Use “smart power” advises leading Australian diplomat

With great clarity and logic, John McCarthy AO, former Australian diplomat, has outlined the three choices for Australian diplomacy – hard, soft or smart power.

McCarthy is concerned that Australia in recent times has used “hard” power and this can bring reputational damage.

https://asialink.unimelb.edu.au/insights/its-time-for-australia-to-be-a-smart-power-country

He describes how “soft” power is often mistakenly seen as just culture or cricket.

And he concludes by describing the “smart power” option.

Brilliant article.

I am sure most of our diplomats and think tanks would agree – but can the politicians wake up to the harm they are doing to Australia’s international reputation?

Will India and Australia achieve “early harvest” trade deals and lay groundwork for a CECA?

Former PM Tony Abbott was instrumental in getting trade talks going again

INTO INDIA believes the two big issues facing Australia are allowing greater people movement from India to Australia, and directing more of our massive A$ 2.3 trillion pension fund sector that could be a regular source of investments in the Indian infrastructure and disinvestment story.

The key for Australia is to see India as more than a “quick sale” – Indian negotiators will be looking to push the two countries to become partners, adopting policies that streamline physical movement, including, on-arrival visas, multiple entry long term business visas, etc.

From India’s perspective, it will want to ensure that trade deficits in the post agreement period do not widen. And two, non-tariff barriers and differences in standards or recognition of qualifications do not offset higher access through the trade deal. As an Indian report recently wrote: “This is the crux of the matter.”

In the larger CECA agreement, investments from Australia will play a big role in the growth of bilateral trade between the two countries, because the growth trajectory of India will create new opportunities for Australian companies, including in areas like water management and up in future, for which Australia can be a long term reliable supplier.

In the early harvest agreement, Australia wants services included with goods – an area where India has not performed well in earlier trade deals such as with ASEAN.

Australia however just needs to accept the sensitivity of the agribusiness sector in India – the deal will fall over if Australia demands substantially lower tariffs across the board for fruits, dairy, agriculture and processed food items.

INTO INDIA RECOMMENDS Australia narrow its ambitions down to selected niche items in the agriculture sector. Finding ways that Australian expertise, technology innovation and scale can actually transform Indian agriculture sector towards value addition would give Australia a big advantage.

Finally, you can expect India could show flexibility in tariff lines related to commodities and minerals, which are needed for its growing economy and the e-mobility program. In turn, Australia could be accommodative in tariff lines related to refined petroleum, medicaments, railway vehicles, gems and jewellery, auto components and made up textile items, which it imports in any case from countries around the world, in addition to India.

Thanks to Confederation of Indian Industry (CII), in collaboration with KPMG and led by Amb Anil Wadhwa, who is Former Secretary (East), Ministry of External Affairs, Government of India.

Launching your startup into India – my 5 key tips

The team that have taken Australian startup CANVA global – India is a market for almost every startup

Launching your startup into India – 5 key tips

Here’s a big generalisation – almost every startup can find an eager market in India.

I say that with confidence, because the Indian economic growth story means demand for everything cannot be met – demand is huge, so that means opportunity for your startup.

But how to approach India?

First – think longer term than you normally do, but keep in mind modern India can be either fast or slow and there is no way of predicting.

Second – leave your ego behind. Pretty much every western company that has succeeded in India has done so on the support of a strong local Indian team across all levels. To do this, they have effectively left their ego behind.

Third – India wants your startup, NOT your culture. Those who struggle typically want to transfer their “culture” to India, so they put their expat team in charge of the local team.

Being preoccupied with transferring “the way we do things in our company” to India makes them blind to “the way Indians do things there” which is the most important insight for future success.

Fourth – use your expat team wisely. Expats can come and go as needed – but your business needs longevity in India and that is what an Indian management team can provide.

Fifth – Smart companies that go into Asia also ensure they hire Asians into the Head Office team, so you have Asians running your enterprise on the ground in Asia and Asians at the right level in HO guiding and advising the HO team.

