India’s Foremost Trade & Investment Magazine

INDIA GL BAL BUSINESS Yearend UK Edition 2019 The year of assertion

12 62 10

THE BIG INTERVIEW EXPERT VIEW DESPATCH BOX Reducing emissions makes Rolling out an innovative The UK’s relationship with India good business sense recycling landscape will continue to flourish Bob Patel, CEO, Neeraj Kanwar, Lord Karan Bilimoria, Vice-President, LyondellBasell MD, Apollo Tyres CBI; Founder & Chairman, Cobra Beer

December 2019 www.indiaincgroup.com

EDITORIAL

The year 2019 marked a decisive shift in the UK’s three-and-a- half-year-long arduous journey to leave the European Union (EU) 2019: The year with a victory for Johnson’s “Get Brexit Done” mantra. As the 31 January 2020 Brexit deadline nears, the prospect of a step-change of assertion in the UK-India relationship to a truly strategic partnership is also taking shape. That the hard he year 2019 was marked Left agenda of Labour’s Jeremy by powerful nations Corbyn was rejected at the ballot asserting their national box would have come as a sigh Tidentities and redefining their of relief in India. nationhood. Untethered from the EU’s In India, following the re- freedom of movement rules, election of Narendra Modi a new Australian-style system as Prime Minister in May, his is being pegged as a fairer government quickly set the alternative for India’s skilled agenda, integrating Jammu & professionals. The ease of Kashmir with the rest of India movement of people will by defanging a “temporary” inevitably be at the heart of any provision of the Indian new trade arrangement and the Constitution that had somehow signs at the close of the year survived for seven decades. look promising. He then amended the law on citizenship to provide fast track With Modi’s invitation for relief to persecuted minorities Johnson to visit India being in neighbouring countries. formally extended during the Asserting India’s economic obligatory congratulatory phone sovereignty, the government then pulled out of the Regional call, the year 2020 could well Comprehensive Economic Partnership as it could have flooded the turn out to be a defining one for the bilateral relationship. Trade Indian market with cheap Chinese goods. And finally, he continued between the two countries stands at just over £20.5 billion per year, with the economic clean-up initiated in his first term in office. which reflects the immense potential that remains untapped. Watch this space! In the UK, Boris Johnson, who replaced Theresa May as Prime Minister in July, felt hamstrung by a party and a Parliament that didn’t seem to have a clear-cut solution to Brexit. Determined to break the status quo, Johnson took a risk by calling a snap election COP25 disappoints – and was rewarded with a thumping majority. It now looks pretty certain that he will lead Britain out of the EU within a few months, like others before it throwing up both challenges and opportunities for Indian business which is heavily invested in the UK. he goal of climate change science is fairly commonly known. Unless we limit and reverse global warming, billions of living Meanwhile, US President Donald Trump continued to assert along coasts and in several islands around the world will see the US’s right to take unilateral action to right several perceived Ttheir worlds washed away by angry tides. Scientists say achieving historical wrongs, even if meant dragging an ill-prepared world into the long-term temperature goal requires global greenhouse gas an all-out trade war and pulling the US out of its self-appointed role emissions to peak by 2020 and subsequently fall to zero before the as the world’s policeman. end of the century. To limit warming to 1.5°C, this reduction to zero must take place around 2050. That is a daunting task and matters And Xi Jinping’s China continued its unilateral strategic and are not helped by the irresponsible actions of climate sceptics such diplomatic expansion in the Asian and African regions. as US President Donald Trump.

Even as these and other nations find their places in the world, The recently concluded COP25 conference in Madrid, unfortunately, multilateralism is being tested to the limit. A new consensus failed to deliver on its mandate – to negotiate and finalise rules for must emerge. the carbon market and other forms of international cooperation. But negotiating through thickets of politically contentious issues relating to the carbon market and the emissions cuts proved too much for the delegates. In the end, the objections raised by the US, Russia, A promising New Year China, Brazil, India and Saudi Arabia – not all of them for the same or similar reasons – meant that these decisions have now been for UK-India relations pushed to the next climate conference in Glasgow.

s the year of two major elections – one in India in May and a In the absence of any significant breakthrough at COP25, the high snap poll in the UK in December –comes to a close, the vote point of the conference was the passionate speech by teenage is quite definitively in favour of stronger UK-India ties in the climate activist Greta Thunberg. The wide media coverage she ANew Year. received globally had one positive effect – it has made many more people aware of the looming crisis. Prime Minister Boris Johnson, who was voted into power with a “stonking” mandate, has made repeated references to his Hopefully, the politicians will manage to get their act together commitment to strike a new post-Brexit trade deal with India and by the time they meet again in Glasgow in November next year. partner with the Indian Prime Minister, whom he fondly refers to as Meanwhile, the India-sponsored International Solar Alliance, has Narendrabhai, on his mission to build a new India. thankfully gained traction, with more than 121 member-countries at last count. www.indiaincgroup.com December 2019 3 CONTENTS The Yearend Edition of 'India Global Business' does a deep dive into the highlights, major milestones and biggest newsmakers of 2019, including a Brexit roundup for the year. A range of expert columns and interviews, staying with the broad theme of a look-back at the year that was, make up the rest of the package. Happy reading and a very Happy New Year from the team at India Inc. DESPATCH BOX EDITORIAL 3 2019: The year 10 The UK’s relationship of assertion with India will continue to flourish Lord Karan Bilimoria, Vice- President, Confederation of British Industry (CBI); Founder and Chairman, Cobra Beer

THE BIG INTERVIEW

12 Reducing emissions makes good business sense Bob Patel, CEO, LyondellBasell

GLOBALLY SPEAKING THE BIG STORY 15 My reflections on 2019: The glass is not always half empty Manoj Ladwa, Founder and CEO, India Inc.

TECH SPEAK

18 TechSagar – Showcasing India’s technology and cyber preparedness Rama Vedashree, CEO, Data Security 7 Year of drama and assertion Council of India by India Inc. Staff

4 December 2019 EYE ON BREXIT THE SMALL PRINT 20 The long road to Brexit takes a decisive 64 The year that was – Start-up Report Card 2019 turn in 2019 Dr Param Shah, Director - UK, FICCI by India Inc. Staff BIRD’S EYE VIEW GUEST COLUMN 66 India-UK counter-terrorism 23 Competing with robots: cooperation: Convergences and How online learning can help challenges professionals win in the future Rahul Roy-Chaudhury, Senior Zairus Master, CEO, Shine.com Fellow for South Asia, IISS

69 REGION FOCUS: Sunrise in the East 26 INSIGHT: A year of elections that ended with by India Inc. Staff a vote for stronger India-UK ties by India Inc. Staff SOCIAL IMPACT 29 THE BIG PICTURE 71 Tackling the safe drinking water crisis The South Asia cooperation Poonam Sewak, Vice President, Knowledge and conundrum Partnerships, Safe Water Network India Dr Gareth Price, Senior Research Fellow, Asia Programme, Chatham 73 POLICY FOCUS House The approach to foreign trade policy needs to change by India Inc. Staff COUNTRY FOCUS SPECIAL REPORT 80 A good year for Indian wine by India Inc. Staff 82 LAST WORD: Unfair to criticise Modi govt...

Published by Incorporating 32 India is living up to its potential as an emerging superpower by India Inc. Staff

ANALYSIS 34 Newsmakers 2019 – Influencers on the world stage by India Inc. Staff www.indiaincgroup.com 39 NEWS IN IMAGES: 2019 – A snapshot © India Inc. Limited, all rights reserved. by India Inc. Staff Reproduction in whole or in part without our written permission is prohibited. Views expressed 46 WHAT'S UP/WHAT'S DOWN by our contributors are their own and do not India and the world in 2019 necessarily represent the views, policies of India by India Inc. Staff Inc. While every effort is made to achieve total 50 REWIND 2019: Highlights from the past year accuracy India Inc. cannot be held responsible for any errors or omissions. EXPERT VIEW Editorial [email protected] 62 Rolling out an innovative Advertising & Sponsorship PRICE £4.95 recycling landscape [email protected] PUBLISHED IN LONDON Neeraj Kanwar, MD, Apollo Tyres

www.indiaincgroup.com December 2019 5 6 December 2019 THE BIG STORY

Year of drama and assertion by Arnab Mitra

2019 was a year of near non-stop drama, fast-moving action and events with far-reaching consequences. It was also a year in which powerful nations and their leaders asserted their right of action in different ways and in doing so, majorly disrupted the ‘business as usual’ status quo that the world has gotten used to. We look at some of the biggest developments of 2019 in this analysis.

rade war habits and their lives. By the end of the world watched with bated breath The year’s biggest economic the year, though, it looked like the as two nuclear-armed nations walked news was undoubtedly the two sides could be heading towards to the brink of war and then walked Tongoing trade war between the US a truce, though that is by no means back. On 14 February, a terrorist and China, the world’s two largest certain. But regardless of the way it rammed an explosive-laden car economies, which began in 2018 ends, this trade war and the resultant into a convoy ferrying paramilitary and has raged right through 2019. In raising of protectionist walls in various personnel in Pulwama district of J&K. India, a large part of the coverage countries have shattered the post- Result: about 44 people lost their was centred upon the moves by the Second World War consensus that lives. Jaish-e-Mohammed, a Pakistan- Narendra Modi government to lay unfettered trade between nations based terrorist group, backed and out the red carpet for companies is the only way to prosperity. It has trained by the Pakistani Army, claimed looking for alternatives to China. As also given countries such as India, responsibility for the attack, perhaps each announcement of tariff hike Vietnam, Indonesia, the Philippines emboldened by the lack of any by US President Donald Trump and and Bangladesh a second chance Indian retaliation at previous such each act of retaliatory duty increase to try and emerge as manufacturing provocations. by the Chinese government set bases for Western companies looking off stock market upheavals around for alternatives to China. Conventional wisdom on both sides the world, anxious investors pored of the border had it that Pakistan’s through headlines and the fine print The Pulwama attack and the nuclear umbrella had effectively to make sense of how these distant Balakot revenge precluded any retaliatory Indian events were impacting their saving For a fortnight in February this year, military action. This doctrine was www.indiaincgroup.com December 2019 7 THE BIG STORY believed to be disenchanted with Jeremy Corbyn’s Labour Party and its rigid, misinformed and ideologically blinkered stand on India and the Johnson government’s possible outreach to it.

Slowdown spreads in India The India Growth Story, which for years, shored up falling global growth rates, seems to have run out of steam. On 24 December, the International Monetary Fund (IMF) announced that India was amid a significant economic slowdown and urged the government to respond with policy actions to counter the same. “Growth in the second quarter of 2019-20 came in at a six-year low of 4.5 per cent (y/y), and the composition of growth indicates that private domestic demand expanded by only 1 per cent in the quarter. Most rewritten on 26 February when After facing yet another setback to high-frequency indicators suggest that a dozen Indian Mirage 2000 jets his plans of taking Britain out of the weak economic activity has continued entered Pakistani airspace and European Union with or without a into December,” the IMF said. bombed a terrorist training camp in Brexit deal, Prime Minister Boris Balakot. Johnson called a high-risk snap There are several reasons for this election that was almost a referendum slowdown but the most significant is This mission was a landmark not only on his resolve to get the job done. The the crisis in India’s banking sector, because it was the first time since results were overwhelmingly in favour which is saddled with billions of the 1971 war that Indian military jets of Johnson and his Conservative dollars of unpaid debts and the entered Pakistan but also because burgeoning crisis in India’s non- it destroyed forever the myth that banking finance company (NBFC) Pakistan could carry on waging an sector, which is mainly responsible for undeclared war against India via its THERE ARE SEVERAL transmitting loans to the real estate, terrorist assets without any fear of a REASONS FOR THIS small business and unorganised counter-offensive. SLOWDOWN BUT THE sectors. Falling consumption demand MOST SIGNIFICANT IS THE in the economy is another major Modi’s re-election CRISIS IN INDIA’S BANKING factor for the slowdown. By noon on 25 May, the Indian SECTOR. election was as dead as a dodo. It Corporate tax cuts provide was evident by then that the people a stimulus of India had reposed their faith once Investors have long complained about again in Narendra Modi and had re- Party. In addition to giving him an India’s relatively high tax rates. In elected him, his party, the BJP, and absolute majority, which the Tories response to the economic slowdown, his coalition, the National Democratic had fallen short of in the 2017 Indian Finance Minister Nirmala Alliance (NDA), by an overwhelming election, the election effectively Sitharaman, on 21 September, cut – almost two-third – majority. The final defanged rival power centres and the corporate tax rate from 34 per tally and the margins would be known cemented the Prime Minister’s power cent to 25.17 per cent inclusive of only later that evening, but there was in his party. Johnson’s re-election has surcharge and cess. In her Budget on no doubting the finality of the verdict. brightened the probability of a limited 5 July, Sitharaman had reduced the trade deal between the UK and tax for companies with a turnover of It was the first time in almost five India as Britain tries to forge closer up to $55 million. Now, the rate has decades that a government with a financial and business links with the become universal for all companies single party majority was being voted world’s leading trading nations to that do not take the benefits of any back to power – again with a single compensate for any losses arising out other exemptions. Such companies party majority. of Brexit. Equally interesting to watch will also not have to pay any Minimum will be the role of the 1.5 million strong Alternate Tax (MAT). Now, the peak Boris Johnson’s re-election Indian diaspora in Britain, which is rate of corporate tax is comparable

8 December 2019 THE BIG STORY

THIS TRADE WAR AND THE RESULTANT RAISING OF PROTECTIONIST WALLS IN VARIOUS COUNTRIES HAVE SHATTERED THE POST-SECOND WORLD WAR CONSENSUS THAT UNFETTERED TRADE BETWEEN NATIONS IS THE ONLY WAY TO PROSPERITY.

reduce them to the status of second- class citizens.

