India a prime target for Aussie exports and investment – Austrade

Austrade’s Ashley Brosnan puts the case for Australian businesses to quickly get into India:

Australian businesses continue to see opportunities across a range of sectors including education, mining and resources, infrastructure, agri-food, and digital services. Thanks to the steady success of some great Australian brands, Australia is already a trusted supplier and investor.

However, India remains a challenging place do business. Expansion requires a high degree of market literacy and on-the-ground experience. Local partners help exporters and investors to navigate markets and regulation – and these partners can prove invaluable.

Despite this, the Government of India has signalled that India is ‘open for business’. It is emphasising investment and competitiveness as factors that will support the economy and encourage a return to growth.

The effects can be observed already in global rankings. India has moved up 63 places in the World Bank ‘ease of doing business’ rankings in recent years.

Austrade is helping Australian companies to explore India

The Australian Government is investing heavily in developing commercial links between Australia and India. The Australia-India Comprehensive Strategic Partnership agreed by Prime Ministers in June 2020 creates further opportunities for Australian business.

The Partnership seeks to build supply chain resilience between the two countries. It strengthens and diversifies trade and investment links with a focus on education, critical minerals and technology cooperation.

Today, Austrade posts across India are working intensively with Australian businesses to understand market, identify opportunities, make connections and help companies negotiate contracts.

India consumer spending skyrockets

India’s consumer spending a “revolution”

Austrade’s Ashley Brosnan on India’s consumer spending “revolution”:

The biggest revolution taking place is the rapid rise of a huge, diverse and wealthy consumer market. Despite the impacts of the pandemic, domestic demand is likely to be a major driver of recovery and growth over the next decade, making up 60% of the overall economy.

E-commerce is taking off as smartphone usage multiplies. India already has over 1 billion internet users and the digital economy’s contribution to GDP is projected to grow 15–20% by 2024.

Incomes are also rising strongly. India’s median income per household is expected to reach A$13,867 by 2025. The World Economic Forum considers that consumer expenditure in India will grow by a factor of four up to 2030.

This means over 80% of Indian households will be middle-income in 2030 – an increase of 140 million. Another 20 million will be considered high income.

India’s emerging and aspirational middle class is seeking premium food and beverage, healthy lifestyle products, technical infrastructure, quality healthcare and education, entertainment and consumer goods.

Trends in consumer demand are encouraged by a substantial, highly-skilled Indian diaspora in Australia, which is set to number 1.4 million in 2031.

India could be world’s third largest economy as soon as 2030

Two facts demonstrate India’s amazing economic growth:

First, today India is the world’s 6th largest economy.

Second, as soon as 2030, it is likely to be the 3rd largest.

Mugunthan Siva, CEO of India Avenue Investment Management (Sydney and Mumbai) makes a compelling case for India focused, actively managed high conviction funds and the investment themes he likes include technology, manufacturing, construction, rural, real estate, B2B and market share leaders.

You can read more here:

https://www.livewiremarkets.com/wires/why-india-could-be-third-placed-by-2030

India Avenue website:

UK and India pragmatic negotiators achieve a trade and investment deal

INTO INDIA has been advocating for Australia to do what deals can be done with India, and “park” a Free Trade Agreement for later on.

The UK-India Virtual Summit has done just that.

Their newly created Enhanced Trade Partnership (bureaucratic speak for “these are the things we can agree on now) will create immediate opportunities for British businesses in India across industries including food and drink, life sciences and the service sector.

Non-tariff barriers on fruit and medical devices will be lowered, allowing British businesses to export more of their products to India and boosting UK growth and jobs. It also commits both sides to addressing immediate market access barriers as well as continuing to seek further opportunities on the road to an FTA. That is, “parking” the FTA for later on – it is just too hard to achieve.

Prime ministers Narendra Modi and Boris Johnson held their Virtual Summit this week and agreed on a “Comprehensive Strategic Partnership” – the first European country to gain this status.

Australian PM Morrison achieved a CSP with India in 2020 and set out collaboration across science and technology, maritime issues, defence and more.

CSP deals are a sign that India is become more outward looking and – like everyone else – concerned about the behaviour of China.

The trade and investment package unveiled by the British government contains over £533 million of new Indian investment into the UK, covering areas such as healthcare and technology.

British businesses have also secured new export deals with India worth more than £446 million, which is expected to create more than 400 British jobs.

I hope our Australian trade officials are going through all the detail to see if any deals Australia has with India can now be updated on a deal-by-deal basis.

IMF Projects India’s Growth Rate to Jump to Impressive 12.5 Per Cent in 2021

My good friend Mugunthan Siva is the CEO of India Avenue Investment Management – an India and Australia investment company – and he has advised me of great news for the Indian economy and investors.