The future of startups and innovation is looking good for India.

 

Australia told to be partners, not adversaries, with China

Prime Minister Lee Hsien Loong of Singapore and PM Scott Morrison of Australia

Prime Minister Lee Hsien Loong of Singapore gives advice to Australia on China

“China is one of the biggest policy questions for every major power in the world. You need to work with the country. It is going to be there, it is going to be a substantial presence. You don’t have to become like them, neither can you hope to make them become like you. You have to be able to work on that basis, that this is a big world in which there are different countries, and work with others who are not completely like minded but with whom you have many issues, where your interests do align. There will be rough spots … and you have to deal with that. But deal with them as issues in a partnership which you want to keep going and not issues, which add up to an adversary which you are trying to suppress. That is speaking in very general terms, but I think that’s from Singapore’s point of view how you have the best chance of developing a constructive relationship and avoiding very bad outcomes.”

INTO INDIA has long campaigned for Australia to just calm down and deal with the massive regional opportunity (and challenge) that we face.

Such common sense. Calm, rational and accepting of reality.

Can Australia follow this advice?

Emerging Markets Guru Mark Mobius – India a 50-year rally

Emerging Markets guru Mark Mobius is bullish on India

Thanks to my friend Mugunthan Siva, Managing Director, India Avenue Investment Management for spotting this one!

“India is on a 50-year rally,” even when there are quick bouts of bear markets, veteran Emerging Markets investor Mark Mobius mentioned in an interview on Bloomberg Tv. “India is possibly the place China was once 10 years in the past,” he said.

A man of his word, Mark Mobius has allotted nearly half of his emerging-markets fund to India and Taiwan to assist offset a slide in China shares that has dragged down returns from creating nations as an entire.

Mobius’ bullish view on India clashes with these of analysts at Morgan Stanley and Nomura Holdings Inc, who’ve downgraded the inventory market after the benchmark S&P BSE Sensex Index greater than doubled from a March 2020 low.

“Individuals say emerging-markets look unhealthy as a result of China is dragging down the index, however they’ve got to have a look at different areas similar to India which can be going up,” mentioned Mobius, who created Mobius Capital Companions LLP after a profession at Franklin Templeton Investments.

The Mobius Rising Markets Fund has a mixed 45% of its portfolio allotted to India and Taiwan, with tech {hardware} and software program the largest holdings in these markets. Indian software program companies supplier Persistent Techniques Ltd. and eMemory Know-how Inc, a Taiwanese chip know-how supplier, have been amongst its largest stakes as of end-September. The shares have each greater than doubled this year.

8 things we need to know about India

Confident young Indians like these are driving new entrepreneurial spirit

CAUTION – generalisations are just that, and you will almost always encounter those who do not fit in this list. This is offered to assist those visiting India for business, education or tourism.

1. Successful and confident

Economic success has restored Indian confidence. Indian entrepreneurs are now recognized around the world and there is a national expectation that the next Bill Gates will be an Indian. This entrepreneurial spirit permeates the nation (most dream of becoming entrepreneurs) which is now confident.

2. Never forget rural people

Indian business and political leaders may live the urban lifestyles, but they do not forget the small towns and villages at the centre of rural life – and it’s not just the politicians with an eye for votes, with major corporates such as Infosys pouring resources and funding into village developments.

3. Avoid pointing the finger

Indians become instantly passionate when challenged on subjects like their high tariffs, especially if the challenge comes from the west. The message is, point the finger at India and you can expect a robust response.

4. Oceans of patience

Indians have oceans of patience which can drive westerners crazy, but it gives them a special strength in negotiations. This patience is derived from deeply held spiritual views such as impermanence – Indians are constantly reminded of the impermanence of this life, everything changes, and they can wait when often we cannot. Who has the advantage in this situation?

