India’s pharmaceutical industry shows how we are all connected today

India plans to set up a US$ 1.3 billion fund to boost the manufacture of pharmaceutical ingredients domestically.

How so, since India is already a big pharma player? For example, India supplies about 20% of the world’s generic drugs and is the world’s largest exporter.


Well, in pharma as in everything else in life, all things are connected.

You see, India’s supply chain was disrupted due to the coronavirus pandemic – exposing the country’s dependence on China.

Here’s where “we are all connected” comes in – India is indeed a global leader in pharma but it imports almost 70 per cent of its active pharmaceutical ingredients, the chemicals that make a finished drug work, from China.

Which part of China provides the ingredients? Hubei province, the epicenter of the coronavirus outbreak has been major source of these ingredients.

The new program consists of spending on infrastructure for drug manufacturing centers and financial incentives of up to 20 per cent of incremental sales value over the next eight years, according to a government statement.


India – how Australia’s trade will change and how we should communicate

In the 1990’s, Australia sold India coal and LNG. We also sent over copper, lead and gold, along with unprocessed foods such as chickpeas, lentils, almonds and oils.

According to India veteran Michael Moignard (pictured) of East West Advisers, it was the beginning of our trade relationship with India – so that makes it very recent.


In the 2000’s our trade has shifted – uranium is in there but taking the prize has been education in the form of fee-paying students in Australia. Along with this has been IT and processed foods, with wine and packaged goods finding a market. Finally, Indians discovered Australia as a tourist destination.

So, what will the 2020’s look like?

Michael Moignard was our Senior Trade Commissioner in Delhi for 7 years, so it was good that he gazed into the crystal ball at a recent India seminar at BDO. This is what he saw:

“Sustainability” will become a big theme, covering services and products around water, waste, renewables and smart cities. That’s a big shift.

Education will continue to dominate but with a move to skilling India’s workforce – in India. And IT will blossom into IoT, Ai and more.

Continuing strong will be wine, packaged goods and tourism.

In short – it’s a good picture for Australia. Hope you are ready to participate!

Mike’s advice on how to approach India:

  • Don’t just think about selling your product and services to India (just sales and profits should not be the only motive)
  • Work together to create relationships, trust and mutual value (Indians value trust and personal relationships)
  • Ensure Indian counterparts understand you are there for the long haul…and not just for short-term profits
  • Don’t give the impression that your India strategy is just a diversification from China (and India is definitely not the next China)

Oh, and his final tip, use the phone much more and the emails much less.


These India numbers will boggle your mind but the future is more exciting

Here are some India and Australia numbers to contemplate:

(Thanks to Bill Cole, Partner International, BDO, pictured below, for some of this data)



  • Population: 24.6 million
  • GDP: USD 1.3 trillion
  • Top 5 Imports: Personal travel services, motor vehicles, refined petroleum and ships
  • Top 5 Exports: Iron ore, Coal, Education travel services, natural gas and personal travel services


  • Population: 1.339 billion
  • GDP: USD 2.5 trillion
  • Top 5 Imports: Petroleum products, gems, electronics, chemicals and machinery
  • Top 5 Exports: Textiles, Gems, Chemicals, Products and Agricultural products

Top Trading Partners

Australia’s top 3 trading partners are China, Japan and the USA.

India comes in at number 7.

India’s top trading partners are China, USA and UAE, with Australia coming in at number 20.

So, what about the future?


Australia’s India Economic Strategy to 2035 Report:

  • Recommends that by 2035 Australia lift India into our top three export markets, make India the third largest destination in Asia for Australian outward investment and bring India into the inner circle of Australia’s strategic partnerships
  • Identifies 10 sectors where strengths of Australian businesses match India’s needs:
    • Education (flagship)
    • Agribusiness, resources and tourism (lead)
    • Energy, health, infrastructure, financial services, sport, science and innovation (promising)

It is sure a “big picture” report – but with the right approach it can be achieved.


Seems PM Modi and PM Morrison are getting on well – so time for business, investment and education to pick up the baton and run with India. Ready?

Where to from here for the Coronavirus and India investments?

Where to from here for India?

India Avenue Investment Management – an Australian fund for India – has issued advice regarding the impact of the Coronavirus on investing in India. Here are some highlights:

As we have always articulated to investors, India is a market where you should build exposure during dire times as the structural story will outlast any cyclical events.

It’s a matter of portfolio construction and investment horizon. When it comes to satellite investments like investing in India, investors typically tend to sell during adversity and buy during euphoria.

As a business we seek to improve this experience for our investors by providing our insights of activity on the ground in India.

Globally markets around the world peaked on February 20th, 2020 and since then have fallen roughly 20% in local currency terms (S&P500). Currencies have also been moving around in a volatile fashion.

