7 ways Australia could build relations with India to balance China

While it is true that India is not just another China, there is a good risk management case for improving Australia’s trade and diplomatic relations with India.

To give energy to this relationship, Australia should take eight urgent steps:

(Keep in mind most of this relates to “post-Covid” but some could action now)

First, we should be flat out campaigning to get more Indian tourists down under. They now have the money, and a campaign for tourism would also communicate our culture to the broader Indian public. Let’s get Australia on the billboards, on the cable TV and in the cinemas in India.

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Second, encourage Bollywood to make more films down under and help them show the diversity of the Australian population and culture.

Third, reinforce our intellectual property and leadership in the twin areas of high demand over there – health and education.

Fourth, take more initiatives to exchange knowledge and services in the waste management and waste disposal fields – we are pretty good in this, with some of the cleanest cities in the world, and India is worried that rubbish is taking over their country.

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Fifth, create ways we can work closer on sustainable energy.

Sixth, make sure Indians are aware of our global leadership in fields such as wealth management, a growing need over there. The best way to do this would be to increase our investment into India.

Seventh, provide cultural training to Australians in all fields who are to visit India, so that our blundering around (which we often see as down to earth and friendly) does not continue to cause offence or confusion among our hosts.

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.

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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.

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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.

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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.

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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.

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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.

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“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.

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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.”

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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.

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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.

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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.

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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.

 

 

Stop seeing India through the lens of someone else’s trade war

Things get a bit biased in the west, and right now China is seen by politicians as a negative – even if most western economies rely on China trade.

The mythology from politicians is that their country – including Australia – should look at “diversifying” trade targets away from China.

Thinking of India as an “alternative” to China is a bit disrespectful of India and setting up for failure. Seeing India for what it is – a really good opportunity but on a different scale to China – will lead to better commercial and political decisions.

Let’s not look at India through the lens of someone else’s “trade wars”.

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When it comes to the world, China is the big game. India and Indonesia are also in the game and worth playing with, but each needs to be respected for what it is.

Take the 2017 Foreign Policy White Paper which reported that growth in demand through to 2030 from China would be greater than that from the US, Japan, India and Indonesia combined. China’s rapidly expanding middle-class market is the big market.

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Even the Peter Varghese report on India’s potential showed that by 2035, Australia might export $45 billion of products and services to India. That would be great news! But compare that figure of $45 billion (and it’s 15 years off) with last year when Australia exported more than $160 billion to China.

When we remove the blinkers of politics, we can treat each country with respect and see the actual opportunity they represent.

We can open our eyes to a better view of trade – seeing it as part of the overall relationship of friendship with trading partners.

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Why Australia makes diplomatic errors in Asia – Article 4

Pictured – Julie Bishop was an exceptional politician and Australia Foreign Minister – preferring behind the scenes discussion to public brawling

Australia is well represented in Asia by outstanding diplomats, but most are frustrated that too much of their time is spent repairing relationships after public outbursts from down under.

Today’s good diplomatic work leads into tomorrow’s diplomatic problem – one step forward two steps back diplomacy.

What is to be done to change Australia?

Short term, although the public is suspicious of “junkets” we need to send our politicians (and aspiring politicians) regularly to India and China, charged with building relationships that build through regular telephone follow up.

Being able to make that call across a range of levels is effective communication with cultures that are collective, like most of Asia. Every MP becomes a diplomat.

Also building on the relationships that exist through our very large Indian and Chinese diasporas would make sense, and we just need to sit down with them and work out how to leverage their networks.

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Of course, it would also be good if our political leaders listened to their diplomatic advisors before rushing into public commentary – but that might be wishful thinking.

This is an entrenched problem and the solution is long term.

We need to produce a generation of culturally sensitive and adaptable students. Any move to increase student exchanges will pay off long term in relationships and cultural understanding. It has to occur at every level of education with creative ways for primary and secondary schools to make Asian connections.

Australia has pulled off the miracle of creating multicultural Australia and we accept the need for sensitivity and adaptability to other cultures at home – we now need to do the same abroad.

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Finally, for leaders at all levels, please, no more “lecturing”. No Asian country welcomes a public lecture from the west – it is seen as not respecting the achievements of the Asian country and, given our history of colonial exploitation, it is just another instance of the west’s superiority complex. In other words, it’s a bit hard to take from their perspective.

The Father of the Indian Nation, Mahatma Gandhi, understood the Indian public and their sense of being exploited by the west. When asked what he thought of western culture he replied that it would be a good idea.

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This is the fourth article on “Why Australia makes diplomatic errors in Asia”. 

Australia should join with India to become the “food bowls” of the Indian Ocean

India and Australia can become the major “food bowls” of the Indian Ocean region, if the two countries can find a way to collaborate in horticulture  The region includes some of the world’s fastest growing middle classes, including much of Africa, the Middle East, India and its neighbours and Southeast Asia.

This is one of the conclusions of our study of “India-Australia Horticulture Collaboration” which was part funded by the Australia India Council, DFAT.