Nothing could be further from the truth. The CAA is simply a law to regularise the status of persecuted minorities from Afghanistan, Pakistan and Bangladesh who have taken refuge in India. There is no provision in it to strip anyone of citizenship.

But opponents of CAA obviously don’t want to let facts get in the way of a good story.

Modi govt decides to get out to the lowest rates charged by any received support from a large section of business country. of India’s opposition ranks. The Narendra Modi government kicked off its privatisation programme Further, in a bid to boost the Make Newspaper articles and television and green-flagged the strategic in India programme, attract foreign channels covered this in detail, sale of the country’s second-largest investment in the manufacturing giving equal space to scenes of wild downstream oil company Bharat sector and make India competitive celebrations across the country. Even Petroleum Corporation Ltd (BPCL), compared to China and the ASEAN foreign countries such as the US, the India’s largest shipping company, countries, the government has UK, the EU, the UAE, Saudi Arabia Shipping Corporation of India, India’s allowed any new domestic company and other major powers that took note largest operator of container depots incorporated on or after 1 October of the development did not express and warehouses and terminals, 2019 and making investments in any reservations about what they saw Container Corporation of India manufacturing to pay income tax at as India’s internal matter. (Concor), and two relatively small 17.01 per cent inclusive of cess and public sector units in the energy surcharge. These companies may Only a section of the Western media sector – Tehri Hydro Development not avail any other exemptions or and some political parties such as Corporation (THDC), and North incentives and must start production Britain’s Labour Party adopted a Eastern Electric Power Corporation on or before 31 March 2023. strong anti-India stand on the issue Ltd (NEEPCO). It expects to complete and gave wide play to anti-India the privatisation process by the end This move is expected to kick start voices on Kashmir. of the current financial year ending the sputtering investment cycle that 31 March 2020. Strategic sale means has been stubbornly refusing to Citizenship Amendment Act the sale of a controlling interest in a pick itself up for the last few years. The Citizenship Amendment Act company, i.e., a transaction where These tax cuts will lead to a revenue (CAA) has received the most biased management control of a company loss of more than $20 billion for the coverage possible in both the Indian passes to the buyer(s) along with its government and, therefore, provide a and the Western media. Most of shares. The sale is expected to net stimulus of an equal amount for the this coverage has been uninformed, the government $15 billion, which Indian corporate sector. some of it has been irredeemably is critical for it to meet its budgetary motivated and politically slanted. targets especially after cutting Article 370 goes The introduction and passage of this corporate taxes earlier this year, On 5 August, the Narendra Modi law through both Houses of Indian which meant foregoing $20 billion in government revoked provisions Parliament have been dubbed the revenues. Along with the proposed of a contentious clause in India’s disenfranchisement of Muslims in sale of national carrier Air India, this Constitution that granted special India. Many otherwise well respected will mark the largest privatisation status to Jammu & Kashmir. The Indian and Western commentators exercise initiated by the government move was widely welcomed by all have called it a conspiracy to strip of India in the last decade and a half. sections of Indian society. It also Indian Muslims of the citizenship and www.indiaincgroup.com December 2019 9 DESPATCH BOX The UK’s relationship with India will continue to flourish by Lord Karan Bilimoria

A British Indian entrepreneur takes stock of the changes in UK’s economy over 2019 and what this means for its relationship with India.

019 – what a year! Prime The good news is that the two-year Minister Narendra Modi gets post-graduate work visa, which I re-elected with an enhanced Highlights helped to spearhead in parliament 2majority. Brexit remains unresolved in 2007-8 only to have it removed in and although India continues to grow • The UK has always been 2012 by Prime Minister Teressa May at a pace enviable to any western the gateway to Europe for while she was Home Secretary, has country, its growth rate has Indian companies, but the been reinstated by Prime Minister uncertainty surrounding slowed down. Boris Johnson and Home Secretary Brexit has significantly Priti Patel. This will be excellent news affected trade. The UK, with all the continuing for Indian students, giving them the uncertainty regarding Brexit, opportunity to earn some extra money • The revival of the two-year continued to grow as an economy, to pay for their education, gain work post-graduate work visa albeit at a very low rate. The threat experience and continue to build will encourage more Indian of a no deal Brexit has been looming students to study in the UK. generation-long links with Britain large thought the year and parliament and be life-long ambassadors for the has been at a gridlock. The UK has UK. Furthermore, the living bridge of • With PM Boris Johnson in always been the gateway to Europe office, there is a chance that the 1.5 million Indians in the UK are for India and its companies and UK-India relations will go to continuing to flourish and go from Indian companies continue to invest higher levels than ever before. strength to strength in every field. in the UK and play a major presence. Today there are three Indians at the The 842 Indian companies in the UK Cabinet table including one holding had a combined annual turnover of which and been negotiated for over a one of the great offices of £48 billion, employed over 100,000 decade, is nowhere near completion State, Home Secretary. citizens and, in 2019, paid £684 and there is talk of a post Brexit million in corporation tax. That said, UK-India free trade agreement – in This has been a very special year for some of the largest high-profile Indian theory, a possibility; in reality, it will me as Chancellor of the University investments from companies such as be extremely difficult to implement not of Birmingham. I am the first Indian Tata Steel and Jaguar Land Rover least because of the born Chancellor of a Russell group have been facing severe challenges. immigration issues. university in Great Britain. The The India-EU free trade agreement, University of Birmingham has just

10 December 2019 DESPATCH BOX

been awarded the Guru Nanak Chair, business including in attracting I also hope the government will sponsored by the Indian government inward investment where Britain has now reduce the visa fees for Indian in the 550th birth anniversary year of traditionally always been one of the visitors, be they tourists or business Guru Nanak Dev Ji. This, being the largest attractors of inward investment visitors, in line with the rates for 150th birth anniversary of Mahatma in the world. Chinese visitors which are four times Gandhi, has also been a year of less than those for Indians. celebration between our two great countries. I have always said that the THE UK HAS A SPECIAL I know personally, having worked UK has a special relationship with RELATIONSHIP WITH TWO with Boris Johnson as a member of two countries more than others in the COUNTRIES MORE THAN his Promote London Council while world – the US and India. OTHERS IN THE WORLD – he was Mayor of London, how much he genuinely loves India. I have These are extremely uncertain THE US AND INDIA. suggested that one of the first things times globally in so many aspects he should do in the new decade, – Mahatma Gandhi said “Strength 2020, as Prime Minister is to lead a does not come from winning. Your There will now be the opportunity to large business delegation to India, struggles develop your strengths. resolve Brexit and bring long-needed which I will do everything I can to When you go through hardships and stability and the end of uncertainty. support as Vice President of the CBI do not surrender, that is strength”. and Founding Chairman of the UK- Most importantly, looking ahead, I also think that the Boris Johnson India Business Council. with Britain and India, we need to government will no longer have the continually learn from each other hostile immigration policy that existed I think UK-India relations are going and flourish together – once again under his predecessor, which they to flourish and go to even higher as Mahatma Gandhi said, “live as have already demonstrated, as I have levels than ever before. Reinforcing, if you’re going to die tomorrow and said above by bringing back the two- as I have always said, that India, learn as if you are going to live year post-graduation work visa for along with the USA, is one of the forever”. The UK and India’s strong international students. This will be two countries in the world with which and resilient relationship will live on a particular benefit to students Britain has a special relationship. and flourish forever. from India.

I congratulate Boris Johnson and the The government has also removed Conservative party on their Majority. the net migration target and will Lord Karan Bilimoria is Vice- hopefully bring in immigration policies President of the Confederation After over three years of gridlock, that will allow skilled workers from of British Industry (CBI) and the Prime Minister now has a clear India, be they IT workers or chefs, to the Founder and Chairman of mandate to govern. I think this will be allowed to come and work in Cobra Beer. be extremely good news for British the UK. www.indiaincgroup.com December 2019 11 THE BIG INTERVIEW

Reducing emissions makes good business sense Bob Patel is the CEO of energy and chemical major LyondellBassell. In this interview with ‘India Global Business’, he tackles some of the tough questions around the war on plastic waste and the company’s commitment to a greener future.

12 December 2019 THE BIG INTERVIEW s shale gas a reliable prospect of goods that come from part of our strategy going forward, but for the world economy? petrochemicals, eventually plastics. it has to make economic sense as We think that India is a very important well. I think both are possible together. IThe US has abundant resources in end market for us and we continue to terms of natural gas, shale gas. The focus on reaching that market through Is the war on plastics a winnable reserves are enormous, and the cost local production, like polypropylene proposition? of production is quite low. The US is compounds, and also build on becoming much more of an export exports from the US and Europe of Yes, absolutely. First of all, the war on centre for LNG, which comes from polyethylene grades – raw material plastics is actually a war on plastic shale gas. As far as environmental which enables everyday life and waste. We have to separate the two. impact is concerned, natural gas is a the development of food packaging, Without plastic, we can't undertake much cleaner fuel compared to coal. pipes. In a market like India, people everyday life. The challenge is really It is clean-burning and it holds good don't buy in bulk because they don't about what we do with the waste. The prospects in terms of its longevity and have enough storage space. And waste must be collected close to the low environmental impact. Even the generally, they can't afford to buy source. And it cannot be released exploration process for natural gas four-six weeks’ worth of supply at a into the environment. People litter is becoming much more time. They buy as they need. Plastic plastic packaging and it ends up in environmentally friendly. enables the packaging of food and the sewage system which eventually other goods in smaller quantities so ends up in rivers and into the ocean. What is the role being played by that they can purchase and consume Our company, in addition to a few LyondellBasell’s India units and on a daily or weekly basis. other large chemical companies, has how do you see the country’s started the Alliance to End Plastic manufacturing base progressing Waste. Essentially, the idea is to in future? be a cross value chain alliance. We not only have chemical companies We strongly believe in the growth like ourselves but also packaging prospects of the Indian economy. manufacturing companies, consumer The growth of the middle class will companies like Procter & Gamble continue, and they will consume both and waste handling companies who durable goods and plastics through help the waste from leaking into the packaging. The growth rate will be environment. We want to develop quite significant going forward. We sustainable products and packaging think that the middle class is driving that is easier to recycle. We engage 75 per cent of the consumer spending the entire value chain to address the by 2030 in India. As a company, lifecycle of plastic. The Alliance has we want to participate in this. We four strategic pillars: have polypropylene compounding manufacturing in India, mainly in the 1) Infrastructure – This aims automotive market. So, as plastics to collect plastic waste. are replacing steel and other heavier 2) Innovation – This is intended to materials in automobiles, our aim is spur innovation and convert the to participate in the lightweighting of waste into a usable product. We vehicles. This provides the benefits Are the Paris climate change are providing catalytic capital for of fuel efficiency. We're producing targets realistic from an industry research on subjects like making polypropylene compounds that enable perspective? plastics that are more recyclable. this. Also, our company produces 3) Education – It is the education polyethylene pipes which are used for These targets are being evaluated. of governments, municipalities, carrying sewage. These are also used But as a company, we think that consumers on how to responsibly in clean water systems. Between looking after the climate and reducing dispose of waste once it the use of plastics in vehicles and emissions makes good business is created. infrastructure, we can significantly sense. What we are trying to do is 4) Clean up – We dedicate some participate in the Indian market try to prove our operational reliability resources from the Alliance going forward. and reduce the amount of energy to clean up the waste in the required to produce the chemicals or environment. Where do emerging economies plastics. We are using cleaner-burning like India fit in within the future boilers and furnaces in our plants. One example is the project we of petrochemicals? We try to recover heat that otherwise have undertaken which involves the may go into the environment and use clean-up of the Ganga in Varanasi The growth of the middle class is it to heat something else. Reducing in partnership with Renewology. going to drive a lot of consumption carbon footprint will be an important It's undertaking the separation and www.indiaincgroup.com December 2019 13 THE BIG INTERVIEW

BETWEEN THE USE OF PLASTICS IN VEHICLES AND INFRASTRUCTURE, WE CAN SIGNIFICANTLY PARTICIPATE IN THE INDIAN MARKET GOING FORWARD.

waste collecting company, to recycle polyethylene and polypropylene. They segregate waste like plastic packaging, shampoo bottles and then we wash it, grind the waste and create new raw material that can be used in consumer packaging. Unilever is one of our biggest customers for that. Recently, we also got into a partnership with Samsonite to create bags made from recycled waste.

We are working on several things to promote circularity. We are doing research on molecular recycling – converting the waste into feedstock that can be used to make new plastics. We are also using bio- based material like cooking oil to make plastic. In a project in the Netherlands, we are converting wastewater into steam to reduce CO2 emissions. It is equivalent of taking off emissions from over 30,000 vehicles on the road in the Netherlands every year.

What, in your view, is an ideal mix for countries to balance their energy needs with environmental concerns?

