Culture eats deals and even foreign policy for breakfast!

I write a lot about the vital role “culture” plays in doing business – especially in the context of the west and India. When things go wrong, generally the source is culture. Culture outlasts the deal and it is bigger than the contract.

The point about culture was researched at the University of Melbourne in 2013 by Dr Kadira Pethiyagoda in a doctoral thesis “The influence of dominant cultural values on India’s foreign policy.”

If you were wondering how India could simultaneously be friendly with the USA and Iran, culture has the answer.

The thesis identified four Indian cultural values that have survived the course of history – non-violence, hierarchy, pluralism and tolerance.

These cultural values have a significant influence on India’s foreign policy overall.

The most powerful value is non-violence.

The research found several non-violence driven preferences: global peace; caution in the use of force; and the preference for maintaining a non-violent image.

Hierarchy is found to be more influential in India’s nuclear posture than in its approach to humanitarian intervention. This value drives a preference for India rising up the global hierarchy of states.

Pluralism and tolerance strongly impact India’s approach to humanitarian intervention. These values support a pluralistic and tolerant worldview, the preference for sovereignty, and the preference for caution in condemning the internal actions of other states.

The author has a book out titled “Indian Foreign Policy and Cultural Values” which makes a major contribution to our understanding.

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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.

India to benefit from Industry 4.0 says head of Rolls Royce

The fourth industrial revolution also known as Industry 4.0 or a new age of connected technologies and data-driven insights is now upon us and is changing the way we live, work, and interact with each other.

One of India’s inspirational business leaders is Kishore Jayaraman, President, Rolls-Royce, India & South Asia. He has a vision for India and Industry 4.0.

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Industry 4.0 is all about innovative technologies, such as artificial intelligence (AI), mass automation, industrial communications, Big Data, robotics and 3D printing.

According to HSRC’s “Global Industry 4.0 Market & Technologies 2018-2023” report, the global Industry 4.0 market is projected to reach US$214 billion by 2023.

The Indian government estimates India’s manufacturing sector would breach US$ 1 trillion by 2025.

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But Kishore Jayaraman (pictured above) warns that Indian manufacturers need to move beyond the current status, characterized by manual inputs, lack of ICT integration in manufacturing, and critical gaps in capability, to move to the next stage and fill the critical technology gaps.

He says: “To that end, government’s ‘Make in India’ initiative is providing the groundwork for both small and large companies to develop advanced manufacturing capabilities and invest in technology upgradation.

“Additionally, programmes such as green corridors and smart cities have been launched to support critical technology interventions across various industries. Besides creating jobs, these initiatives appeal to a new generation of workers with different values and skills that boost synergies,” he said.

Here’s how he sees India benefiting from Industry 4.0:

First, it will allow manufacturers to improve productivity, efficiency, safety and performance and help position India as a global manufacturing hub.

Several Indian e-commerce companies are using advanced data analytics to gain insights on customer behavior and improve business performance. Likewise, manufacturers can implement data analytics to improve forecasting, predict and prevent manufacturing downtimes, manage supply chain and enhance production capacity and quality.

Second, Small and Medium enterprises (SMEs), which form the backbone of Indian manufacturing, can leverage Industry 4.0 technologies to become more agile, enhance productivity, streamline costs and reduce risks.

Third, employers will be able to increase the skills of their workforce. While some jobs may be lost, new ones will be created in the new economy. New technologies inadvertently require new skills and trained Industry 4.0-ready workforce especially in areas of cognitive robotics, advanced automation and industrial ICT. Training in safety-related skills will also come into play with an increased level of human-machine cooperation.

Finally, Industry 4.0 could provide a pathway for Indian manufacturing to transform to an innovation-led and high-value manufacturing stage. Technology-intensive sectors such as the Aerospace & Defence (A&D), which is at the cusp of innovation and growth in India, are clear beneficiaries.

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At Rolls-Royce, Industry 4.0 is a critical aspect of business and strategy – using connected systems to make better decisions. This brings together a number of technologies, such as the Internet of Things, intelligent manufacturing, digital product verification as well as virtual design and simulation.

 

Indian startups are driving growth and change

There are many drivers of India’s economic growth and transformation – but certainly punching above their weight are Indian startups.

There were over 50,000 startups in India in 2018.

India has the third largest startup ecosystem in the world.

The success is partly driven by corporate India (which is providing much of the funding) and by the Indian Government policies.

Bengaluru is in the world’s top 20 startup cities and ranks in the top 5 of the “fastest growing”.

Some of the best known Indian startups include Ola Cabs, Snapdeal (e-commerce), OYO (hotels), Swiggy (food delivery), Big Basket (food e-commerce) and BYJU’s (ed tech).

Watch this space.

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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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”.