You’ve gotta love Jacob’s Creek wines – consumers in India are loving it!

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.

Wow – this is a scene from the South Australian vineyards of Jacob’s Creek

Vishal Kampani, JM Financial, applauds the Indian budget

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.

Read more at:

https://www.fortuneindia.com/macro/budget-to-propel-growth-but-implementation-is-the-key/105141

India Budget 2021 – analysis by Nangia Andersen India

Rakesh Nangia, Chairman, Nangia Andersen India

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”

We hereby present the ‘India Budget 2021: Snapshot with Industry Experts’ Take

Will your “reset” include new approaches to India?

Australia and India have never been closer. The last year has seen major advances in strategic and defence engagement and cooperation.

Now, as business and organisations reset, does India play a role in your future plans?

Growth in India is outstanding and assured – largely because of a young population boosting domestic demand.

It is a complex and very different market, but one which rewards the right entry strategy and long term engagement plans.

Time for India to be part of your reset?

Business and investment can ride the wave of closer relations between India and Australia

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.

Here is the link to his article:

https://timesofindia.indiatimes.com/blogs/toi-edit-page/what-we-have-in-common-wonderful-coincidence-of-republic-day-and-australia-day-indicates-our-natural-partnership/

India releases its first ever “Australia Economic Strategy” as the two countries move closer

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.

India and Australia could lead a prosperous and peaceful Indian Ocean Region

The AES is India’s response to Australia’s An India Economic Strategy to 2035 (IES), launched two years ago.

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.

Conclusion

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.

Bill Gates says India is one to watch for tech innovation

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.

6 steps to bring India and Australia closer in 2021

6 steps to strong India-Australia ties in 2021

  1. Australian Prime Minister Scott Morrison and Indian Prime Minister Narendra Modi get on well – they can turn that into specific outcomes by continuing the close dialogue.
  2. PM Modi is a politician who likes to think outside the square, so innovative ideas from Australia will be welcome in Delhi.
  3. Two-way trade is at around A$30 billion and can grow – aiming for slow and steady rather than dramatic boosts will work well for both sides.
  4. Food security and food quality provide collaboration opportunities for both countries. India offers the advantage of diversifying Australian global agricultural exports away from wheat and beef and towards vegetables and fruit.
  5. More interaction at all levels of politics (State and Federal, Ministers and Members) will help because India is a complicated political puzzle with Modi pushing more decision making down to state level and competition between states is increasing – and there are 29 of those!
  6. Creatively looking for ways to collaborate will work well and move our trade from “transactional” to “relationship”.

With these steps we will see strong India-Australia ties in 2021.

Can China become a likeable, trusted power?

China is living in a hostile external environment – mostly of its own making.

Recent aggressive rhetoric plus trade restrictions on Australia and border battles with India are leading examples of how China is projecting itself and the world is worried.

But China also means to become moderately prosperous by 2035. It will need to overcome global misgivings if this is to be achieved.

Andrew K.P. Leung is an independent China strategist and has written about this for the South China Morning Post.

Here are 10 steps China should take, according to Leung

First, get the message firmly across that China is neither able nor willing to unseat the US as the global superpower. China cannot compete with America, which has a military presence in 80 countries and whose military expenditure is 38 per cent of the global total – more than the next 10 countries’ combined.

Second, cut out the wolf warrior rhetoric, whether in diplomacy or on social media.

Third, work with the US and the World Health Organization to end the global pandemic.

Fourth, actively cooperate with the Biden administration on climate change.

Fifth, conduct regular joint naval patrols with the US forces in wider waters of the South China Sea.

Sixth, set aside territorial disputes and work with neighbouring countries in the South China Sea on the joint management and exploration of natural resources, including fisheries, habitats and deep-sea energy resources.

Seventh, embrace free and fair trade. For starters, seek to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which a Biden presidency may wish to join too.

Eighth, China should help North Korea become a rising economic powerhouse like Vietnam.

Ninth, reform the Belt and Road Initiative. Make it more transparent and include more participants.

Tenth, meet more milestones on the path to reform and opening up, whether or not they have been set in the 14th five-year plan – including issues like market reciprocity, state-owned enterprise subsidies, transparency, rule of law, human rights and goals including technological self-reliance and quality growth.

Leung writes that China has vowed to double the size of its economy and become moderately prosperous by 2035.

China is unlikely to act on Leung’s 10 suggestions – but to move on some would send positive signals to the world.

Andrew K.P. Leung is an independent China strategist. 

 andrewkpleung@gmail.com

7 fatal mistakes in Indian market entry

India is super exciting, vibrant, colourful and amazingly friendly. People are accessible and available. Deals can be signed and MOU’s are much loved. The population of over 1.2 billion is soon to become the largest in the world and is soon to overtake China.

While India will probably not be “another China”, it is becoming a global power in its own right and an economy that will soon not be too far behind the USA and China.

So, it makes sense to be there real quick, yes?

YES be there – but watch out for these fatal mistakes

  1. Trying to do the whole country at once will exhaust and confuse you – even Indian companies take years to cover it. Select your best one or two points of entry and the rest will follow.

2. Going in quick on price might seem exciting – but who is actually winning out of this deal? You become a disposable and cheaper provider – so your future is very short term.

3. Appointing the first person who says “yes” seems exciting and then nothing happens. Later you might work out every Indian says “yes” – in their culture, they have to. It takes time to find a “yes” that is real.

4. Focusing on injustice, slums, inequality and the Indian way might be something you think is important but of course it is pretty offensive to your hosts. Sure the traffic is diabolical, but there is no benefit in whinging.

5. A short time frame such as one year is a real killer for Indian market entry. It needs to be a minimum 3 years. If you cannot give it time, go somewhere else.

6. Going it alone sounds brave – but is stupid and wasteful. India is all about relationships and collaborations. And you will need “hand holding” by someone who knows the ropes.

7. Ignoring cultural differences is a recipe for misunderstanding and disappointment. Cultural differences between India and the west are massive – and what we have in common is also massive. You need to understand them both.