In India, markets have fallen approximately the same amount.

However, a corporate tax cut, bank recoveries, improving GST collections and a pick-up in PMI’s indicated most positive news was on the way in FY21 (India’s financial year is April-March).

The Coronavirus won’t stop India’s structural growth resuming its path at some point in FY21, however, it will impact global growth in at least the first half of 2020 and therefore India’s growth.

Whilst India doesn’t have significant links to the global supply chain (exports are only 11% of GDP), it benefits when global growth is strong given comparative advantages in exports of refined petrochemicals/oils, gems/precious stones, textiles, electronics, pharmaceuticals and automobiles.

However, the key risk for India is the virus making itself a home amongst India’s significant population of 1.3bn and the potential for it to spread quickly, without appropriate healthcare systems and medication for all.

We cannot estimate what the damage will be to markets, but we see the following positives: • Central Bank potential to cut cash rates significantly from the current 5.15% • US$475bn of forex reserves to defend the currency if required • A substantial fall in the oil price which will reduce inflationary pressures in India (India imports over 80% of its oil usage) • Fiscal stimulus likely to be forth coming • Potential to replace China in certain aspects of the global supply chain, given most are now seeking diversity of supply.

For those who have invested in our Fund, the next week or two (which we expect will see heightened panic amongst investors), will be a good time to add some further funds as India is well positioned to rebound as it often does from adversity.

However, how much bravery you have will determine when you invest!

It is not very often that you can identify an investment where you can buy quality growth stocks at P/E’s in the teens and cyclical growth for single digit P/E’s in a market like India. We are re-aligning our Fund to go overweight in the both these segments.

Thanks to India Avenue Investment Management for the above insights

Melbourne and Victoria leading the way on India growth story

My home town is leading big time on engagement with India.

Michelle Wade, Commissioner to South Asia, State Government of Victoria, Australia, outlined some of the facts in a recent speech to a BDO event “India – it’s time to diversify”.

Melbourne and Victoria are dominant in Indian student numbers, we have close on 180,000 Victorians who were born in India plus on tourism we lead the way.

According to Michelle Wade, trade and investment opportunities abound for us in India – including advanced technologies, edtech, health and wellness.

One key to doing well is to drill down and find organisations with the right capabilities, according to Wade.

BTW Victoria has business offices in Mumbai and Bengaluru – and have been very helpful to me.

Which Victorians are doing well in India? A few from the big list – Linfox, Deakin University, Rubicon Water, MedSurge, Monash University and Swisse.

Time you engaged with the India growth story?

India in the frame is it plans to open education to foreign investors and institutions

Global education is watching as India moves to allow foreign investments in education.

The recent Union Budget signalled India plans to ease rules on foreign investments in education and open up the regulated sector. The budget proposed to encourage foreign direct investment and external commercial borrowings (ECBs) in education.

It is timely – India’s education sector is “capital starved”.

We have to wait for the actual rules, but it looks like the government may allow foreign education players to repatriate a portion of their income in India instead of requiring them to plough back all their earnings into their Indian operations. This would remove a key restriction that academics and experts have flagged for years as a disincentive to foreign investment in education.

The outcome of all this could be more global investment into existing Indian institutions, plus more foreign education institutions opening up in India.

This would be change on a radical scale. It’s needed – India’s education sector is struggling at all levels.

Finance Minister Nirmala Sitharaman (pictured above) said in her budget speech: “It is felt that our education system needs greater inflow of finance to attract talented teachers, innovate and build better labs”.

Please note – though FDI in education through the automatic route is already allowed, it has largely remained confined to the unregulated education technology space.

Expect innovation. Many European campuses are looking at opening special centres within Indian partner universities, rather than going it alone.

Plus greater global collaboration in delivering degrees could be a great outcome – so the student experiences both the Indian and the overseas providers.

So – here is what we are waiting for – the Centre needs to frame rules to ease both fund flow to India and institutional collaboration and how a foreign educational player investing in India will be allowed to take back money that they make in India.

Watch this space…

Melbourne seminar on India has best expert panel

BDO has assembled Melbourne’s best India panel to speak on Tuesday 3 March – book now – free event. Email

They have a great line-up of speakers:
Michelle Wade, Victorian Trade Commissioner for India, Bengaluru
Susan Coles, Deputy State Director, Victoria, Department of Foreign Affairs and Trade
Bill Cole, Partner International, BDO
Sandeep Khurana, Director, EastWest Advisers
Michael Moignard, Director, EastWest Advisers

I am proud to be the MC of this one.

Venue: BDO, 727 Collins Street Melbourne
Date: Tuesday 3 March 2020
Time: 12 noon start (lunch will be provided)

Pictured below: Bill Cole, Partner International, BDO