both business and non-business settings much like the West.”

2. Where does networking happen in your culture?

Kanya (Thailand): “Only career fairs provide us with the chance to meet with employers.”

Sandeep (India): “It can happen in many different places – career fairs, conferences, and even at unexpected places like parties or other informal get-together. Social parties, charities, functions are hot spots for youngsters and experienced employees alike to mingle with representatives from companies. I saw it happening in my workplace!”

Mohamed (Egypt): “There are both formal and informal settings to network. I have personally found that connections made through informal networking are more beneficial than those made in a career fair. This could be at a social outing or the informal portion of a conference.”

3. In your culture, what matters most: your resume and skills, the way you present yourself during a networking conversation, or both?

Kanya (Thailand): “When we meet employers at a career fair, they are not usually interested in our resumes. They want to talk with us about our experiences.”

Sandeep (India): “A lot of companies pay special interest to the resume of an individual, encompassing all the skills and expertise he or she has in his or her previous assignments. But at the same time, a lot of companies also look at how an individual carries himself or herself. Confidence is a big positive sign for many employers who are looking forward to hiring someone who can meet expectations without breaking a sweat; a fast learner perhaps.”

Mohamed (Egypt): “Both are crucial, but I believe the way you present yourself is more important. The personal presentation isn’t just a foot in the door; it’s a first interview. Your resume and skills are the second round interviews.”

4. If you are talking with a potential employer at a networking situation in your culture, how appropriate is it to talk about yourself and your background?

Kanya (Thailand): “It is not wrong to talk about yourself at career fair because that is why you are there. But it’s different than in the United States. In the US, you promote yourself and talk about your positive qualities. In Thailand, we’re not used to that. We don’t promote ourselves like in the United States. Instead, we just share our experiences and provide additional details if the employer asks about it.”

Sandeep (India): “You can mention something about your background, even if the employer doesn’t ask, as long as you do not sound too conceited. In the contemporary work environment in India, employees are becoming smart and impromptu in their demeanor. They like to boast, if I can say, a bit about their past jobs, their skills sets. But some overconfident employees and students blow it!”

Mohamed (Egypt): “This depends on the context. Given the right employer, job, and situation you can talk about yourself. I think it is more common for those coworkers to discuss personal matters amongst one another than with your supervisor.”

INTO INDIA comment – Networking varies across cultures – everything about communicating and doing business varies across cultures. It pays to be ready!

https://www.andymolinsky.com/

What will a third term for Indian PM Narendra Modi mean for India and the world?

 INTO INDIA had three big reactions to the Indian elections:

1) Democracy is alive and well in India; 650 million votes cast over a 6 week election process – truly a remarkably strong democracy!

2) Indians want jobs, jobs, and jobs; this is why manufacturing has become so central to India’s economy – the swing away from the ruling BJP suggests PM Modi has to do more on jobs.

3) the Indian voter will expect the government to keep growing the economy – and show why that is a benefit for all Indians.

The only other Indian Prime Minister to win three five-year terms was the first – PM Nehru.

This has been a much closer election than predicted – and probably has given the ruling BJP and PM Modi much to think about. Of course, INTO INDIA notes that long term office holders generally face an anti-incumbency mood.

Congrats to Indian PM Narendra Modi – we have always called him ACTION MAN and in his third term he will need to maintain the action.

We expect a big focus this term on manufacturing, physical infrastructure, digital infrastructure and energy transition.

Why India is such a rare and attractive investment market

There is something about investing in India that most investors are not aware of. INTO INDIA is pleased to bring this important statistic to you.

India is a rare market that has delivered double digit annualised returns in USD terms consistently over a 5, 10, 15 and 20 year time frame.  Even the US has not done that, falling just short over the 20 year time horizon.

Why is this happening?

This startling fact was drawn to the attention of INTO INDIA by Anish Mathew, Chief Executive Officer & Chief Investment Officer, Sundaram Asset Management Singapore Pte Ltd.

Anish explains – “There are a couple of key reasons for this in my view.  India is a capital scarce country and hence cost of capital has always been high in India. 

“This has resulted in corporates being generally disciplined about their capital allocation decisions which in turn has benefited their shareholders over the longer term. 

“Secondly, the correlation between economic growth and corporate profits is the highest amongst its EM peers.  Studies have shown that over a 20 year period, it is around 0.62. 

“As the Indian economy has grown at an average of 6% since 1980, corporate profits have benefited, thereby underpinning the performance of the Indian market over the long term,” he said.

For those who love the stats:

The MSCI INDIA Net Total Return USD Index:

5 years – 11.92%

10 years – 10.06%

15 years – 10.42%

20 years – 11.04%

Makes INTO INDIA wonder – are we missing the India investment opportunity?

Australian banker says “this is India’s century”

This is the best, strongest vote of confidence in India from one of Australia’s leading corporations.

Mark Whelan, Group Executive at ANZ: “The time is very much appropriate to grow here. If you look at the basics of the Indian economy and where its place is in the world, this is India’s century”.