I think using clean sources of energy is very important. And most of them are all around the world. So, global trade will be important. LNG, or even propylene, that is being exported from the US is being used for cooking in places like India, Thailand and even parts of China. There will have to be trade of energy that has a conversion of waste into fuel. The Plastics actually do so much in terms lower environmental impact. LNG is idea is that we would employ mostly of reducing environmental impacts of something that will come from the US impoverished women around the area everyday life are a very sustainable or the Middle East and be shipped to to collect waste which can then be material. The entire value chain is places around the world. It has to be converted to fuel that can be used working on how to solve the challenge a global game. in winters there. Being an Indian, of plastic waste and how to recover I am proud of that project and the the waste and convert it into new Same thing with plastics. Global trade significance of the river and the social sustainable products. will be important. The cost to produce good the project will do. plastics is lower in regions that have Can you tell us about some of an abundance of shale gas like the So, my answer is that yes, the war the initiatives undertaken by US or cheap natural gas like in the on plastic waste is winnable. People LyondellBasell to help this? Middle East. These can be exported must realise that waste has value. to the rest of the world. If we can collect it, we can reuse it. In the Netherlands, we have entered into a joint venture with SUEZ, a

14 December 2019 GLOBALLY SPEAKING My reflections on 2019: The glass is not always half empty by Manoj Ladwa

In the pursuit of so- called ‘balance’, 2019 has seen far too many commentators straying towards the negative as their safest bet when explaining India’s growth story. The glass is not always half empty, argues India Inc. Founder & CEO, Manoj Ladwa

ver the past five years, I have (however imperfect it may be), the was in 2010 that the idea of starting written over 250 ‘Globally voice of the silent majority also must a media platform focussed on India’s Speaking’ blogs, which are be heard. They include those who globalisation first came to mind. Opublished online every Friday at don’t always think that the world www.indiaincgroup.com and selected is crumbling around them, who Over the past decade, we have seen ones in the ‘India Global Business’ experience political and business the emergence of two phenomenal magazine. I am pleased to inform decisions in their towns and villages globalisation stories. The China readers that in 2020, some of my which are changing their lives and story, and the India story. China’s columns will be compiled into a book, those around them for the better. global march, however fascinating which currently has a working title it may be, is essentially driven by ‘Positive India’. For instance, despite the economic the state. Whereas India’s is driven slowdown in India, there are many by its people and its business. The Why positive? Well, frankly because measures that the Indian government Indian government has mostly been a there is so much that is negative in has taken, for which credit must be cheerleader – though of late, a rather what is written about India and its due. For instance, the lowering of assertive and, quite often, an effective path to globalisation, that there is corporate income tax rates, not only one with the emergence of Modi. almost a default belief that the glass to historic lows in India, but also must necessarily be half empty. bringing them to competitive levels It’s that story, the story of Indian Alas, a lot of writers feel that in the with the ASEAN bloc countries. business going global in such an pursuit of balanced commentary, Similarly, whilst the debate rages over unprecedented manner, of its vibrant imbalance towards the negative is the India’s new Citizenship Amendment and increasingly influential diaspora, safest path. Act, we have taken the view that in and the interplay between global protesting against its perceived ills, business and policy, that we tell At India Inc., each day we seek to the case of the persecuted and the through our content and our events. disprove this thesis. Every issue, of stateless must not be ignored. course, has two sides. Or, in India’s 2019 has been a watershed year case, multiple differing voices. As a 2020 will also mark a decade of our for India Inc. In the UK, we have passionate believer in democracy own journey as a media house. It established ‘India Global Business’ GLOBALLY SPEAKING M A K I N G I N I N D I A F O R T H E W O R L D

IT’S THAT STORY, THE STORY OF INDIAN BUSINESS GOING GLOBAL IN SUCH AN UNPRECEDENTED MANNER, OF ITS VIBRANT AND INCREASINGLY INFLUENTIAL DIASPORA, AND THE INTERPLAY BETWEEN GLOBAL BUSINESS AND POLICY, THAT WE TELL THROUGH OUR CONTENT AND OUR EVENTS.

Kalyani Group is a 2.5 billion USD multinational conglomerate with high technology, engineering and manufacturing capability across critical sectors such as Defence and Aerospace, Engineering Steel, Automotive, Industrial, Urban Infrastructure and Specialty Chemicals. The Group has been a flag bearer of ‘Make in India’ across sectors including Defence and Aerospace.

E X P A N D I N G H O R I Z O N S as the leading India focussed edition of ‘India Global Business’ in India’s tech capital, as we see business magazine, which we publish September, to coincide with Prime technology playing a huge part in fortnightly from London. Its covers Minister Modi’s memorable ‘Howdy our business going forward. This is have become quite iconic, with many Modi’ event in Houston. I have been that time of the year when we start readers regularly commenting on astonished at the interest that India planning in earnest for our annual them and comparing which they Inc. has received in the US, and India Inc. Leaders’ Summit and India like the most! For me, this year, the this has spurred us to start planning Global Awards in June 2020. Yet most memorable cover was ‘Gandhi some high-profile events in 2020 on again, we will have some blockbuster Cool’, which marked 150 years of the East and West coasts. My team speakers and participants from the Mahatma’s birth anniversary. We has already started to curate a list of across the world. also publish the annual ‘100 Most the ‘100 Most Influential in US-India DEFENCE Influential in UK-India Relations’ Relations’ to complement our UK At India Inc., we believe it’s only a which is widely read and appreciated power list. matter of time before the other half of as a go-to place to get a pulse on the glass fills up to the brim. And we who’s who in this important As a team, we have almost doubled will be there, as always, to bring you bilateral corridor. the number of staff in one year, and a ringside view of that ascent to the have opened an office in Bangalore, global high table. We launched the North America Kalyani Group (Bharat Forge Limited), Mundhwa, Pune - 411 036, India, Tel: +91-20-67042777, M A K I N G I N I N D I A F O R T H E W O R L D

Kalyani Group is a 2.5 billion USD multinational conglomerate with high technology, engineering and manufacturing capability across critical sectors such as Defence and Aerospace, Engineering Steel, Automotive, Industrial, Urban Infrastructure and Specialty Chemicals. The Group has been a flag bearer of ‘Make in India’ across sectors including Defence and Aerospace.

E X P A N D I N G H O R I Z O N S DEFENCE

Kalyani Group (Bharat Forge Limited), Mundhwa, Pune - 411 036, India, Tel: +91-20-67042777, www.indiaincgroup.com December 2019 17 TECH SPEAK TechSagar – Showcasing India’s technology and cyber preparedness by Rama Vedashree

The CEO of the Data Security Council of India explains how a new tech repository enables targeted search of India’s technology capabilities which will open gates for innovation and collaboration across industry and academia.

yber technology capabilities granular and multidimensional search, have become central to detailed and seamless navigations National strategic outlook. As Highlights to discover entities using more than CIndia aspires to become a trillion- 3000 niche capabilities. As of now, dollar digital economy, enhancing • As India aspires to become a the repository features 4000+ entities our preparedness and securing the trillion-dollar digital economy, from industry, academia and research cyber space is a key national priority. enhancing cyber security including large enterprises, start- There is a need for concerted efforts measures becomes a key ups, R&D institutes and individual in developing critical technology national priority. researchers, providing a country-level capabilities in the country for India’s view of India’s cyber competencies. geopolitical advantage. While these • Tech Sagar is a repository Capability mapping has been done efforts have been visible in the featuring 4000+ entities at product level for the industry and past few years, the effectiveness from industry, academia and enterprises which allows to locate of developing national cyber research, providing a country- and comprehend 9000+ products, competence needs closer attention. level view of India’s cyber solutions and services. In addition Start-ups, enterprises, academia, competencies. to this, key investments and fund researchers and R&D institutes in the flow in various technology areas and country need to synergise their efforts • The initiative enables the companies have also been made and work in tandem to achieve this Government to assess the available, subject to availability in national goal. country-level readiness on public domain. strategic technologies for With this view, the National Security future readiness. TechSagar is a dynamic platform Council Secretariat Government of which will be frequently updated India partnered with Data Security academia and research; across 25 with new entities and information to Council of India to conceptualise technology areas like IoT, Ai/ML, maintain its relevancy and usefulness. a 'National Technology Capability blockchain, cloud & virtualisation, Research reports showcasing Repository’, now named TechSagar. robotics & automation, AR/VR, India’s capabilities across several TechSagar, as it sounds – an ocean wireless & networking, and more. technologies like IoT, AI/ML, Robotics, of technology – is a consolidated NLP, AR/VR, and many more are and comprehensive repository which Hierarchical ontologies and detailed available. It is a good example of provides actionable insights about definitions have been built for each government facilitating ecosystem capabilities of the Indian industry, of the technology areas that allow collaboration and industry growth in

18 December 2019 TECH SPEAK

THE REPOSITORY ENDEAVOURS TO PROVIDE DIRECTION FOR A STRATEGIC CYBER ROADMAP OF THE COUNTRY IN R&D, INDUSTRY DEVELOPMENT, AND STRENGTHENING THE PREPAREDNESS OF NATIONAL SECURITY.

a strategic domain. The repository government to have targeted endeavours to provide direction interventions to build capacity in for a strategic cyber roadmap specific technology areas, and drive Rama Vedashree is the of the country in R&D, industry R&D investments in academia and CEO of Data Security development, and strengthening the industry development. Having a preparedness of national security. consolidated view will also drive Council of India, a better collaboration and partnerships premier industry body A central repository like TechSagar between academia and industry, on data protection enables the Government to assess and among industry members, to in India, set up by the country-level readiness on drive an outcome-driven approach NASSCOM. strategic technologies for future in technology development and/or readiness. This will enable the commercialising R&D.

www.indiaincgroup.com December 2019 19 EYE ON BREXIT and above all else. David Cameron was forced to step down as Prime Minister in the immediate aftermath of the referendum in June 2016 when The long road to Brexit takes the results proved most pollsters wrong as Britain voted to leave the EU with a narrow margin of 51.9 per a decisive turn in 2019 cent in favour of Leave versus 48.1 per cent for Remain. by India Inc. Staff The battle lines were instantly drawn as Theresa May stepped in as Prime Minister with the bewildering message of “Brexit means Brexit”, as it soon became clear that what Brexit meant would possibly go down in history as one of the biggest conundrums of our times.

Highlights • A quick trip down Brexit lane shows us the twists and turns of one of the biggest conundrums of our times.

• Three years, two elections and three leadership changes have finally led to some clarity on Brexit.

• Prime Minister Johnson’s decision to call a snap General Election handed him a much-needed Parliament majority on road to meet the 31 January 2020 Brexit deadline.

Deal or no deal The definitive result of the UK General Election in favour Once Article 50 of the Lisbon Treaty of Prime Minister Boris Johnson to get Brexit done had been triggered, the deadline for Britain’s exit from the 28-member ends the year with more clarity on the issue of Britain’s economic bloc was etched in as relationship with the European Union (EU) than there March 29 this year. If all had gone to has ever been since the June 2016 referendum. Theresa May’s plan, the UK would have been a former member of the EU in 2019 and on course to discuss t has taken over three years, two with his central “Get Brexit Done” its future trading relationship with the elections and three leadership theme, setting the UK on course to remaining 27 member-states during changes behind the revolving 10 leave the European Union (EU) by the an ensuing transition period. IDowning Street door but the moment 31 January 2020 deadline. finally arrived days before Christmas However, a controversial backstop – clarity on Brexit. Where it all began clause within the EU Withdrawal It seems way in the distant past but Agreement proved the stumbling Boris Johnson was voted in with an there was a time before Brexit entered block she had clearly not bargained overwhelming majority and the verdict the common lexicon and went on to for. When she had called a snap in the “Brexit election” clearly chimed dominate the UK’s political scene over election in June 2017, May had hoped

20 December 2019 EYE ON BREXIT

IN THE FACE OF A LABOUR PARTY THAT OFFERED YET ANOTHER REFERENDUM IN 2020 FOR THE PUBLIC TO HAVE A SAY ON ANY BREXIT AGREEMENT, THE ELECTORATE VOTED WITH A CLEAR VOICE – TO SIMPLY GET BREXIT DONE.

to win a majority in Parliament to be by the EU to ensure the rights of deadline – a prospect he was so able to get any future agreement she member-country Ireland but seen as a opposed to that he had declared he struck with the EU through the House backdoor attempt to keep the UK tied would rather be “dead in ditch”. of Commons with relative ease. to EU rules even after Brexit by Instead, she found herself reliant using Northern Ireland’s border as For someone who had just emerged on the Northern Irish Democratic an excuse. from a gruelling leadership election Unionist Party (DUP) for a supply just weeks before, the prospect and demand arrangement. To much shock and surprise, Johnson of another election only seemed did succeed in getting that deal to further energise him. He hit the It was this Irish element that ultimately reopened and tabled a fresh version, campaign trail with an unapologetic spiralled out of her control as her so- dubbed Brexit 2.0. message about it being a veritable called EU divorce bill was repeatedly People versus Parliament clash – rejected by her own MPs, resulting The “undemocratic” Irish backstop because the Parliament had failed in her unceremonious exit to make was gone and in its place was the in its duty by not allowing him to get way for Boris Johnson as leader of prospect of an invisible border in the Brexit done despite his “great the Conservative Party after a bitterly Irish Sea. However, many sections new deal”. fought leadership election in July of the Commons remained opposed this year. to the renegotiated deal because Turns out, he had read the public they felt it treated Northern Ireland sentiment of Brexit fatigue right The Boris factor differently to the rest of the UK. when he called for electing a new As soon has he got his feet in the “People’s Parliament”. In the face of a Downing Street door, Johnson/ The Opposition Labour Party also Labour Party that offered yet another issued a stupefying “do or die” Brexit challenged its impact on referendum in 2020 for the public to pledge by the extended Halloween workers’ rights. have a say on any Brexit agreement, deadline of 31 October 2019. He the electorate voted with a clear voice seemed to be the only one convinced People’s Parliament – to simply get Brexit done. that he could bring the EU’s Brexit Faced with a fate reminiscent of negotiators round to the idea of Theresa May’s due to the realities How that tag line really translates into reopening Theresa May’s divorce bill of heading a minority government, reality and what lies in store for the to remove the controversial backstop Johnson announced a snap General future of UK-EU relations continues to – an insurance policy insisted upon Election after missing the 31 October hang in the balance. www.indiaincgroup.com December 2019 21 ADVERT

22 December 2019 GUEST COLUMN

Competing with robots: How online learning can help professionals win in the future

by Zairus Master

The CEO of one of India’s largest online job and recruitment portal elaborates on how reskilling can help avoid slowdown.