5. Not just an IT miracle

Do not be fooled with the view that the Indian economic miracle is just driven by call centres and IT. Important as these are, look also at insurance, energy, retail, clean technology, manufacturing, pharmaceuticals and even agriculture as areas where efficiency is producing startling results.

6. Not especially “Asian”

While India feels great about the success of “Asia”, in many ways it does not feel particularly “Asian”. First and foremost, Indians feel Indian, and to them that is vastly more relevant than being geographically part of Asia.

7. Remember the “Father of the Nation”

Whether dealing with the young or the old, in India never forget the “Father of the Nation”, Mahatma Gandhi.

8. Equity up there with democracy

Partly because of Gandhi, Indian leaders are more concerned with equity than with spreading democracy around the world – and cannot understand the enthusiasm of the USA and its allies to champion democracy in unlikely locations.

India now chasing trade deals – having resisted for decades

Indian PM Narendra Modi meets recently on trade with former Australian PM Tony Abbott

What has changed for India? It seems that having resisted trade deals for years, it now plans by the end of March 2022, to complete multiple quick-fire bilateral trade agreements.

Something has not changed however – the Indian government, distrustful of full scale FTA’s, is prioritizing “early harvest” pacts over comprehensive free trade agreements.

What has changed is the pandemic and the rise of China.

Therefore, the Indian government is focusing on strengthening the trade with G-7 nations with strong Indo-Pacific strategies and those with growing influence in central Asia such as the United Arab Emirates.

Australia, at a key position in the Indo-Pacific, is a high priority. As a fellow member of the QUAD, India and Australia have never been so close strategically and are keen to add trade now.

In large part, this is India’s push to do well as supply chain realignments take place – there is only a narrow window of opportunity to get these deals done.

How big is this? The government is negotiating bilateral trade agreements with 20 countries and expects to complete half a dozen deals, including those with Australia and Britain by this December and March 2022. 

India is ambitious – Mr. Piyush Goyal has set kept a target of US$ 400 billion for annual merchandise exports – almost 38% higher than US$ 290 billion achieved in last year and plans to achieve US$ 2 trillion annual merchandise exports by the end of this decade.

Outcome? Lots of deals that will not be quite world class Free Trade Agreement (FTA) but which will have some wriggle room.

India and the USA have very different world views – the 10 differences

Indian PM Modi meets with US President Biden in the White House recently

There has been a lot of talk recently about India becoming part of some formal military alliance with the US – in response to the rise and actions of China.

But is this likely?

Here are 10 key differences in the world view of India and the USA

New Delhi is wary that any formal alliance with the US could draw it into almost constant military activity such as the Iraq war

India prefers to do its own strategic deals on a country by country basis – rather than manage these through a dominant US strategic alliance. For example, India and Australia have a Mutual Logistics Support Arrangement allowing each to uses each other’s bases

Historically India has never agreed to open-ended commitments that might lead to future military involvement

Of the four countries speculated to be invited to join the Five Eyes security arrangement (the four are Germany, India, South Korea and Japan) – India is the only one of these four to NOT have a treaty alliance with the US

An example of differences between India and the US is Iran and the Nuclear Non-proliferation Treaty (NPT) – the US attacks Iran on the nuclear issue, sees the NPT as something to be enforced – but India has not signed the NPT itself and sees it as discriminatory

There are differences on the “threat” from China – the US is most assertive on freedom of navigation in the South China Sea while India has been quite reserved on this issue

India is more concerned about its Himalayan border conflicts with China than the South China Sea

India generally has little or nothing to say about human rights issues in other countries. Whereas the US and its allies such as the UK and Australia are constantly calling out human rights abuses around the world

The US wants “all in” commitment from allies but India has always been non-aligned and refuses to get drawn into “us versus them” views of the world. One current example is India is finalising a logistics deal with the UK while also negotiating a similar deal with Russia

India is content to be “the world’s biggest democracy” but is not evangelical about it, accepting that all countries are different – a sharp contrast to the US wanting to remake countries in its own image and championing democracy for all

Tony Abbott might have overstated it – but he is more right than wrong on India

Tony Abbott wants Australia to make a big shift towards India and away from China.