The Indian horticulture sector already faces pressure for change, presenting Australia with a once in a lifetime opportunity to build a collaborative commercial relationship with India.

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Pressures for change in India are market driven as the middle class grows, Government driven with a push to bigger farms, mining industry driven as it seeks to play a positive community development role and horticulture industry driven, as farmers want innovation as a pathway to better incomes.

Indian market becoming health conscious

Market driven changes result from a growing middle class anxious about the content, health outcomes and quality of the vegetables and fruits they buy. Plus, a whole range of vegetables labelled as “exotic” in India now face rapidly rising demand – broccoli, cherry tomatoes, capsicums, parsley, celery, cabbages, zucchini and asparagus. Berries are becoming sought after, especially blueberries and strawberries.

Government driven changes are creating one of the biggest historical shifts in rural India – the new Farmer Product Organisations (FPO).  The Government has set an aim for 10,000 of these collaborative ventures. An FPO is a grouping of at least 10 and up to 500 farmers into a collective including marketing. The Government will fund these FPO’s and possibly farm subsidies will be distributed via them.

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The FPO structure is currently in need of support services to enable them to secure business acumen, market linkages, better insurance terms, quality assessment infrastructure, precision agriculture solutions for better crop management, access to finance, IoT based applications and more.

At the same time India’s agricultural research centres (Central, State and private) are very keen to be part of the solution and become a focus for knowledge and training in horticulture techniques new to India. Their demand for displays and services around hydroponics and protected cropping is very high.

Miner driven changes result from delays and obstruction from farmers, and awareness that by supporting horticulture innovation around mines, they can contribute to increasing the income of farmers and provide new income for rural women – thereby making a contribution to the livelihoods of the communities they operate in.

Indian farmer driven changes follow complaints of declining incomes and knowing they have an inability to meet the needs of the new middle class, at home and in the Indian Ocean region. Women in rural communities are seeking new ways to add income to households.

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While farmers are traditionally conservative, there is growing awareness in India of the need for “new skills and innovations for new products”.

India will want collaboration, not high pressure selling

Facing these demands for change, India is not inclined to simply import and adopt western approaches – rather, it seeks to create Indian style innovations with global partners who can adapt to this demand. The Israel and Netherlands governments have established free standing centres of horticulture excellence, with low levels of interest and participation. Australia can move into this space if it is prepared to adapt to what India wants.

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What will be needed for these changes? Skills training and train the trainer programs, IT systems, adapted hydroponics and adapted protected cropping systems and products, post-harvest storage and to market systems and a combination of displays and training at Government and private research centres (not free standing).

Protected Cropping (PC) opportunities are huge but need to be tailored for India – including shelter by artificial structures and materials, enabling modified growing conditions and protection from pests and adverse weather. In the mix here are greenhouses and glasshouses, shade houses, screen houses and crop top structures.

Hydroponics and Controlled Environment Horticulture (CEH)

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The most modern and sophisticated form of protected cropping have been developed in Australia and we should be able to export this knowledge – might be relevant to corporate farms in India with some key adaptions, creating “modified hydroponics”. CEH combines high technology greenhouses with hydroponic (soil-less) growing systems. CEH makes it possible to consistently and reliably control or manipulate the growing environment and effectively manage nutrition, pests and diseases in crops.

Hydroponics in Australia and the west is crop production using a soilless growing medium with nutrients supplied in a liquid form. The choice of substrate can be varied to suit the crop and climatic requirements. Hydroponic growing also includes growing in a flowing nutrient stream without utilising a solid medium. This is known as nutrient film technique. For India, some adaptation of drip irrigation, soil and non-soil bases leads to “modified hydroponics” and would meet demand over there.

Agricultural research centres in India play a major role in supporting farmer innovation and skills upgrades. There is an opportunity for an Australian Centre of Protected Cropping and Hydroponics to be embedded in at least one of the Indian Government agricultural research centres, another with the State of Tamil Nadu and in a private research centre. These could be supported by a “virtual centre” with farmers accessing it via mobile phones.

This would be a major step forward in building a genuine India-Australia collaboration in horticulture, enhancing the capacity of both countries to become the food bowls of the Indian Ocean.

 

The “Developing India-Australia Collaboration in Horticulture” research project by Genesis Horticulture Solutions was part funded by the Australia India Council, Australian Government

 

Indian PM Modi announces A$400 billion stimulus policy

Indian prime Minister Narendra Modi has announced a A$400 billion stimulus package, one of the biggest in the world’s responses to Covid19.

The package is approximately 10% of India’s GDP.

The stimulus package is called “Atmanirbhar Bharat Abhiyaan” and aims to make India self reliant and to revive the stalled economy.

Details are still coming out but part of the program will be major reforms across areas such as land, labour and liquidity laws to underpin a boost to the “Make in India” campaign.

Other areas will likely include supply chain for agriculture, reforms to national taxation, simplification of some laws, build capable human resources and strengthening the financial system.

It is typical Modi – ambitious, unexpected in magnitude and investors are already reacting with enthusiasm.