he future is exciting but not can impart all these skills among secure. Technologies that are professionals. on the top of the value chain Tbecome obsolete sooner than anyone Sector-specific skill gaps in India can imagine. Highlights Recent studies suggest that the Asia Pacific region is set to face a shortage A report by McKinsey Global Institute, • The rise of artificial of 12.3 million professionals by 2020. conducted in 46 countries, predicts intelligence and data analytics India alone faces a 40 per cent that up to 800 million global workers has changed the dynamics of shortage of job-ready candidates. will lose their jobs by 2030 and be the jobs market. The IT sector requires around 40 per replaced by robotic automation. The cent of its professionals to up-skill rise of artificial intelligence and data • To remain relevant in today’s themselves over the next few years. analytics has changed the dynamics fast-evolving, tech-centric of the jobs market completely. job market, employees must Further, according to the Future of Jobs report by FICCI-Nasscom upgrade their skills regularly. Organisations are looking for an array and EY, 20-25 per cent of existing of new-age skills among employees jobs in the BFSI sector will not exist • Offline skilling courses that can be utilised in fields like and 15-20 per cent of professionals will no longer be able to marketing, HR, operations, banking, will be working in job roles that do agriculture, chemistry, data mining, accommodate the influx of not exist today. Similarly, a report cloud computing, finance, stocks and job seekers looking to upskill by the National Skill Development healthcare, among others. themselves. Corporation (NSDC) mentions that the automobile sector will require 15 The new economy also requires • Online channels offer a viable million skilled candidates by 2022. professionals to possess skills such option for jobseekers looking as creativity, adaptability, critical to upskill. With all sectors undergoing such thinking, leadership and the ability disruptive transformation, what’s the to collaborate seamlessly. No one- way out of this conundrum? time course at a business school Re-skilling! www.indiaincgroup.com December 2019 23 GUEST COLUMN

NEW-AGE SKILLING PLATFORMS HAVE THE POTENTIAL TO CHANGE THE SCENARIO, MAKING INDIA AN ECONOMY OF OPPORTUNITIES THAT ARE OPTIMALLY CAPITALISED UPON AND REALISED.

Re-skilling through online support their upskilling endeavours. candidates, helping them acquire learning platforms skills that boost their career prospects To remain relevant in today’s fast- Thankfully, acquiring these skills considerably. evolving, tech-centric job market, through digital means is no longer a candidates are expected to upgrade challenge. There are several online India’s recruitment space is currently their skills regularly. Professionals, platforms that offer courses in data going through a peculiar phase. especially in the IT sector where science, automation, blockchain, Around 8 million youth enter the new roles are rapidly evolving and the Internet of Things. With a flexible country’s job market every year, new skillsets are required frequently, approach to learning, these platforms yet the companies find it difficult to must continuously upskill themselves allow professionals to upgrade their fill vacancies for crucial roles. The to keep up with the fast pace of skillsets at their preferred pace reason is the ever-increasing skill emerging technologies. At this scale, without having to take a break from gap. New-age skilling platforms e-learning platforms are the only their jobs. Such courses add weight to have the potential to change the way forward. the resume of candidates, increasing scenario, making India an economy their chances of promotion in their of opportunities that are optimally Also, as the number of employees current jobs as well as opportunities capitalised upon and realised. With looking for upskilling opportunities in other organisations. the rise of robotics, re-skilling is the increases, offline skilling courses will answer to staying relevant. no longer be able to accommodate These online learning programmes this demand because the also utilise artificial intelligence infrastructural set-up required to and predictive analysis to map Zairus Master is CEO of Shine. facilitate such large-scale upskilling is skills demand in the industry. This com, India's leading online job limited. Hence, job seekers will have information allows for customised and recruitment portal. to start looking at online channels to course suggestions for individual

24 December 2019 NEWS IN BRIEF

Organisations at both ends are collaborating India-UK relations remain in sectors ranging from defence to media right on track and entertainment.

MG to Invest $422.5mn UKIBC creates a new UK and Indian institutes in India’s automobile vertical for defence in Bollywood tie-up sector cooperation ritish automobile brand Morris o further promote India-UK irmingham City University Garages (MG) is bullish on collaboration, the UK India has struck up a partnership the Indian market and plans to Business Council (UKIBC) with a Mumbai-based Binvest $422.5 million (Rs 3,000 crore) Thas established an Aerospace BRonkel Media Education Institute more in the country. MG Motor India and Defence Industry Group. The to give students the opportunity has already spent approximately $282 initiative is also in recognition to collaborate on major projects million (Rs 2,000 crore) in the country of the relationship between the across the UK film industry and commenced manufacturing two countries in the defence and Bollywood. operations at its plant at Halol and aerospace sector and the in Gujarat. Defence vertical is an example The partnership aims to provide of how this cooperation is being opportunities for students to study taken to a new level. aspects of the media, arts and entertainment overseas as part of Earlier this year, an MoU on the exchange study programmes Defence Technology Industrial between the institutions. Capability Cooperation has been signed between the The tie-up will cover skills in two countries highlighting the areas such as screenwriting, film British government’s efforts in production, visual effects, film enhancing cooperation studies and film business with India. and promotion.

Gaurav Gupta, Chief Commercial Richard McCallum, Vice-Chair, Professor Alison Honour, Pro Officer, MG Motor India, said they UKIBC, said that it will not only Vice-Chancellor and Executive have so far sold nearly 13,000 units support and but will also build Dean, Birmingham City University's of its internet SUV, MG Hector. The on the huge opportunities for Faculty of Arts, Design and Media, company will launch an electric collaboration that exist between said: "This new partnership will internet sport utility vehicle and will the defence industries of the two provide opportunities for students have a total of four models by July sides. The collaboration between to work on collaborative film 2021, all in the SUV segment. companies is expected to not projects and have international only advance India’s defence work placements and exchanges With good response from the acquisition process but also to provide opportunities to gain customers, the company had to foster long-term technology and skills specific to the UK and Indian increase production levels from hardware transfers. Bollywood film industries.” November onward, he said, adding that the car manufacturer would focus He further explained that Sanjeev Sharma, Founder and on the SUV segment as it is fastest the UKIBC supports India’s Director, Ronkel Media Education growing and in tandem with the Make in India initiative and the and Research Institute, said: "Our global trend. new vertical the Aerospace association with Birmingham City and Defence Industry Group University is a great opportunity The company also focuses on can contribute to India’s for Indian students to utilise this expanding customer service centres continued emphasis on defence platform to hone their skill sets and around 250 showroom-cum- modernisation and sophisticated in the best possible manner, and workshops will be put in place by military capabilities. prepare themselves to be absorbed March 2020. by the industry.” www.indiaincgroup.com December 2019 25 INSIGHT

A year of elections that ended with a vote for stronger India-UK ties by India Inc. Staff The year 2019 saw two major elections in the world’s largest and oldest democracies and the common thread in the outcome of both was the promise of a new strategic partnership between India and the UK.

t was no accident that Boris “British Indians have played a vital Johnson saved his visit to one Highlights role in helping the Conservatives of the world’s famous temples in win elections in the past. When I told ILondon, the Swaminarayan Mandir Narendrabhai [Modi] this, he just • Boris Johnson astutely in Neasden, for just days before leveraged the power of the laughed and said Indians are always the General Election on December 1.5-million-strong Indian on the winning side,” he said, striking 12. Being an astute politician who diaspora, by stressing on a note of bonhomie with the Indian has always struck an India-friendly building stronger relations PM who had himself won a solid tone, he knew well the power of the majority in elections earlier in with India in the lead up 1.5-million-strong Indian diaspora, the year. to the General Election especially in these elections as in December. they had been feeling betrayed by “I know Prime Minister Modi is the Opposition Labour Party for its • Johnson’s good relationship building a new India. And, we in the perceived anti-India messages. with Prime Minister Modi of UK government will support him fully Sporting a tilak and garland, Johnson India helps set the tone for in his endeavour,” he added, performed a traditional puja at the amid cheers. the next phase of the India- temple and later told the diaspora UK relationship. gathering that they could well guess New partnership what he had wished for. Well, whether • The Queen’s Speech in It is this spirit of partnership that it was anything to do with those Parliament spelt out the ran through the Conservative prayers or not, his wish certainly did contours of this new post- Party manifesto, which made come true and more as the British Brexit strategy, which will also a categorical reference to India electorate voted him back into 10 include a special fast-track as a dynamic economy. Downing Street with a “stonking” visa for medical professionals. 80-seat majority.

26 December 2019 INSIGHT

IT IS THIS SPIRIT OF PARTNERSHIP THAT RAN THROUGH THE CONSERVATIVE PARTY MANIFESTO, WHICH MADE A CATEGORICAL REFERENCE TO INDIA AS A DYNAMIC ECONOMY.

It read: “We will forge stronger links for South Asia at the International would be open to skilled migrants with the Commonwealth, which Institute for Strategic Studies (IISS), from countries like India on the same boasts some of the world’s most believes the election result should basis as those from within the EU. dynamic economies such as India, pave the way for a real strategic Untethered from the economic bloc’s with which we already share deep partnership, beyond the rhetoric. freedom of movement rules, the historical and cultural connections. Queen’s Speech in Parliament spelt “Convergences on maritime out the contours of this new post- "We will use export finance to security, cyber space, counter- Brexit strategy, which will also include increase our businesses’ access terrorism/extremism and defence a special fast-track visa for medical to emerging markets and engage technology/trade need to be professionals addressing acute diaspora communities in the UK with deepened, thickened, highlighted shortages being faced by the state- this agenda.” and mainstreamed to remove the funded National Health trust-deficit that has recently emerged Service (NHS). The plans are now set in motion, between the two countries,” he says. including a promise to make India Doctors from India have historically one of his first stops been referred to as on his overseas the backbone of the visits trail in the New UK’s health service Year. The prospect but have not had of such a visit was a very welcoming further reaffirmed with ride in recent years. Prime Minister Modi Skilled professionals extending a formal and students from invitation to him India have also during the customary felt unwelcome, a congratulatory phone perception that is call to Downing Street. being addressed if the latest data is anything Trade, security and to go by. environment “The Prime Minister Truly special spoke to Prime relationship Minister Modi of India, The stage is set for who congratulated the New Year to be him on the result the start of what of the General Boris Johnson has Election. The two previously dubbed leaders resolved to a “truly special continue working relationship” with closely together India. on issues such as trade, security and "The sooner we leave defence, and to step the EU and take back up our cooperation control of our trade on climate change policy, the sooner ahead of next year’s COP26 climate However, the complexities of Brexit we can strike a new trade deal with summit in Glasgow,” said a Downing and Britain’s 31 January 2020 timer to India that will deliver new jobs, growth Street readout of that call, soon after leave the European Union (EU) would and prosperity for both our countries. Johnson’s landslide victory. undoubtedly lead to some delays in Securing this new and improved this game-plan being fully rolled out. trading relationship with our friends It sets the tone for the next phase in India will be a priority for me," he is of the India-UK relationship, Movement of people on the record as saying. which experts believe can now be However, it is the impending exit from “unleashed” – to borrow one of Boris the EU which has been repeatedly Now that leaving the EU is really Johnson’s election refrains. flagged by Johnson as a freeing up within his grasp in 2020, it remains to the UK to set up a “fairer” points- be seen how he intends to put those Rahul Roy-Chaudhuri, Senior Fellow based system of immigration – which words into action. www.indiaincgroup.com December 2019 27 THE SMALL PRINT THE SMALL PRINT From India to the UK, Ola has arrived!

Available in South Wales, South West England, Merseyside & the West Midlands and on our THE SMALLjourney across the UK. PRINT

Ola takes you places

Download the ride hailing app

THE28 December 2019 SMALL PRINT THE BIG PICTURE The South Asia cooperation conundrum by Dr Gareth Price

THEWhile, historically, India’s bilateralSMALL relations PRINT with other South Asian countries have been unsteady, the past year has seen some tangible improvement.

hen first elected in 2014, In many respects, hopes that regional PM Narendra Modi made cooperation could be at a “South a point of inviting leaders Highlights Asian” level were always aspirational Wof the South Asian Association for given the relationship between India • Developments on Regional Cooperation (SAARC) to waterways and energy and Pakistan. But put another way, THE SMALLhis inauguration. India’s foreign policy if India couldn’t demonstrate some PRINT between India and its has long shifted between a view that neighbours demonstrate benefits of working with Nepal and its global standing stems from its that regional engagement Bangladesh – its less contentious own significance, or because of its is both feasible and neighbours – hopes for some future regional – and potentially-beneficial mutually beneficial. cooperation with Pakistan, were the – hegemony. 2014 gave hopes that political environment to improve, the latter view might prevail. While • India’s relationship with the would be minute. But by 2019, two tension with Pakistan rapidly ended core BBIN group is finally important areas of engagement hopes that this cooperation may shifting to a position in – waterways and energy – are in be facilitated through SAARC itself, which it acts multilaterally. different stages of development functional engagement within a and demonstrating that regional sub-region of South Asia has been • The 2019 Modi engagement is both feasible and significantly improved. Two areas government’s domestic mutually beneficial. stand out. India now trades electricity focus has raised concerns with Bhutan, Bangladesh and Nepal. within South Asia. By the time of the 2019 election In addition, the creation of a truly – won in part by India bombing regional grid is under discussion, • Enhancing regional trade Pakistan – self-evidently SAARC THE SMALL withPRINT 2019 witnessing the start of is, at best, in abeyance. This year, would serve to stimulate conversations between India, Nepal the health of South Asia’s Modi invited leaders from the Bay of and Bangladesh about exporting economy. Bengal Initiative for Multi-Sectoral Nepalese power to Bangladesh Technical and Economic Cooperation through the Indian grid. (BIMSTEC). This excludes Pakistan, India’s roads. The benefits for North along with Afghanistan from the The second issue on which progress East India, in particular, of accessing SAARC grouping, but adds in is being made is on waterways. India via Bangladesh will be Myanmar and Thailand. Historically, South Asia’s rivers were substantial. Again, India, Nepal and a key conduit of goods across the Bangladesh are developing protocols, BIMSTEC’s limitations are manifest, region. Most of this trade stopped, along with inland ports, to enable an most notably its remit is too wide, however, after partition. The benefits expansion in inland shipping both and its resources too few. But of reviving links are manifold, not least within and between countries. India continues to signal the virtue reducing the number of trucks on of regional organisations, and its THE SMALLwww.indiaincgroup.com PRINTDecember 2019 29 THE BIG PICTURE balanced, but all have signed up to China’s Belt and Road Initiative.

