Real leadership to boost Indonesia and India trade

The leaders of Indonesia and India have shown how to lead on trade – committing to boost bilateral trade to USD 50 billion by 2025, from around USD 18 billion this year. India’s Prime Minister Narendra Modi and Indonesian President Joko Widodo made the announcement during talks this week.

ModiWidodo

The boost follows a defence agreement earlier this month for an Indian port and base on an Indonesian island at the northern tip of Sumatra. The deals are confirmation of India’s active “look east” policy and signal a shift which will impact ASEAN.

This leadership is in contrast to Australia’s relationship with India, with trade stuck on around A$18 billion compared to over A$180 billion with China.

India’s Media & Entertainment growing rapidly – hungry for content and investment

The Indian media and entertainment (M&E) industry grew at an average annual rate of 18.55 per cent from 2011-2017; and is expected to grow at 13.9 per cent to touch US$37.55 billion by 2021.

Entertainment

The next 5 years will see digital technologies increase their influence across the industry leading to a sea change in consumer behaviour across all segments.

The entertainment industry is projected to be more than US$62.2 billion by FY25.

The industry provides employment to 3.5-4 million people.

The entertainment industry continues to be dominated by the television segment, with the segment accounting for 44.24 per cent of revenue share in 2016, which is expected to grow further to 48.18 per cent by 2021.

Google’s video platform, YouTube, plans to increase its user base in India to 400 million, as rising internet penetration in the rural areas will enable consumers to access videos on their smartphones.

I expect personal video messages to be a massive growth area – with Indian creativity being stretched to supply this sector.

India is one of the highest spending and fastest growing advertising markets globally. The country’s expenditure on advertising is expected to grow at 12.1 per cent to US$10.59 billion by the end of 2018.

If you are an investor or content provider, India should be on your radar.

Put Indore and MP on your India trade mission list

Indore is the largest city in the Indian state of Madhya Pradesh and for the second year in a row has won the Swachh Survekshan Survey as India’s cleanest city.Indore 3

Indore is the financial capital of MP, is an education and mineral resources hub and the state has a major agribusiness economy. In addition, India’s IT giants such as Infosys and TCS are setting up major centres there – Infosys is locating an IT development centre in Indore which will employ about 13,000 and TCS is building a campus there.Indore 4

The State of Madhya Pradesh has 75 million people.

Indore holds a highly successful “Global Investors Summit” each year.Indore 2

Definitely another one of India’s “tier 2” cities worth putting on your trade and investment mission list.

The collision of transaction culture with relationship culture shows how NOT to succeed in India

It is a frustrating pattern. The eager business team arrives in India on their first trade mission, they race from meeting to meeting and sign lots of MOU’s (Memorandum of Understanding) and appoint agents. The three day trip has been a roaring success!

Then, nothing happens.

What is going on here? The collision of “transaction” culture (the west) and “relationship” culture (India) has taken place yet again, with predictable outcomes.

From the Indian side, a high sense of courtesy and a culture that cannot say “no” means the visitor feels great progress is being achieved – while the Indian is also positive, feeling that a valued relationship might develop. Classic misunderstanding.

What is the alternative? Take a long view of India – at least three years – and wait for genuine relationships to develop. Go to India many times, not just once or twice. Put quick transactions aside and build trust. Learn how to relate to a culture that thinks differently.

Given that around 600 million Indians are under the age of 25, the future is bright and you should be there. Just go about it the right way next time.

Frontier Advisors puts India ahead of China for investors

China has led for decades – but now investment advisors are putting India ahead. The latest is from Frontier Advisors as reported by Investment Strategy.

In summary, India is a long-term investment – a 10-year-plus horizon – with favourable demographics, population growth and an emerging middle class.

Here is how they saw both markets and why they favour India:

indiagateThe report says about China:

  • economic growth is likely to continue to slow as credit growth and investments, such as in infrastructure and property, fades
  • reforms in excess capacity sectors and deleveraging is occurring as authorities switch focus to “quality” of economic growth rather than the pace of growth
  • monetary policy is tightening despite an unchanged benchmark interest rate
  • environmental issues are being addressed, and
  • economic transition is taking place as the Government focuses on higher value sectors.

It says there is a risk that China deleverages too quickly and destabilizes the economy, “but a hard landing still seems unlikely”.

Meanwhile the new US restrictive trade policies heighten uncertainty.cropped-investingindia3.jpg

On India, the report says:

  • India is a long-term investment – a 10-year-plus horizon – with favourable demographics, population growth and an emerging middle class
  • Its economic growth path will likely be different from China’s: while social inequality is a problem, education is seen as crucial to alleviating this; demographics suggest it has multi-decades to “harvest” a return from this, while China’s was shorter because of the one-child policy
  • valuations in listed equities are not cheap, “but they seldom are”
  • Government bond yields look attractive, although higher inflation is a risk, and
  • there are opportunities in real assets, such as the “National Corridor Project”. But its history has been poor and there is a reduced capacity for liquidity

https://www.investindia.gov.in/

 

The way India thinks about time

How do we perceive time? And what does this mean for my appointments or travel schedule? In the west we see time as sequential, a straight line, whereas in India your host sees time as synchronic, they see the past, present and future as interrelated.

In a nutshell, this approach to time explains why westerners are always rushing about, completing one meeting and rushing on to the next, while your Indian host seems relaxed, not in a rush, dealing with many other things while meeting with you and so on.