Despite some hysterical responses from two former Aussie PM’s, Tony Abbott has by and large got it right on India and we should work towards the closer relationship he believes is possible – and necessary!

Consider this verbal stoush:

“The answer to almost every question about China is India. Although currently not as rich as China … India is perfectly placed to substitute for China in global supply chains … India has revived the Quadrilateral Security Dialogue, and the first in-person Quad summit is expected before the end of the year. Under Modi, India has invited Australia to join the annual Malabar naval exercises that will soon involve India, the US, Japan, Australia and also the UK … It will be an impressive show of strength, demonstrating the democracies’ commitment to a free and open Indo-Pacific … If Australian business and officialdom were to make the same effort with India that they’ve long made with China, there’s potential for a ‘family’ relationship with India that was never likely with China.”

– Former prime minister Tony Abbott in The Australian (10/8/21)

“No, (Abbott’s comment) is just wrong. We all agree our relationship with India has been underdone over the years … India has got a very deep longstanding protectionist political culture. They weren’t even prepared to sign up to RCEP … You have got to be realistic about what you can achieve in terms of trade. They are different countries, different economies. We should be aiming to have much stronger deeper relations with India …  Every prime minister should and will do that. But the idea that can sort of delete China and insert India is just nonsense.”

– Former prime minister Malcolm Turnbull at a La Trobe University webinar (10/8/21)

“We have got to be deeply realistic about one thing (about the Quad). Is it the assumption of future Australian governments, like Tony Abbott’s view in today’s press, that the Indian navy is going to go steaming into the South China Sea to defend Uncle Sam’s interest if the balloon goes up over Taiwan? I think not   …  We need to ask some very hard military questions about the core strategic utility of this (the Quad) for the longer term … We need to go into this with wide eyes open, not the blithering idiot remarks we’ve seen from Abbott in today’s newspapers.”

– Former prime minister Kevin Rudd also at La Trobe University

“The one thing we should not be doing is saying to India, this is to line you up to be the next member of ANZUS to take on China. I agree with what Kevin said, that equally just plays into the paranoia of China … We have to just move gently, avoid extravagant language (with India) …  Frankly, extravagant claims of the type we were talking about a moment ago are not helpful.”

– Malcolm Turnbull again

“India is the world’s emerging democratic superpower and my god don’t we need another democratic superpower in the world right now. Isn’t it so important that a country like Australia do everything it can to ensure India does take its rightful place up there at the head of the world’s great democracies.”

– Tony Abbott, Australia India Address (17/8/2021) 

Well, what do you think?

India’s EdTech has a huge boost due to covid and home learning

Harsh Rajan and Nirmla Sankaran founders of HeyMath – an E-Learning, online Maths coaching institute in Chennai.

India’s online education sector has really taken off as the pandemic led to school closures and a big part of the 250 million school children switched to online learning.

Investors are attracted to the large number of startups and unicorns in EdTech.

It’s an industry that will be worth nearly $2 billion by next year and is producing unicorns such as Byjus and Skillmatics.

Even with this dramatic growth, online education is touching only a small fraction of the Indian education market, so the future is strong.

A further boost for EdTech is the new National Education Policy (NEP), which looked at addressing the challenges and extending the scope of right to education (RTE) to students aged 3-18 years, with a key recommendation to harness edtech through app-based learning, online student communities, and lesson delivery beyond ‘chalk and talk’.

According to estimates by DataLabs, there are a total of 4,450 edtech startups operating in India, spread across various segments such as test preparation, e-tutoring, online certification, skill development, online discovery, and STEAM kit and enterprise solutions.

Educational delivery will no longer be either fully online or offline but a hybrid blend of both worlds.

For countries like Australia, India has an appetite for almost all of the EdTech innovations coming through.