While at times India has sought to limit Chinese influence in its region, it would seem fairer for India to view its neighbours’ engagement with China as completely understandable. It is in each of its neighbour’s interests to ensure that Chinese projects are economically viable, and that they do not lead to unsustainable debts. But with that caveat, China’s ability to construct infrastructure is unquestioned. India’s continued construction of the India-Myanmar- Thailand Trilateral Highway, which commenced in 2001, merely highlights its difficulties in doing so. So how does India’s scorecard read? Politically, many of its bilateral relations face difficulties. The 2015 “blockade” remains a recent memory in Nepal; the citizenship bill troubles Bangladesh and the Chinese-liking Rajapaksa family are back in power in Colombo. And yet, at other times when the “politics” has been more positive, little tangible progress has been made to enhance regional or even bilateral cooperation. relationship with the core BBIN group resulted in almost one million moving (Bangladesh, Bhutan, India and to make-shift camps in Bangladesh In recent years, and at times despite Nepal) is finally shifting to a position with obvious political ramifications. the politics, tangible cooperation has in which it acts multilaterally rather started to emerge. South Asia remains than, as was historically the case, one of the least integrated parts of bilaterally. Given its size vis-à-vis the world, but the trend is upwards. its neighbours, its motivations in BY 2019, TWO IMPORTANT Of course, the trend could reverse, bilateral discussions were frequently AREAS OF ENGAGEMENT – but the longer electricity, for instance, questioned outside of India. This shift WATERWAYS AND ENERGY flows between India and Nepal, the remains positive. – ARE IN DIFFERENT greater the trust generated. Better integrated regions are, generally But the 2019 Modi government has STAGES OF DEVELOPMENT speaking, wealthier than those that undoubtedly been domestically AND DEMONSTRATING are not. Given South Asia’s economic focussed, and many of its domestic THAT REGIONAL slowdown, enhancing regional trade moves have raised concerns within ENGAGEMENT IS BOTH would serve to stimulate the health of South Asia. While Bangladesh’s FEASIBLE AND MUTUALLY the region’s economy. While it seems official comments regarding India’s BENEFICIAL. that domestic concerns are likely to citizenship bill have been relatively dominate, were India’s government to low key, there is increasing alarm at divert its focus from defining India’s the potential implications of the bill, citizenry to improving the well-being given that many of those who would The role of China in South Asia is of its people, expediting regional potentially lose their citizenship will also evolving. The Maldives and integration would be one route presumably be assumed to be from Sri Lanka have rotated between to follow. that country. (relatively) pro-Indian and pro- Chinese leaders. The Maldives is These political events could currently pro-Indian, while Sri Lanka’s Dr Gareth Price is Senior potentially undermine India’s stated new leadership was, when earlier Research Fellow, Asia aspirations for BIMSTEC. Myanmar’s in government, pro-Chinese. Nepal Programme, Chatham House. crackdown on the Rohingya has and Bangladesh are both relatively

30 December 2019 NEWS IN BRIEF

The past few weeks saw great SoftBank, CPPIB among investments from Canadian firms across various sectors major investors in India in India.

Brookfield Infrastructure SoftBank bets big on CPPIB to invest up to in $3.5bn deal with RIL renewable energy in $600mn in Indian fund Gujarat anadian asset management anada Pension Plan firm Brookfield Infrastructure Investment Board (CPPIB), Partners will invest $3.55 billion Canada's biggest public C(Rs 25,215 crore) in the telecom Cpension fund, is investing up to $600 tower assets of Reliance Industries. million in India's National Investment and Infrastructure Fund (NIIF), as it seeks to grow its infrastructure bets in Asia's third-largest economy.

The deal includes a commitment of $150 million in NIIF's Master Fund and co-investment rights of up to $450 million in future opportunities to invest alongside the Master Fund. B Energy, a sister company of Japan's SoftBank, announced that it will invest S$4 billion (Rs 30,000 crore) in the renewable energy sector in Gujarat, a state government release said. Reliance Industrial Investments & Holdings Ltd., a wholly-owned unit of The announcement was made at Reliance Industries, has entered into a meeting between Gujarat Chief binding agreements with Brookfield Minister Vijay Rupani and Manoj Infrastructure and its institutional Kohli, Executive Chairman of partners, which will invest the amount SB Energy. in units to be issued by the Tower Infrastructure Trust, its tower arm. The investment will be in solar energy, wind energy and other After the transaction is completed, unconventional renewable the Trust will own 100 per cent of the energy sources. The NIIF is majority-owned by equity share capital of Reliance Jio institutional investors, but says it is Infratel Private Ltd. (RJIPL), the unit The present installed capacity anchored by India's government, that houses the telecom tower assets. of renewable energy in Gujarat which is also an investor in its is 8,885MW and the state Master Fund. This will be Brookfield’s second government aims to ramp it up investment this year in a venture to 30,000MW by 2022. Of this, India needs investments worth about controlled by Mukesh Ambani. 20,000GW will be used in the $778 billion for highways, urban In March, it agreed to buy the state while the rest 10,000MW transport and renewable energy by lossmaking East-West Pipeline, will be given to other states. 2022, according to the India Brand earlier known as Reliance Gas SB Energy's announcement of Equity Foundation, a government Transportation Infrastructure, at an investing $4 billion will go a long body. With CPPIB's investment, NIIF's enterprise valuation of $1.8 billion way in achieving the target, the Master Fund now has $2.1 billion (Rs 13,000 crore). release added. in commitments. www.indiaincgroup.com December 2019 31 COUNTRY FOCUS India is living up to its potential as an emerging superpower by India Inc. Staff

While the number of foreign visits this year by PM Modi was significantly lesser than last year, India's position in global diplomacy remains strong.

ith only 15 trips in the entire Not everything went to plan. The year, 2019 was relatively long-cherished wish of luring the quiet for Prime Minister Highlights mercurial US President Donald Trump WNarendra Modi who typically does to visit India could not be realised this • Apart from heads of states not miss a chance to bolster India’s of friendly neighbouring year after he declined the invitation image across the world. Last year, the countries, heads of states or to become the chief guest at the number of trips he had made was 23. monarchs from South Africa, Republic Day Parade. Towards the It was not surprising. With long drawn Norway, Mauritius, Argentina, end of the year, Japanese Premier out general elections in the middle of Sri Lanka, Germany, China, Shinzo Abe, who enjoys a particularly the year taking up much of his time, Bangladesh, Saudi Arabia, strong bond with India, had to also Modi’s headspace was occupied Sweden, the Prince of Wales, put off his visit due to the growing more with domestic issues. Netherlands and Monaco unrest in the country over the Citizen visited India in 2019. Amendment Act that was passed That was one of the reasons why earlier in mid-December by the the country attracted fewer foreign • India’s position on Jammu & Indian parliament. heads of states as well. Some of the Kashmir was undisputed and heads of states that came calling unchallenged by most of the In the middle of it at all though, India included South Africa as the chief UN’s members and measures continued to not only enhance its guest at the annual Republic Day to bring in normalcy and stature in global politics but 2019 Parade in January, Norway, Mauritius, development in the region also showed how it was not afraid Argentina, Sri Lanka, Germany, China were also acknowledged. to exert its influence in multilateral and Bangladesh. The monarchs forums. Some key internal decisions with considerable influence in their • India also displayed its like the abrogation of Article 370 and countries that came calling during leadership at the BRICS 35A that had, for nearly 70 years, the year were from Saudi Arabia, summit in Brazil this year. granted special status to the country’s Sweden, the Prince of Wales, northern most state of Jammu & Netherlands and Monaco. Besides, • In 2019, India not only Kashmir, had the potential to snowball as has become the norm, heads enhanced its stature in global into a major crisis in the international of states of friendly neighbouring politics but also showed how arena. Even as India has always countries of Bangladesh, Sri Lanka, it was not afraid to exert maintained that J&K was an integral Mauritius, Bhutan and Nepal also its influence in multilateral part of its territory, Pakistan wanted visited India to see Modi being sworn forums. the world to believe Kashmir was in for the second time in a row. a matter of dispute. It was believed

32 December 2019 COUNTRY FOCUS states include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Japan, South Korea, Australia and New Zealand.

India has had an unenviable record on FTAs in the past and though the pressure was intense, it withstood the temptation and opted to not be a part of it till a time when its concerns were addressed. Most of it was related to China. India has a trade deficit with China that stands at over $50 billion and there were fears that RCEP would have opened more doors for Chinese goods to come through from third countries. India’s stance did not change despite the fact the Chinese premier Xi Jinping met India’s Prime Minister to assuage some of his concerns in September in Mamallapuram.

In the far end of the year, India also displayed its leadership at the BRICS summit in Brazil. The motley group of five nations – Brazil, Russia, India, China and South Africa – makes up almost 42 per cent of the world’s population, 23 per cent of global GDP, 17 per cent of world trade and 26.6 the latter would use all its diplomatic crude oil customer was too significant per cent of this planet’s landmass. channels to corner India on the issue to be ignored. BRICS sought to provide a counter to and retract its decision. The Modi more heavyweight and mature groups government has been able to not only like the NAFTA and EU but some maintain peace in the region – there minor successes aside, differences have been only a handful instances of ANOTHER SHOW OF between members on bilateral any untoward incidents in the valley – STRENGTH WAS THE issues often end up undermining but also expertly leverage its WAY THE GOVERNMENT the forum. India, with its credentials own diplomatic heft to counter and MANAGED THE RCEP as a liberal democratic society and negate Pakistan’s rhetoric on IMBROGLIO DESPITE one of the most attractive investment multi-lateral forums. INTENSE PRESSURE destinations in the world, provides the glue that keeps BRICS relevant At the United Nations Security FROM OTHER NATIONS and holds it together. Without the I in Council in mid-August, India’s ESPECIALLY CHINA. BRICS, it would be reduced to just an position on J&K was undisputed and illiberal anti-Western coalition where unchallenged by a majority of the the fragile economies of Brazil and UN’s members including the Arab South Africa would not be adequate countries while its measures to bring Another show of strength was the counters to the expansionist and in normalcy and development in the way the government managed the divisive perceptions shared by Russia region were also acknowledged. RCEP imbroglio despite intense and China. There was only a feeble protest by pressure from other nations especially China, as expected, and Pakistan China. The Regional Comprehensive Capping a decade where India has was left isolated in its efforts to make Economic Partnership (RCEP) that finally lived up to its potential as Kashmir an international diplomatic has been under discussion since an emerging superpower in global hot potato. Even the middle eastern 2012, seeks to create an integrated diplomacy, the foundation is set for it countries that are traditionally in market comprising half of the world’s to play a decisive role in shaping the Pakistan’s corner, kept quiet on the population and a third of its GDP. future of the world in the next decade. issue. India’s importance as a major Besides India and China, member www.indiaincgroup.com December 2019 33 ANALYSIS Newsmakers 2019 – Influencers on the world stage As with every year, 2019 had its fair share of people making news for their achievements, triumphs, idiosyncrasies, failures and follies. ‘India Global Business’ editors have curated this list of people who they felt deserved the “newsmaker” tag for impacting policy and uniquely highlighting global opportunities and challenges. We left out some of the obvious newsmakers – Donald Trump, Narendra Modi and Boris Johnson – and spread our net wider to search for people who in some way or other have influenced for good (or otherwise) India’s march on the world stage.

rior to the 2019 general elections in India, BJP President Amit Shah revelled in his role as a backroom boy. He did feature regularly in Amit Shah Indian newspapers and on Indian television channels but was hardly Pknown outside the country. That changed when Indian Prime Minister Narendra Modi appointed Shah as his Home Minister. In his new role, Shah has piloted two important – and in the eyes of the Western media, controversial – legislations that effectively defanged Article 370 of the Indian Constitution that granted special status to Jammu & Kashmir and also oversaw the passage of the Citizenship Amendment Act that grants citizenship to persecuted minorities from neighbouring countries.