The International Monetary Fund is now forecasting India to grow GDP at 12.5% in 2021 – the only double digit forecast amongst developed and emerging economies.

Expected global growth of 6% will also play a role in India’s growth given its incrementally increasing role in supply chains, the rise again of the IT outsourcing industry and its strength in pharmaceutical manufacture and export.

In 2022 the IMF forecasts a further 6.9% GDP growth for India – once again the leader of the pack. If India continues to grow like this the US$5tn goal of the Modi’s Government appears within reach in the next 4-5 years.

According to Mugunthan, India’s equity market is evolving nicely given the pivot post COVID. Market breadth has normalised and active managers are dominating the landscape again, as they should in an inefficient equity market like India’s. The next 3 years should see a strong recovery in corporate profit.

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’s “vaccine diplomacy” a template for the region

We have heard about soft power diplomacy and hard diplomacy, but India is showing another way through “vaccine diplomacy”. It could show Australia and other Indo-Pacific Region countries an alternative diplomacy template.

Right now, Australia is too often the first country to call others out, it is known for “hard talking diplomacy” (sometimes at great cost such as the recent trade dispute with China) and Australia is also known predominately as a close ally of the United States of America. These are not positions that find much favour in a rapidly changing region.

How has India created an alternative diplomacy?

First, India accepts global realities, such as the future dominance of China and the USA, so it tries to find the right niche or niches for itself. It has worked hard to develop and promote a reliable reputation in global pharmaceuticals, to the point it is more trusted in this area of production than Russia or China. The UN Secretary General Antonio Guterres has called India’s vaccine manufacturing capacity the “best asset in the world.”

Second, in a distinctively Indian way, India has built generosity into its diplomacy. India has already supplied more than five million vaccines to its neighbouring countries—Bangladesh, Sri Lanka, Nepal, Bhutan and Myanmar—as well as additional quantities to other emerging economies like Brazil. This Vaccine Maitri (Vaccine Friendship) will not be forgotten by the people of those countries.

To put this generosity in context, India is the worst affected by Covid19 in terms of numbers and needs to vaccinate 700 million people at home.

Third, Indian Prime Minister Narendra Modi is a strong advocate of business and of building transparency and trust across business activities. This, in part, has led to the development of a globally competitive pharmaceutical and biotech industry in India. The “vaccine diplomacy” is built on this foundation of strong private industry.

Part of the success of India’s pharmaceutical industry is an almost accidental outcome of long-term price controls in their domestic markets which forced the pharmaceutical sector into world markets, thereby becoming more competitive with higher quality.  

It is one thing to have a strong pharmaceutical sector – it is quite another creative step to use “vaccine diplomacy” as India seeks to define its niche in the modern world.

For countries that struggle with the subtleties required in diplomacy, India has created a template – accept the reality of global power, find your niche and use “out of the square” thinking such as generosity to reinforce that niche.

India and Australia have a trade relationship that can grow

A great source of information about Asia is ASIALINK here in Australia – and for those interested in India their INDIA STARTER PACK is valuable.

Australia’s economic relationship with India has expanded significantly in recent years – particularly exports of minerals and energy, as well as our provision of education services to tens of thousands of Indian students.

We now have the basis to do more. It will take some marketing creativity and a realisation that brand “Australia” goes down well in India.

Two-way goods and services trade between Australia and India totalled AUD 27.4 billion in 2017. Major Australian exports to India included coal (AUD 9.2 billion), education-related travel (AUD 3.4 billion) and vegetables (AUD 1.38 billion). Our main imports from India were refined petroleum (AUD 1.6 billion), medicines (AUD 335 million), pearls and gems (AUD 274 million) railway vehicles (AUD 199 million). 

The total value of Australian goods exports to India for 2017 was AUD 15.7 billion, making it our fifth-largest goods export market. We exported an additional AUD 4.4 billion in services to India, a figure primarily made up of education-related travel services and other personal travel.

Time to review your India market entry strategy? Let’s talk.

India attracting investment during the pandemic and USA is the largest trading partner for a second year

Since March, India has received over $20 billion of new investment from Western companies despite the pandemic.

Thanks to John Bell, Client Relations, Amritt, Inc, Malibu California for this information.

Here are  four examples of significant improvement in bilateral trade between the two countries (India and USA) during the pandemic:

Dozens of large and small organizations depend on Amritt as their trusted advisor to succeed in India, whether selling, sourcing or leveraging talent.

You can Email John Bell at johnb@amritt.com

 

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.

ModiMorrisonSmile2

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.