Water – Into India

What a year! ECTA the radical change in relations between India and Australia

As this year comes to a close, INTO INDIA reflects on the game changer – the Economic Cooperation and Trade Agreement.

It surprised us all. Many did not expect it to be signed. Nobody expected it to be so vast in potential impact.

ECTA will save Australian exporters around $2 billion a year in tariffs, while consumers and business will save around $500 million in tariffs on imports of finished goods, and inputs to our manufacturing sector.

The tariff commitments provided by India in the agreement will open up access for Australia’s exporters of products including critical minerals, pharmaceuticals, cosmetics, lentils, seafood, sheepmeat, horticulture and wine.  

Australian service suppliers will benefit from full or partial access across more than 85 Indian services sectors and subsectors. Australian suppliers across 31 sectors and subsectors will be guaranteed the highest standard of treatment that India grants to any future free trade agreement partner. 

Australian services sectors to benefit include higher education and adult education, as well as business services such as tax, architecture and urban planning.

ECTA will support tourism and workforce needs in regional Australia by making 1000 Work and Holiday Program places available to young adventurous Indians. It maintains opportunities for Indian students graduating in Australia to undertake post-study work, with a bonus year of stay for high-performing STEM graduates.

Really looking forward to 2023!

Reade more here…

Trade deal to kicks off Dec 29th saving Aussie exporters to India $2b a year in tariffs

4 Indian cities rank in top 20 sustainability index for Asia Pacific

Pictured is Bengaluru (Bangalore) among the top Indian cities for sustainability

According to the Asia Pacific Sustainability Index 2021, the top 20 sustainable cities include four Indian cities: Bangalore, Delhi, Hyderabad, and Mumbai.

36 cities were ranked according to the APAC Sustainably Led Cities Index by global real estate firm Knight Frank based on urbanisation pressure, climate risk, carbon emissions, and government activities.

Singapore, Sydney, Wellington, Perth, and Melbourne were the top five green-rated cities in commercial real estate in the Asia-Pacific region.

Some straight talking on climate change and public policy

Patrick Suckling presents the clearest short paper on climate change and what we urgently need to do

Patrick Suckling is a non-resident Senior Fellow of Asia Society Policy Institute and former Australian Ambassador for the Environment – and former Australian High Commissioner to India.

He has written one of the clearest – and briefest – papers on the importance of climate change and how we need to respond.

Highly recommended reading –

https://asiasociety.org/australia/election-policy-brief-climate-change-and-clean-energy?utm_campaign=Australian+Election+Policy+Briefs+-+Defence+and+Climate+Change&utm_medium=email&utm_source=autopilot

Wow! India Australia trade deal much bigger than we thought

These two Ministers are transforming the Australia-India relationship

Wow! The Australia-India Economic Cooperation and Trade Agreement signed yesterday is a whopper.

Get on the plane now if you are in business or education! The trade and investment doors are open for you.

The two trade ministers, Australian Dan Tehan and Indian Piyush Goyal, are transforming the economic relationship and created a platform for decades of growth for India and Australia. Well done.

More good news! Consider Bangladesh – which for many symbolises everything wrong with the world – take another look

Literacy in Bangladesh jumped from 35% to 74%

Bangladesh, home to 160 million people, for many people in the west is a symbol of everything wrong with the unequal world.

But take another look.

It celebrated a ‘development miracle’ in 2021, its 50th year of independence. In the last three decades, GDP per capita has increased seven fold, 24 million people have been lifted out of poverty, life expectancy has risen to 73 years, infant and maternal mortality rates have fallen by a factor of five, the literacy rate has increased from 35% to 74%, and more than 97% of the population now has access to electricity, up from 62% in 2014.

Worth going over that again – it is genuine good news.

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.

How is India travelling? Some developments for investors and exporters

Some developments for investors and exporters

One billion vaccines: The cumulative coronavirus (Covid-19) vaccine doses administered across the country surpassed the 1-billion milestone, today. Over 700 million people have been administered the first dose of Covid-19 vaccine, while 290 million have been fully vaccinated, according to the government’s CoWin website. The government has set a target to vaccinate all adults by the end of 2021.

Moody’s banking rating: Moody’s Investors Service has upgraded the outlook for the Indian banking system to ‘stable’ from ‘negative’. It believes that the deterioration of asset quality since the onset of Covid-19 pandemic has been moderate and an improving operating environment will support asset quality. Moody’s expects asset quality to further improve, leading to decline in credit costs, as economic activity normalises. The rating agency has projected India’s real GDP growth for 2021-22 at 9.3 per cent.

Tax targets overshoot: The Centre is likely to exceed the budgeted tax collection target of Rs.22.2 trillion for the current fiscal year by Rs.2.5 trillion, according to experts. This is driven by better indirect tax mop-up, compliance measures and recovery in most sectors following the second wave of the pandemic. Personal income and corporate tax collections grew by 74 per cent to Rs.5.7 trillion in the first half of the current financial year, mainly due to advance tax and tax deduction at source (TDS) payments.

Power deficit: The power shortage situation in the country is improving as per the data released by the Central Electricity Authority. Power shortage came down to 1,456 MW on 17 October 2021 from 2,714 MW a week back. Peak power shortage stood at a massive 11,626 MW on 7 October 2021. According to power sector experts, demand has moderated due to the onset of autumn and heavy rains in many parts of the country. Moreover, an improvement in coal supplies would further bring down the power deficit.