Even more than the passage of these legislations themselves, it was the follow-up measures to prevent violence in J&K, including placing restrictions on the assembly of people, that got him a lot of media coverage in the West. Ironically, this same J&K move made him a hero in India, second in profile and power only to the Prime Minister. Shah sits on all the powerful cabinet committees, and takes a special interest in Economic matters, like no previous Indian Home Minister.

t’s not very often that a Forbes-listed billionaire finds himself essaying Cyrus Mistry the role of the proverbial David against Goliath. But that is exactly how the battle of attrition between the Tata Group, India’s largest and most Ivaluable business house and the UK’s largest private sector employer, and its former Chairman Cyrus Mistry is playing out. The National Company Law Appellate Tribunal (NCLAT) recently ruled his removal in October 2016 as illegal and ordered his reinstatement as Chairman of the Tata Group. It also held as illegal the decision to convert Tata Sons into a private company. Tata Sons, the holding company of the Tata’s sprawling global empire, and the Tata Trusts, which own two-thirds of the holding company, have said they will appeal the NCLAT orders before the Supreme Court. But regardless of the outcome, this case is expected to become a landmark in the field of corporate governance and the rights of minority shareholders. And irrespective of whether he returns at the helm of the Tata Group, Mistry will go down in the annals of India’s corporate jurisprudence as the David that took on a Goliath and won. ANALYSIS reta Tintin Eleonora Ernman Thunberg has been fairly well Greta Thunberg known in Europe since she Gbegan her “School Strike for Climate Change” movement outside the Swedish Parliament in August 2018 but she really emerged as a global newsmaker with her now famous “You have stolen my dreams… how dare you…” speech at the United Nations Climate Action Summit in September 2019. But this wasn’t her first brush with international fame and acclaim. In May 2019, she was featured on the cover of Time. The magazine also named her among the 100 Most Influential People and the youngest individual Time Person of the Year. Given India’s own young population and its challenges with climate change, this young star resonates with India’s own growing global leadership in this arena.

e promised ideological purity Jeremy Corbyn to the faithful but couldn’t win the trust of others. Jeremy HCorbyn is possibly the most far-left leader of the Labour Party in decades. His rhetoric both in the run-up to the elections and even before harked back to a politics that Britain hasn’t seen in more than a generation – with talk of nationalising key industries, levying higher taxes on the rich and providing several public services free. But his uncompromising ideologically driven stance on several important issues, including Kashmir, turned away many traditional Labour support groups. Corbyn’s Kashmir rhetoric resulted in the socially influential, culturally assimilated and well-to-do Indian diaspora drifting away from their traditional Labour moorings. This is believed to be one of the important contributing factors to the party’s worst electoral showing since 1935. The first-ever India Inc. survey of British Indian voter intentions, in collaboration with 0ptimus, conducted in November 2019, confirmed their dealignment from the UK’s Labour Party. ANALYSIS eIndia’s partially Muthayya Vanitha and Ritu Karidhal successful moon mission Chandrayaan-2 was, to Hparaphrase, Neil Armstrong, “a small step for science, a giant leap for women”. Regardless of how history will judge the mission, it has already made history – it’s the first space mission with an all-woman leadership team.

Project Director Muthayya Vanitha, an electronics engineer, and Mission Director Ritu Karidhal, an aerospace engineer, who were also involved in India's first lunar mission, Chandrayaan-1, and the country’s Mars Orbiter Mission in 2013, have already entered popular folklore in India and have become the latest role models for aspiring women scientists not only in India but all over the world.

he began the year as India’s first full-time woman Defence Nirmala Sitharaman Minister and, following the BJP- Sled National Democratic Alliance’s victory in the 2019 Lok Sabha polls, was appointed India’s first full-time woman Finance Minister. These alone gave her lots of media coverage but were not the only reasons why she has remained in the news. As the Indian economy, following in the footsteps of the world, slowed down, all eyes were on her first Budget, which received a mixed response from experts and analysts.

But a number of bold steps, such as massive cuts in corporate tax rates to 25.17 per cent for existing companies and 17.01 per cent for new ones – making Indian tax rates competitive vis-à-vis its South East Asian peers – and a considerable easing of FDI norms and other business rules have kept her in the news round the year. As India’s GDP continues to dip, Sitharaman’s work is certainly cut out in 2020. ANALYSIS riti Patel made history earlier this year when she became the first Priti Patel woman from an ethnic minority in PBritain to be appointed Home Secretary. First elected to the British Parliament in 2010, she has risen dramatically through the Conservative ranks, being appointed Minister of State for Employment by David Cameron in 2015 and then International Development Secretary by Theresa May before her promotion to her current position. She was a member of the British Parliament’s Foreign Affairs Committee that recently released a damning report that warned that the UK was falling behind in the race to engage with India. Patel will be pivotal in shaping the UK’s post-Brexit relationship with India.

ndia’s Minister for Law & Justice, Communications Ravi Shankar Prasad and Electronics & Information Technology has been in the news because of his single-minded determination Ito ensure that Indians remain owners of the data they generate. He recently piloted the Personal Data Protection Bill through the Indian Cabinet, much to the chagrin of large US technology companies such as Amazon, Facebook, Google, Mastercard and others that have lobbied hard against Indian data localisation rules on the grounds that the requirement of storing data locally would increase costs, sometimes prohibitively, hurt both local and foreign companies and “negatively impact the flow of foreign investments”.

These companies aren’t likely to simply accept the new rules, when they become law, and fade away. So, this issue alone will keep Prasad in the news well into the foreseeable future.

his soft-spoken alumnus of IIT- Kharagpur made a splash when Sundar Pichai Google Co-Founders Larry Page Tand Sergei Brin relinquished control of the company they had co-founded more than two decades ago and handed over the reins of parent company Alphabet to him. This was a crowning moment for Pichai, but it wasn’t entirely free of controversy. The job came with the grant of $240 million in stocks that are tied to performance and will vest over the next three years. This immediately reopened the debate in the US about excessive C-suite pay scales. Catch the opportunity

Talk to us about our Cash ISAs Offering attractive rates

sbiuk.com PERSONAL BANKING | CORPORATE FINANCE | INTERNET BANKING | BUY-TO-LET MORTGAGES 0800 532 532 MONEY TRANSFER | COMMERCIAL LENDING | SAFE DEPOSIT LOCKERS

CITY OF LONDON | BIRMINGHAM | COVENTRY | EAST HAM | GOLDERS GREEN | HARROW HOUNSLOW | ILFORD | LEICESTER | MANCHESTER | SOUTHALL | WOLVERHAMPTON State Bank of India (UK) Limited ("SBI UK") is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number: 757156). SBI UK is registered in England and Wales (Registered no: 10436460), with a registered office at 15-17 King Street, London EC2V 8EA. Your eligible deposits with State Bank of India (UK) Limited are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit protection scheme. For further information, please visit www.fscs.org.uk. Terms & Conditions Apply. For more information or clarification, visit us at our website www.sbiuk.com or visit your local branch. The contact centre (0800 532 532) is open 24/7.

38 December 2019 NEWS IN IMAGES 2019 – A snapshot A brief round-up of events that created quite a buzz across the globe in the past year.

Trouble in Pulwama

n 14 February, forty Central Reserve Police Force (CRPF) personnel were killed in a Oterrorist attack as an explosives-laden vehicle rammed into their bus in the district of Pulwama in Kashmir. The attacks were identified as originating from Pakistan. On 26 February, the Indian Air Force retaliated by bombing a terrorist training camp in Pakistan. The resulting tensions brought both countries to war before tensions de-escalated.

President Trump terminates India's preferential trade status under the GSP programme

n 4 March, Trump announced that the US would terminate India's designations as a Obeneficiary developing country under the GSP programme, after determining that India had not assured the US that it will provide "equitable and reasonable access" to its markets.

Narendra Modi’s landslide win in Indian general elections.

he world’s largest democracy saw as many as 900 million citizens Tcasting their votes that resulted in the Bharatiya Janata Party (BJP) gaining a landslide victory, gaining 303 out of 543 seats and winning Narendra Modi his second term as Prime Minister. www.indiaincgroup.com December 2019 39 NEWS IN IMAGES

India’s space odyssey continues with Mission Shakti

ission Shakti propelled India into an elite club of four countries, including China, MRussia and the US, to successfully deploy the A-SAT technology by destroying one of its own satellites in space.

Theresa May formally resigns as Prime Minister of the UK

rexit claimed its second Prime Minister in June 2019, as Theresa May stepped down Bafter nearly three years of serving as the UK Prime Minister over failed Brexit negotiations.

Commonwealth at 70

he commonwealth celebrated 70 years since its inception in 1949. But Twith several other multilateral initiatives now in play, can the Commonwealth justify its purpose and its importance?

40 December 2019 NEWS IN IMAGES India’s lunar mission: Chandrayaan-2

espite losing contact with its moon lander, India’s second lunar mission, DChandrayaan-2, was still seen as a success in many ways. The mission was the most complex mission ever attempted by India's space agency and is perceived to have paved the way for future Indian missions to land on Mars, thus opening up the possibility of India sending astronauts into space.

China announces $75 billion in tariffs on US goods

he Customs Tariff Commission of China’s State Council announced $75 billion in tariffs on US goods. 5 Tand 10 per cent tariffs were to be imposed on 5,078 US goods from September 1 (list 1) and 15 December 2019. President Trump reacted by ordering American companies to immediately start looking for an alternative to China, creating a business opportunity for many countries in South Asia, including India.

Article 370

n an unprecedented move, India revoked article 370 of the Indian constitution which Igranted Jammu and Kashmir a special status, in a bid to extend the full benefit of India’s constitutional rights and address the unrest in both regions. The move provoked criticism and bias from international press but received support from international leaders who viewed it as ‘India’s internal matter.’ www.indiaincgroup.com December 2019 41 NEWS IN IMAGES A change in tact: Modi and Xi meet in Mamallapuram

ndia and China, though not inimical to each other, have often had conflicting views on Imost issues. However, in a powerful display of developing diplomacy, leaders of both countries found a way of discussing bilateral issues in a much-publicised meeting in an ‘informal summit’ at the historical Mamallapuram in Tamil Nadu, India.

The UK restores the two-year post- study work visa for international students

n a much-anticipated move, the Boris Johnson government reversed a key plank of then Home Secretary Theresa May’s restrictive immigration Ipolicies in September. The reversal allows international students, including those from India, to work on a two- year work visa after graduating from a British university. The move was hailed with much praise all around and has been pivotal in boosting the number of international students coming to the UK.

Howdy Modi: PM Modi visits Houston

rime minister Modi’s address to 50,000 largely Indian Americans in Texas was a first-of-its-kind Pand largest mass rally for a foreign leader in the southern American state. The event was seen as a symbolic strengthening of US-India ties as PM Modi walked hand-in-hand with President Donald Trump, greeting the crowds, and addressed the UN General Assembly a few days later in New York.

42 December 2019 NEWS IN IMAGES PM Modi receives Global Goalkeeper award for Swachh Bharat Abhiyan rime Minister Narendra Modi received the ‘Global Goalkeeper’ Award by Bill and Melinda Gates PFoundation for the Swachh Bharat Abhiyan. The Swachh Bharat Abhiyan initiative is just one instance where PM Modi has reinvented Mahatma Gandhi – India’s most iconic global brand – as a modern icon whose personal example symbolises many solutions the world urgently needs for the problems it is facing, including sanitation.

India axes its corporate tax

n a bold move to encourage FDI investment into India, Indian Finance Minister Nirmala ISitharaman cut India’s corporate tax rate from 34 per cent to over 25 per cent. She also announced a new tax rate of 17 per cent for manufacturing companies setting up after 1 October 2019.

The first India-Japan 2+2 dialogue takes place

n an indication of the increasingly close ties between the two nations, India and Japan concluded their Ifirst ever 2+2 dialogue in late November 2019. The only other country India has held a 2+2 ministerial dialogue, which is seen as an upgrade from any meeting at a secretarial level, is the US, which makes the significance of the India-Japan dialogue even greater, with hopes that both counties will fulfil the potential of their bilateral relationship. www.indiaincgroup.com December 2019 43 UK-India203(w)x266(h).pdf 1 28/05/19 2:06 PM

NEWS IN IMAGES Johnson returns to power after a strong victory in General Elections The Centre for oris Johnson’s astute decision to call a snap election and leverage the power of the New Economic B1.5-million-strong Indian diaspora by stressing on building stronger relations with India paid off. On 13 December, Johnson and the Diplomacy Conservative party were voted back into 10 Downing street in a historic win in the December general election.

India approves the Personal Data Protection Bill C

he Indian government recently M

approved The Personal Data Y Protection (PDP) Bill that will Tgovern the storage, use, processing, CM analysis and monetising of all data MY generated by Indians within the territory CY of India. The Bill is a momentous step forward to prevent data colonisation in CMY line with the broad global consensus K on the issue. The Bill is expected to Discovering new Engagement be passed and signed into law by the President of India very soon. in the 21st Century

President Trump is impeached

n 18 December, US President Donald Trump was impeached and now faces the next Ostage of a process that could, with enough support in Congress, see him removed from office. President Trump was impeached by the House on charges of abuse of power and obstruction of Congress. However, given that the Senate is currently controlled by the Republican Party, the conviction is unlikely to take place.