Rufus Pinto, Country Head, India, Australia and New Zealand Banking Group, outlined the rapid recent growth of ANZ in India: “ANZ India started our Institutional Banking operations in 2011. 13 years of existence across three branches today with over 80 bankers supporting the top Financial Institutions; Local Large Corporates and MNC’s working together with our home markets of Australia and New Zealand, and ~30 markets in our global network providing our clients a seamless agile offering.

“ANZ in India today house almost 20% of our global workforce, with our Global Capability Centre in Bengaluru,” he said.

This is change on a grand scale for a leading Aussie company.

Yes, this is India’s century.

Time to get on board?

Australia’s sister-city relationships with India and the diaspora here – asleep but huge potential

The growing Indian diaspora in Australia could add real energy to our relations with India – and the sister-city program could be an ideal vehicle.

My desk research suggests that only Brisbane and Ipswich have formal sister-city relations, both with Hyderabad. I also believe Perth has begun searching for an Indian sister-city.

This is pathetically small when compared to our large numbers with Japan, USA, Canada and China. It is time to catch up with India.

Global sister-city relationships, also known as city twinning, started after World War 2 with the ideal of fostering international cooperation, cultural exchange, economic development and disaster preparedness.

Worldwide sister-city relationships right now have almost stalled, yet offer immense potential.

There is a growing need for comprehensive research to assess the effectiveness of existing collaborations, identify challenges, and formulate evidence-based policies that can enhance the outcomes of these bonds.

We should reinvent sister-city relations with India and focus on helping with challenges such as climate change and pandemics, along with development and economic links. The Indian diaspora in Australia is well placed to lead this.

Modern technology makes sister-cities highly attractive via the improved and cheap communication channels. Knowledge exchange is now easier than ever. Economic collaboration and trade between twin cities can go through the roof if the local diaspora is heavily involved.

People to people connection is the sleeping giant of Australia-India relations and it can wake up and energise via the Australian Indian diaspora.

How can we apply digital platforms, data analytics and smart city technologies to create highly effective sister cities with India? We need answers in order for sister cities to be a wise investment of time and money.

Successful sister-city relationships must be characterised by a commitment to mutual understanding, effective communication, and a focus on shared goals.

Anusha Kesarkar Gavankar, a Senior Fellow at the Observer Research Foundation, recently wrote: “Policymakers could focus on enhancing communication channels between sister cities by utilising modern technology, establishing regular forums, and promoting language exchange programmes. Developing dedicated online platforms and mobile applications can facilitate real-time communication, allowing cities to share experiences, best practices, and innovative solutions to shared challenges.

“Furthermore, establishing annual forums or conferences where representatives from sister cities can meet and discuss collaborative opportunities can strengthen ties and foster a sense of community.”

In addition to the economic potential, I would love to see sister-city scholarships for Indian students to study in Australia, as well as cultural events that showcase the rich diversity and indigenous knowledge of each city can strengthen the bond between communities.

Many of our universities now have formal links and presence in Indian cities, so it would make sense for sister city deals to focus on this groundwork.

I would also like our sister city deals with India to include “great challenges” so the two come together for problem solving and common goals. This adds real energy to the relationship.

The Indian diaspora in Australia can provide the real energy to make this work. We already know External Affairs Minister Dr S Jaishankar is a big fan.

Read more from Observer Research Foundation here:

https://www.orfonline.org/expert-speak/the-twin-connection-revitalising-sister-city-relationships

Jasmine Batra and AICC outlining a thoughtful way to enter the India market

Two organisations that advocate a “more thoughtful” way to enter the Indian market came together last week in a wonderful seminar providing some super advice.

First was the Australia India Chamber of Commerce (AICC) which hosted the event and their Chair, Chris Mooney, put the case for the chamber’s National Industry Groups doing well researched and sequenced steps to engage with India. Each group does research for a white paper, builds a community and knowledge group around it and leads to well prepared India missions.

Second was the keynote speaker, Jasmine Batra from Arrow Digital, who have a program called “The Big Leap” taking clients through a 12 month program of understanding and entering India. INTO INDIA has long advocated that slower market entry produces superior long term results – a strong alternative to the traditional Aussie hasty transactional approach. We love “The Big Leap” concept.

There are three major factors that make India today a very special market – first, the young population with an average age of 28; second, the rise of the tier 2 and 3 cities, including their specialisation, three, India’s global leadership in rolling out digital infrastructure that is transforming business and society.

Jasmine talked about importance of Food, Festivals and Family when thinking about India. “Family” includes what she called “the crazy rich” such as Tata, Ambani and many more. But it also goes right down to small community business families. Your journey will interact at all levels at some time.

Reducing risk is vital. There are three steps you can take. First, understand the cultural context. Second, do market research and find local partners. Third, network community and do due diligence.

In conclusion Jasmine Batra said you should get over there, get around and get partners. By research and regular visits, your more thoughtful engagement with India will produce results.

La Trobe University very kindly provided the venue.

CONTACT AICC

Contact Jasmine Batra

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