Data consumption: India has the highest mobile data consumption in the world which is about 11 to 12 GB per user a month. The country is adding as much as 25 million new smartphone users every quarter making it a flourishing ground to launch digital initiatives, Ram Sewak Sharma, chief executive of the National Health Authority of India said. By 2025, India’s data consumption is likely to be doubled to nearly 25 GB per person a month, driven by affordable mobile broadband services and changing video viewing habits, Swedish gear maker Ericsson said.

E-Commerce sales: The share of e-commerce in the overall sales pie has touched new highs in the first fortnight of October 2021, according to market trackers and companies. Several categories, including smartphones, consumer electronics, apparel and daily necessities are growing faster than last year. The share of smartphone sales online surged to around 60 per cent in the first fortnight of Navratri-Dussehra from around 55 per cent, early estimates by market tracker Counterpoint Research showed. Televisions grew to 40 per cent from 31 per cent in the same period last year, while refrigerators, air-conditioners, washing machines and kitchen appliances rose to 9-10 per cent from 6-8 per cent. Market research firm RedSeer Consulting said the overall online shopper base has grown by around 20 per cent this festive season compared to last year, with tier II markets contributing to almost 61 per cent of all shoppers

Foreign investment: India witnessed net foreign investment inflows of USD 8.3 billion in August 2021, as compared to net inflows of USD 649 million in the preceding month. Net inflows of foreign direct investment (FDI) rose to USD 5 billion from nearly USD 3 billion in July 2021. Net inflows of foreign portfolio investment (FPI) worth USD 3.3 billion were seen in August 2021, after witnessing net outflows of USD 1.6 billion in July 2021.

Thanks to ASK Capital Management Pte Ltd for the above information.

Australia: home to 48 of the world’s top 50 most innovative companies

Bosch and Monash University team up on “smart agriculture”

When you think Australia you might call to mind minerals, vast fields of agriculture or cricket.

But there is another reality about Australia – it’s a smart place.

International companies are leveraging Australia’s talent, government support and research to boost productivity, competitiveness and growth – according to data from Austrade and Boston Consulting Group.

Forty-eight out of Boston Consulting Group’s top 50 most innovative companies operate in Australia. These companies have partnered with Australian organisations to research additive manufacturing, renewable hydrogen technology and cloud supercomputing, among other areas.

Advanced manufacturing: General Electric

GE subsidiary GE Additive and the University of Sydney are establishing a high-tech manufacturing hub. The Sydney Manufacturing Hub will advance Australia’s capability in metal additive manufacturing technology.

Agricultural technology: Bosch

Bosch Australia and Monash University are co-developing Australia’s first smart agriculture research facility. The facility will contain a prototypical ‘smart farm’ to test: artificial intelligence; automation; robotic and advanced sensor technology solutions

Energy: Hyundai

Hyundai, Fortescue and CSIRO are working together to develop renewable hydrogen technology. The group seeks to:

develop new hydrogen technologies with the potential for bulk transport
build a renewable hydrogen refuelling facility, to deploy hydrogen fuel cell coaches
build the first combined hydrogen production and refuelling facility in Western Australia.

Healthcare: Johnson & Johnson

The Johnson & Johnson Innovation Partnering Office @ Monash is a hub for researchers and early-stage companies. The facility allows them to develop novel pharmaceutical, medical devices, and consumer healthcare solutions.

Technology: Amazon Web Services and Intel

Amazon Web Services, Intel and AARNET established Australia’s first cloud supercomputing facility. Based at RMIT University, the facility focuses on advanced data processing and computing.

So, from the land of minerals, farming and cricket – there is also an advanced technology reason to team up with the Aussies.

Australian critical minerals, infrastructure, energy, technology, agribusiness, education and space – step up to the table for FTA talks with India

The Australian Trade Minister, The Hon Dan Tehan MP, last week pointed to Indian FTA priority areas such as critical minerals, infrastructure, energy, technology, agribusiness, education and space.

He announced a speeding up of talks with India last week and chose the launch of the Canberra chapter of the Australia India Chamber of Commerce to also announce an update of the India Economic Strategy.

This is a great time for business to step forward. You can have a say. You can be at the FTA discussion table.

The Minister said he had asked former Prime Minister, Tony Abbott, to visit India for meetings around the Comprehensive Economic Cooperation Agreement (which is an FTA).

He announced to the AICC that both countries were hopeful of concluding negotiations this year – a dramatic ramping up of the pace.

The AICC has the Hon. Ted Baillieu AO as its Founding Patron.

India great agritech market but an insider advises “find local partners”

Agritech booming in India but be careful about market entry

A recent story in EVOKE, an agritech site, really caught my eye with a piece of sound advice.

It was so good to read the Managing Partner of Omnivore, Mark Kahn, with his greatest piece of advice to those not already there: do not to move to India immediately. Omnivore is the largest and oldest player in the Indian agritech venture scene

“I’ve never seen a foreign startup succeed in India that was selling directly. Sometimes we have very well-meaning people that relocate their lives here and think they’re going to be able to build an organisation from the ground up and the reality is it’s just very difficult.

“The best thing you could do is get some Indian members on your team, co-create solutions that bridge the gap between whatever you’ve developed earlier and whatever our local farmers actually need and find local partners.

“You should be manufacturing in Australia or maybe India, but you don’t want to build a distribution system yourself and even if you try, you’re not very likely to succeed.”

He pointed to agritech related to water and drought resistance as two high priority opportunity areas.

The agritech opportunities are huge, but INTO INDIA has been advising for a long time that you need partners and a collaborative mindset to really succeed in India.