44 December 2019 @orfonline @orf_online https://www.orfonline.org/cned/ UK-India203(w)x266(h).pdf 1 28/05/19 2:06 PM

The Centre for New Economic Diplomacy

C

M

Y

CM

MY

CY

CMY K Discovering new Engagement in the 21st Century

www.indiaincgroup.com@orfonline @orf_online https://www.orfonline.org/cned/December 2019 45 WHAT'S UP/WHAT'S DOWN India and the world in 2019 by Arnab Mitra From handling often unjustified US demands on trade to tackling its delicate ties with China, from forging even closer ties with all-weather partners Japan and France to putting its relationship with the EU on track to maintaining its interests around the world, India had a busy year on the world stage. ‘India Global Business’ takes a look at some of India’s key bilateral relationships.

ew Delhi and Washington came closer than ever before in the diplomatic and strategic United States sphere. In several meetings at various high Nlevels, including between Indian Prime Minister Narendra Modi and President Donald Trump, the of America two sides reiterated their commitment to a peaceful Indo-Pacific, which, as everyone knows by now, is diplomatic code the joint efforts to check the rise of a belligerent China in the region. US arms sales to India continued, with the induction of the Apache helicopters and M777 howitzers into the Indian Air Force and Indian Army, respectively. But Trump’s grandstanding on trade and his withdrawal of Generalised System of Preferences (GSP) benefits to $5.7 billion of imports from India soured the trade relationship. Resolving this should be on the top of the bilateral to-do list for both nations in 2020.

or historical as well as commercial and strategic reasons, the UK remains one of India’s most enduring global partners. And many will say that FBoJo’s re-election as Britain’s Prime Minister will ensure that it stays that way. In particular, his decision to do away with Theresa May-era restrictions on post-study work visas for overseas students is expected to benefit United Kingdom Indian students and restore the UK’s status as one of the two main foreign study destinations (along with the US) for Indians. This will help calm nerves in New Delhi and help smoothen feathers ruffled by the May government’s unsympathetic handling of India’s core concerns. Analysts will be keenly watching if the much talked about limited trade pact between the UK and India is finalised in the coming year. They will also keep a close watch on the 1.5 million-strong Indian diaspora, whose contribution to Britain’s economy, social and cultural life and now politics is way beyond their strength in numbers. Traditional Labour supporters, their swing away from Jeremy Corbyn’s Labour is believed to have contributed partially to that party’s defeat in the just-concluded elections. The role of this community in British public life and its continuing contribution to bringing the UK and India closer will be keenly followed. WHAT'S UP/WHAT'S DOWN

hina remains, arguably, India’s most troubled relationship – not a friend or ally but not really an enemy, either. Apart from the strategic China Cand military relationship, which remains skewed in Beijing’s favour, there is the trade relationship, where China runs a massive trade surplus with India, which was at $53 billion in 2018-19. At his October summit in Mamallapuram in the southern state of Tamil Nadu with Chinese President Xi Jinping, Modi pushed for greater access for Indian goods as well as a lowering of non-tariff barriers. India has been pushing for greater access for its generic pharmaceuticals and information technology companies, among others, to the Chinese market, but Beijing has stonewalled these. The next stage of the relationship could be set by China’s response to India’s demands and New Delhi’s willingness to otherwise allow Chinese telecom equipment supplier Huawei to sell its 5G equipment and technology to telecom companies in India.

ndian Prime Minister Modi met his Japanese counterpart Shinzo Abe several Japan times – including at the G-20 summit in IJapan and thereafter on the sidelines of a multilateral meeting in Russia – but the bilateral meeting in the north eastern Indian city of Guwahati had to be postponed. This has not in any way hurt India’s ties with arguably its closest ally in Asia with which it shares not only its democratic values but also a common vision for the development of the region. The two countries will look to build on the warm ties in the new year.

ermany is likely to become India’s most Germany important partner in the European Union (EU) once Brexit becomes a reality. The Gbilateral relationship is based on robust trade and commercial ties, with more than 1,700 Germany companies that have invested more than $12 billion since 2000. In recent times, though, the two countries have focused on sustainable development and climate change – Indian Prime Minister Narendra Modi’s International Solar Alliance (ISA) initiative dovetails well with Germany’s technological superiority in this and allied sectors. This was emphasised by the two sides when German Chancellor Angela Merkel visited India in October- November this year for the biennial 5th Indo- German Inter Governmental Consultations (IGC) with Indian Prime Minister Narendra Modi. WHAT'S UP/WHAT'S DOWN f Germany emerges as India’s closest trade France partner in the EU following Brexit, France will almost certainly be New Delhi’s strategic Iand defence partner of choice within the bloc. France has traditionally been India’s all-weather friend within the EU and the strategic-defence relationship received a boost when French armament company Dassault delivered the first of 36 Rafael fighter jets to the Indian Air Force. Indian Prime Minister Narendra Modi’s visit to France in August and French President Emmanuel Macron’s return visit three months later and the announcement of a three-pronged security partnership in the southern Indian Ocean deepened the security ties between the two countries.

he year was marked by the landmark agreement between India and Russia on the joint production of AK 203 assault rifles for Tthe Indian army, navy and air force as well as some para-military forces at Amethi in the northern Indian state of Uttar Pradesh. But a bigger achievement was Russia the payment of the first instalment for the Russian S400 Triumf missile shield that India is purchasing from Russia for $5.43 billion in face of possible US sanctions under Countering American Adversaries Through Sanctions Act. Though it is negotiating with the Trump administration for a waiver of sanctions, India has indicated it will go ahead with the purchase regardless of the US view on the matter. The two countries are also likely to sign multi-billion-dollar agreements for the joint production of military helicopters, warships and other platforms despite the threat of US sanctions – a sign that India’s longstanding strategic ties with Russia remain robust even as it comes closer to the US.

he European Union (EU) is India’s largest trading partner, but the EU, as a bloc, doesn’t European Union command the same importance in New Delhi Tas some of its key members, such as the UK, France and Germany, do. That could also be why the India- EU Free Trade Agreement (FTA), in the works since 2007, is still in limbo. Why, for example, should New Delhi grant easier market access for several EU products such as second-hand cars, agricultural items and services, accept a stronger intellectual property regime and environmental, human rights and social clauses that it considers completely extraneous to trade when Brussels refuses to consider its demand for easier entry norms for its professionals? With neither side willing to budge, it will need someone with the political heft like German Chancellor Angela Merkel to make this mountain move. WHAT'S UP/WHAT'S DOWN he Indian government continued its outreach Africa to Africa and its 54 countries – both as a trade and business partner as well as a Tstrategic ally – in 2019 as it had done in Indian Prime Minister Narendra Modi’s first term in office. In a diplomatic coup of sorts, India gave the Government of Niger a grant of $50 million, which the Sub-Saharan West African nation used to fund the African Union Summit it hosted earlier in July. Indian companies such as the Tata Group, the Mahindra’s, L&T, Bharti Airtel and others continued to spread in Africa and Indian pharmaceutical companies such as Cipla, Dr Reddy’s Labs and Ranbaxy, among others, continued to win hearts by supplying generic versions of several life-saving drugs at a fraction of the price charged by the original Western patent owners.

ASEAN ndia withdrew from Regional Comprehensive Economic Partnership (RCEP), a multilateral trade deal backed by the ASEAN but continued Ito its close strategic and trade ties with the 10-nation bloc. During the year, Malaysia, with which India shares a somewhat ambiguous relationship on account of its support for the Pakistani position on Kashmir, shortlisted Tejas, the Indian light combat aircraft, among five others for its air force. Ties with the bloc remain warm and India will look to build on these in the years ahead.

019 will be remembered as the year in which Pakistan the Narendra Modi government redrew the red lines. Defying Pakistan’s so-called 2N-umbrella, Indian fighter jets entered deep inside Pakistan and bombed a terrorist training camp on February 26. This was in retaliation against a Pakistan-backed terrorist group attacking an Indian para-military convoy in Jammu & Kashmir that killed 44 Indian soldiers 12 days earlier. Though formal talks are still not on the table, the two sides inaugurated a corridor to enable Indian Sikh pilgrims to visit the birthplace of the founder of Sikhism in Pakistan without visas. REWIND 2019

Highlights from the past year REWIND 2019

India’s reform agenda is on track

Mark Mobius, an emerging markets fund manager and Founder of Mobius Capital Partners, shares his thoughts on the recent economic reforms in India, opportunities for investment in India's private sector, and his Invest for Good mantra.

oes this era of trade from a relatively low base. The secure conditions. There is, of wars worry you from an only worry would revolve around course, a danger of blockchains investment perspective? the government and its ability to being interfered with and invaded. D accelerate reforms and reduce Thus, such systems will need to be No, it does not as for every problem bureaucracy barriers to change. The carefully monitored and restricted there will be an opportunity. For key is to give the private sector room to tight-knit groups with mutual example, while some Chinese to grow. guarantee systems. Cryptocurrencies manufacturers are losing business as continue to grow based on the a result of restrictions on exports to How do you see India's corporate faith that users have the ability to the US, manufacturers in India and rate tax cut playing out in the use such currencies as a means other countries will gain an export context of investor sentiment? for payment. It is really a matter of advantage. faith just as any currency depends The sentiment is very good as a on the users’ faith in their ability to Is India's reform agenda on the result of the tax cut. Here, I am use it to purchase and sell goods right track to weather the storm referring not only to foreign investor and services. The interest in such and maybe even reap some sentiment but domestic investor currencies stems from the desire of benefit? sentiment which is actually more people to make transactions with important. The degree to which speed and confidentiality. Thus, Yes, India’s reform agenda is on the government can encourage often such currencies are used for track as evidenced by the dramatic investment, such as taking measures illicit purposes despite the fact that reduction on taxes that was recently like tax cuts and reductions in many legal and proper transactions introduced. It is clear that the bureaucratic barriers to growth, will are being made in order to enhance Modi government is taking actions determine the degree of positive confidentiality. designed to boost the economy investor sentiment. through reform to encourage private How would you distil your 'Invest investment which is the best driver What are some of the aspects of for Good' message for the world? for economic growth. trends such as blockchain and cryptocurrency we should all be Invest for Good means that whenever What most excites you about the wary of? you invest, it should be done with the Indian market; conversely, are long-term goals of obtaining a good there particular areas of concern? Blockchain is really an enhancement return for shareholders by improving of ideas already in place, when governance so that environmental What most excites me about the we examine the international and social good can be enhanced. Indian market is its tremendous system of money transfers where size and the opportunity to grow there is a sharing of data under REWIND 2019 India is harnessing the power of tech to transform lives In this exclusive interview with ‘India Global Business’, Ravi Shankar Prasad, India's Minister for Communications, Electronics & Information Technology and Law & Justice, discusses a wide array of topics, ranging from strides in the country's electronics industry to the Digital India movement, as well as creating a vibrant ecosystem for start-ups and emerging technologies.

52 December 2019 REWIND 2019

TODAY, INDIA IS KNOWN IN THE WORLD AS A COUNTRY WITH 1.16 BILLION PHONE USERS, 1.24 BILLION PEOPLE WITH A BIOMETRIC-BASED DIGITAL IDENTITY, AADHAAR, OVER 600 MILLION INTERNET USERS WHO ARE USING THE INTERNET AT THE LOWEST TARIFFS IN THE WORLD AND THE SECOND LARGEST START-UP ECOSYSTEM IN THE WORLD.

ongratulations on being in India. India has now become which is only increasing day by day. recognised as one of the the second largest mobile phone most influential leaders of producer in the world. It feels great Despite great success in Cthe world in the field of digital when I read behind an iPhone, electronics manufacturing governance. How do you see “Designed by Apple in California. in recent times, exports of this recognition? Assembled in India”. electronics are still less than $10 billion. Is there a roadmap to Thank you very much. I see India offers a huge domestic market change this? this recognition as a global as well as a very competitive export acknowledgement of the success product manufacturing base for the Yes. Our efforts are geared towards of Digital India, which is a visionary electronics industry. The talent pool encouraging exports of electronics initiative of Prime Minister Narendra of professionals, strong software from India in a big way. When Modi to transform India by using the industry, low cost of labour, friendly we say Make In India, it means power of digital technology. In the government policies and now a manufacturing for Indian markets as last five years, India has witnessed corporate tax rate as low as 15 per well as for the export markets. Export transformation in every aspect cent makes India a great destination promotion is an essential component of life where digital technologies for global electronics manufacturers. of Make in India and our policies are have led to inclusive growth and I would urge the global electronics geared towards that. More efforts empowerment of citizens. Today, industry to invest in India and I are being made to develop India’s India is known in the world as a assure them of full support from electronics manufacturing export country with 1.16 billion phone users, the government. oriented. Certainly, we will see a fast 1.24 billion people with a biometric- rise in electronics exports from India based digital identity, Aadhaar, over What is your take on critics who in the near future. 600 million internet users who are claim mobile phones that are using the Internet at the lowest being produced in India are merely There is a feeling that the tariffs in the world and the second assembled and have low domestic Government of India is focussing largest start-up ecosystem in the value addition? mostly on the mobile phone world. These and several other basket and not enough on other achievements of Digital India are When we started encouraging mobile consumer electronics goods. Your now being acknowledged globally. phone manufacturing in 2014, there comment on this. I feel the acknowledgement by the were only two manufacturing units apolitical is actually a recognition for in India. The electronics industry This is not a correct perception. the visionary leadership of our Prime needs a fully developed ecosystem It is true that recent achievements Minister and tech savvy citizens of various component manufacturers, in electronics manufacturing are of India. service providers, design solution dominated by mobile phones but providers etc. We started by inviting there are other verticals which India has made significant strides major mobile phone manufacturers have grown as well. Out of the in electronics manufacturing in to set up their units in India and total electronics produced from the last five years. What is your allowing them to import components. India, mobile phones consist of message to global investors in the But at the same time, we developed 37 per cent, industrial electronics electronics industry? a Phased Manufacturing Plan with consist of 18 per cent, consumer the industry where we incentivised electronics consist of 17 per cent, Indeed, in the last five years, India gradual domestic value addition. This electronics components consist has achieved tremendous growth in has gradually allowed the component of 15 per cent. There is immense electronics manufacturing. In 2014, manufacturers and other service potential to diversify it further. We the value of electronics produced providers to start their work from are encouraging investors to invest in India was $29 billion which India. You will notice that each year in automobile electronics to cater to increased to $70 billion in 2018. the domestic value addition has been India’s huge auto industry. Medical There were only two mobile phone increasing and we are working to electronics is another big opportunity manufacturing units in India in 2014. enhance it further. This approach has that awaits manufacturers. The Today, there are 268 mobile phone, created nearly 500,000 new jobs in Modi government has encouraged components and accessories units the electronics manufacturing sector defence manufacturing in a big way www.indiaincgroup.com December 2019 53 REWIND 2019

and defence electronics holds great destination for global investors. innovation and entrepreneurship in potential from that standpoint. India’s India’s ranking in the World Bank’s India and that is why, in a short span space programme is one of the best Ease of Doing Business Index of five years, India has become the in the world which can offer exciting improved from 142nd in 2014 to 63rd second largest start-up ecosystem opportunities for space electronics. in 2019. There are improvements in the world. There are 24,000 Therefore, it is our conscious effort to in every aspect of doing business registered start-ups in India. Nearly diversify electronics manufacturing in including land and labour laws. 8,000 of them are deep tech start- a big way. Whatever more needs to be done will ups. 24 of these start-ups have be done by our government. become unicorns. Our government India has cut corporate taxes but brought out a dedicated Start-up bottlenecks remain. How long Policy with several incentives for will it take for India to become I WOULD URGE THE start-ups. In 2019, we also brought competitive vis-à-vis economies GLOBAL ELECTRONICS out the National Policy on Software like China? INDUSTRY TO INVEST IN Products to develop the software product potential of India. According The Modi government has taken a INDIA AND I ASSURE THEM to a recent trend, India is fast very bold decision by reducing the OF FULL SUPPORT FROM becoming a preferred destination corporate tax rates to 15 per cent THE GOVERNMENT. for tech start-ups for research and from 30 per cent. This, coupled development works, which clearly with measures to improve the ease implies that India is an attractive of doing business in India, has We have start-ups like Flipkart, destination not merely because of really encouraged the investors’ Oyo and PayTM that have low cost of labour but also because sentiments in India. That is why India replicated the success of of a highly qualified talent pool. received $65 billion as foreign direct companies in the West. When Hopefully, with these sincere efforts investments in FY 2018-19, which will we see an Indian Google, from the government and the rising is the highest ever in a financial Facebook, Twitter or entrepreneurial appetite of innovators year. Even in the first quarter of Tesla emerge? in India, we will get to see a world- FY 2019-20, the FDI received in class internet giant from India. India is 28 per cent higher than the It is our collective desire as well as same quarter of the previous year. effort to see that an Indian Google, You mentioned that Digital India We are working towards removing Facebook, Twitter or Tesla emerges. is bringing about inclusion and all other disabilities to make India In the last five years, Prime Minister empowerment. What steps have a competitive and favourable Modi has given a lot of emphasis on been taken to achieve this goal?