Sequential cultures include the UK, USA, Canada and Australia. Synchronic is definitely India and probably all Asia.

Anyone who has been at an Indian business function will see this working out – while announcements and speeches are being made, people move in and out of the room, mobile phones ring and are answered (even by presenters), private discussions take place and the scene is a moveable feast. But the western equivalent will ask for mobiles to be switched off, will collectively frown when they ring, will sit and not move – paying attention to the single topic at hand.

On returning home from one of my early trips to India, for the first month or two I told everyone about one of the “disaster” meetings I had in India – while I was presenting my proposal, my Indian colleague was constantly interrupted, taking calls, signing letters, giving instructions and so on. At any time there seemed to be four or five people in his office, all actively doing things and distracting him – or so I thought. But two months down the track I discovered that he had been paying attention, knew what I proposed and even more, wanted to go ahead. Disaster to triumph without even knowing it!

Time – just one of several major areas of cultural difference that we face when engaging with wonderful INDIA.

Put “Invest India” on your radar

Looking for the how and why of investing in modern India? The government has created Invest India and their website should be something you visit regularly. It is the best window into a massive pipeline of investment opportunities.

The Invest India site highlights the economic growth story, the young population, rising domestic demand, business friendly governments and rapid infrastructure improvements as just some of the reasons to invest in India.

Is it time to review your India investment and engagement strategies? If not now, when?

http://www.investindia.gov.in/why-india

5 ways to build business with India in 2021

While Australia sees the “Asian Century” as a huge opportunity, our biggest opportunities are with the rapidly growing economy of India.

Certainly the two Prime Ministers are working hard to build close connections – India’s Narendra Modi and Australia’s Scott Morrison are building a close relationship. Business, trade and education should follow their lead.

Here are 5 steps we should take to grow our trade ties with India in 2021.

Adopt a patient long term view: It is very easy to get MOU’s (Memorandum of Understanding) signed with fanfare in India but too many do not produce any outcome. One way to improve our cultural dexterity would be to take a long term view and apply lots of patience. Businesses should not start out on market entry unless they are prepared to commit at least five years to making it work. Governments need the same longer term perspective. Rushed trade missions, political announcements and photo opportunities amount to very little – we see them as an achievement, but in reality they are just a beginning. Our business executives and even many diplomats do not build patience into their strategies.

Focus on relationships: India is not a short term transaction opportunity – to succeed there needs a longer term focus on building relationships. The first trade meeting in India can be exciting and positive, but from the India side this is just seen as an introduction and they will wait to see if the relationship grows. Even our companies and governments take too short a view when sending people to India – a two or three year stint there is just not enough. Trust and relationship take time. Others prefer to manage the India relationship from offices in Singapore or elsewhere – this is seen by the India side as evidence you are not committed to India.

See beyond the politeness: Indians are among the most courteous and generous hosts on the planet. On top of this, their culture demands that they never provide an outright rejection or “no” statement, even when for us it would be easy to just say “no”. To succeed, our businesses and governments need to dig deeper and fine the reality beyond the politeness.  The dumbest question for a business to ask in India is “can you help me with market entry for my products?” The answer will always be “yes” and you will sit idle for a long time back home until you realise this is not the right question.

Adapt to indirect communications: Like most of Asia, Indians are indirect communicators. Problems are rarely addressed directly and unless you have an ear for indirectness, you will miss the warning signs. In addition, indirect communication creates misunderstanding because the Indian side will always have to agree with whatever you may be asking. Our normally blunt Aussie style is misunderstood over there and can give offence – but you will never be told. This is a two way process – understanding they are indirect, and adopting an indirect style if we can.

Realise that language and thinking are different: One of the big problems in our relations with India is what makes it seem easy – Indians speak English. As a result, whereas our businesses and government when dealing with China, Japan or any other non-English speaking nation will have interpreters and consultants, in India the use of English creates the illusion that communication is taking place. Yet when we deal with other English speaking nations, we factor in their thinking as well – we know Americans speak English but think differently from Aussies. Our biggest mistake is assuming that Indians think like we do.

These barriers really combine two things – the importance of long term commitment to India (minimum 5 years) and cultural differences. If you think long term and study how to adapt to cultural differences, India could become your next big market. 

Marvellous Mumbai is on the move!

Modern India moves fast. Mumbai is probably the fastest city. For example – Maharashtra Chief Minister Devendra Fadnavis has said the city will see a transformation in terms of mobility with projects ranging from underground metro and sea bridge to coastal roads, elevated suburban trains and new airports.These include 258 km of metro network in Mumbai and suburban areas, which would be one of the biggest in the country. About 50 km of elevated suburban railway network is being set up.They are also making coastal roads. a new sea link, a sea bridge from Mumbai to New Mumbai, an airport in New Mumbai, an underground metro and – all complete by 2022.

Here’s how modern India is different – in the past such a promise from a Chief Minister would be laughed at by the locals as “never going to happen”. Now, it is happening.

http://www.ptinews.com/news/9440133__Mumbai-to-transform-on-mobility-by-2022–new-Fintech-policy-on$storyes

The “split personality” of western investors when it comes to India

Investors in the west have split personalities when it comes to India – yes, they see India opportunities as incredible, but, no, they choose not to invest there. This is all about to change – my post gives 8 reasons for the change.

https://www.linkedin.com/pulse/eight-reasons-india-global-investors-radar-stephen-manallack/?published=t