54 December 2019 REWIND 2019 Could you share some of the achievements in the digital payment sector?

India is one of the fastest growing digital payment ecosystems now. In November 2016, a total of 918 million digital payment transactions worth $1.57 trillion were recorded, which increased to 3.32 billion transactions worth $4.8 trillion in July 2019. The Unified Payment Interface (UPI) platform, which is a unique Indian innovation, has allowed the proliferation of easy and simple mobile-based digital payments. Aadhaar Enabled Payment System (AEPS) is another Indian fintech innovation that uses the Aadhaar biometric of a user to authenticate digital payment transactions from their Aadhaar linked bank account, enabling even an illiterate person to make digital payments. RuPay debit and credit cards have been given to most of the Jan Dhan bank accounts opened for underprivileged people. All this has created a very vibrant digital payment ecosystem in India, which is growing very fast and is leading to the creation of a clean, transparent and robust economy.

What is your big vision for a digital future? It is Prime Minister Modi’s vision low-income individuals using their to transform the lives of ordinary digital identity Aadhaar and created a India missed out on the industrial citizens by using the power global example in financial inclusion. revolution because of colonial of technology. Earlier, digital Building on this, India has created occupation. India also missed out technologies were confined only to homegrown fintech products which on private sector led growth in the the educated and urban sections of these people can use to carry out second half of the 20th century society. Digital India has taken the their banking transactions using due to the license-permit-quota benefits of technology to the poorer biometric-based micro ATMs in their regime. India will not miss the digital sections and improved their lives by villages, without needing to visit a revolution but rather it will be a ensuring access to entitlements and bank branch. More than 350,000 leader in this. The Indian government information in an easy, affordable Common Service Centres – digital has already set up many centres of and efficient manner. We created service delivery kiosks – that are excellence in emerging technologies a tech-based platform of Direct offering banking, eGovernance, like Artificial Intelligence etc. We Benefit Transfers to send financial skilling, digital literacy, utility bill are working closely with industry, entitlements of the low-income group payment services to common academia and innovators to develop directly into their bank accounts. This citizens have been set up in small a vibrant ecosystem in emerging led to savings of $19.8 billion – an towns and rural areas. India has also technologies. The Government has amount that was earlier going into undertaken the world’s largest digital also prepared a roadmap to develop the hands of fake beneficiaries or literacy program to make 60 million India as a $1-trillion digital economy middlemen. Access to the banking rural adults digitally literate. Several by 2024 as part of the larger effort system was a distant dream for such measures have undertaken by to make India a $5-trillion economy. this demographic until 2014. In the our government has indeed made India’s digital future is very bright, last five years, India opened more inclusion and empowerment using optimistic and full of opportunities. than 370 million bank accounts for technology a reality. www.indiaincgroup.com December 2019 55 REWIND 2019

Smart cities in India have attracted the world’s leading tech providers

Hardeep Singh Puri is a dynamic force in the Indian Cabinet, in charge of the Ministry for Housing and Urban Affairs and Civil Aviation, as well as a Minister of State in the Minister of Commerce and Industry. In this interview during a recent UK visit, he covers a wide spectrum of issues under his various portfolios as he traces India’s slow but sure journey to becoming a $5-trillion economy by 2024.

ow are the government’s economy by 2024 and $10-trillion the loans, that's how we get flagship programmes economy by 2030. more money. moving India towards the H$5-trillion economy by 2024 goal? What is the role of foreign There is very strong foreign investments on the road to component both in terms of FDI All the flagship programmes are this goal? and such finance in many of these doing extremely well. In the four years schemes. since the Modi government's flagship We are and always have been open programmes started, from June 2015 to Foreign Direct Investment. But in What is your message for global to 2019, the amount of expenditure these programmes, particularly the players vis-a-vis the aviation incurred on urban schemes is nearly Smart Cities programme, since there sector; are privatisation plans six times when compared to the was not much experience, many of on track? Congress-led UPA government’s 10 the technology providers are in effect years between 2004 and 2014. foreign companies. So, 42 of the Civil aviation is a critical growth leading companies from 14 different area for India. I expect in the years The Amrut Mission, which covers 500 countries are participating in that. to come a lot of foreign players will cities for stormwater drainage and be showing interest. In the Budget basic amenities, Smart Cities – all are There is FDI taking place in a large speech, the finance minister [Nirmala doing extremely well. number of areas. For instance, Sitharaman], talked about 100 per the Delhi Metro was set up with cent FDI in the setting up of MROs Currently, India's GDP is $2.89 a loan from Japan's JICA [Japan [Maintenance, Repair and Operations] trillion and we are slowly but surely International Cooperation Agency]. in several other civil aviation sectors. on a journey to become a $5-trillion And, because we are able to repay The privatisation process of Air India, REWIND 2019

CIVIL AVIATION IS A CRITICAL GROWTH AREA FOR INDIA. I EXPECT IN THE YEARS TO COME A LOT OF FOREIGN PLAYERS WILL BE SHOWING INTEREST.

the flag-carrier, is now full swing, and which will increase to 200 with 70 of free] with the exception of one should be completed in the coming them dealing with international traffic. state [West Bengal], which I am months. Today, we are the third- hoping will complete its processes largest domestic civil aviation, but we Currently, the Delhi Airport carries and also become ODF by the end will be the third-largest overall and the 70 million passengers a year. With of December. We have travelled a rate at which we are proceeding, our the commencement of the fourth very long way in order to be able to share of global traffic can runway and its current expansion achieve that objective. only increase. plans, we are looking at something like 100 million passengers a year But we are not going to stop there. In the coming decade, civil aviation in the existing airport. And another We are adding to ODF, fecal sludge will be a critical driver of economic airport in Jewar [Uttar Pradesh] for management, completely ridding growth in India. We have just 7 per which bids have been invited and the India of single-use plastics and so on. cent penetration in the civil aviation award will take place within a month sector and we register double digit or so. Therefore, we are looking at a The physical target of building toilets rates of growth. combined civil aviation traffic which is not the difficult part. The really will be larger than the 140 million difficult part always is that such How are the infrastructure needs at Heathrow and the other schemes, in order to be successful, in the civil aviation sector being London airports. have to be anchored in behavioural addressed? change, and that's the good news. What are some highlights in the The Swachh Bharat mission has When Jet Airways ceased operation in urban affairs sector? succeeded because of a Jan Andolan April this year, we had 590 registered or people's movement, which has civil aviation aircrafts in India. Today, The Swachh Bharat Mission is a succeeded in transforming a project we have many more – the figure is roaring success. The sanitation cover of the government into a project of already close to 650, if not higher. in India prior to the mission was the people. And we have 100 airports today with about 30 per cent or so. Today, all of 35 dealing with international traffic, rural India is ODF [open defecation REWIND 2019

Advances in technology provide an effective tool for improving pharma access

Kiran Mazumdar-Shaw, Chairperson and Managing Director of Biocon, elaborates on the company’s revolutionary breakthroughs in the recent years and pinpoints what needs to be done to give impetus to the pharma industry in India.

as technology created a Recently, we announced our survival for cancer patients without level playing field in the commitment to enabling universal the negative side effects of traditional pharmaceutical area and access to high-quality insulin by chemotherapy. Hhelped improve pharma access? offering recombinant human Insulin (rh-Insulin) at less than 10 US cents/ It is currently expensive and only Advances in technology provide day for procurement by governments a handful of patients in the West a very effective tool for improving in low and middle-income countries can afford it. Therefore, I have pharma access and thus reducing (LMICs). spearheaded the creation of a new healthcare disparities across the company called Immuneel, formed on globe. Currently, technology is not While we do our part, all stakeholders philanthropic capital and with an initial being effectively leveraged to create a – the government, corporates and platform of about $25 million, to bring level playing field in terms of pharma non-profits – need to come together this treatment to India. access. For example, insulin, despite and leverage technology effectively to its universal availability for the last 97 expand access to essential medicine Is there a development that years, it is yet to be widely accessible. like insulin in all regions of the world. particularly excites you in terms of its global impact? Biocon is driven by the belief that What would you categorise as the the pharmaceuticals industry has a biggest biotech success story in Pollution caused by the indiscriminate humanitarian responsibility to enable recent times? use of plastics is one of the greatest access to essential drugs for patients. environmental challenges facing In keeping with this, we have, over the One of the biggest biotech the world today and needs to be last 15 years, delivered 2 billion doses success stories in recent times addressed urgently. of insulin to patients in the developing is the application of Chimeric world on an embedded affordability Antigen Receptor T-cell (CAR-T) Biocon would like to lead the way in platform. immunotherapy in cancer treatment, replacing disposable plastic pens with which is significantly extending reusable pens for insulin products. REWIND 2019

Disposable pens are generally more launched it as ALZUMAb™ in 2013. India has emerged as the third convenient as you do not need to We have licensed the molecule to largest ecosystem for start-ups in load any cartridges, but they cost US-based Equillium for development. the world. We have the potential to more to use and also contribute to a They are now conducting clinical deliver innovation at scale, but the significant amount of medical waste. trials with Itolizumab in the treatment biggest challenge is to fund start-ups of acute Graft-Versus-Host Disease to scale up. Bengaluru has almost When do you believe Biocon (aGVHD), severe asthma and lupus 700 life science start-ups but the will be ready to launch novel nephritis. lack of venture funding and access biologicals? to capital markets is preventing these companies from scaling up. There is a Biocon has already launched two growing trend to establish a presence novel biologics in India, and we BIOCON IS DRIVEN BY in the US to be able to raise funds are working to take our innovative THE BELIEF THAT THE from the highly networked and mature therapies to global markets. PHARMACEUTICALS US market. Consequently, India loses INDUSTRY HAS A out on its innovation quotient. We had embarked on an IP-driven HUMANITARIAN strategy of novel drug development in RESPONSIBILITY TO While the government is doing its bit the early 2000s, when the prevailing by giving the seed capital for start- ENABLE ACCESS TO business ethos of the Indian pharma ups, for the long-term risk capital, industry centred on manufacturing ESSENTIAL DRUGS FOR we are yet to see the emergence of generic medicines. PATIENTS. an ecosystem in India where venture capitalists (VCs) start investing It was a huge scientific risk because in innovation-driven enterprises. I we decided to start our novel Our quest for a game-changing believe this will happen gradually molecules journey with a complex delivery method for insulin led Biocon when a few success stories start entity: a monoclonal antibody. The to clinically validate Insulin Tregopil, emerging. VCs in India today prefer result was Nimotuzumab, which a first-in-class oral insulin molecule. information technology-led start- we introduced as India’s first novel JDRF, a leading US organisation ups, which are of much lower risk indigenously produced monoclonal funding Type 1 diabetes research and more predictable rather than a antibody, BIOMAb EGFR®, in 2006, and advocacy worldwide, has come gestational business-like life tech. targeted at head and neck cancer. forward to support our plans to study Thousands of patients who previously our Tregopil in people with Type 1 Moreover, India still lacks scale in could not afford treatment now had diabetes and trials are scheduled to terms of advanced laboratories, access to a life-saving biologic start soon. supportive infrastructure for scale- therapy at an affordable price point. up and commercialisation, and an What would be your caveats for ecosystem that enables seamless Through Itolizumab, our novel any new entrepreneur keen on transfer of knowledge into practical, anti-CD6 antibody, we were able to setting up an international venture technology-based commercial offer affordable biologic therapy to in India? solutions. psoriasis patients in India when we REWIND 2019 Resilience is the Indian financial service sector’s biggest strength

Kalpana Morparia is Chairman - South and Southeast Asia at J.P. Morgan. In this interview, the banking veteran discusses the recent reforms in the Indian banking sector and her message for female CEOs in the making.

re the banking sector • Non-performing loans (NPL) in help achieve the $5-trillion reforms in India on track for infrastructure and power sectors growth aspiration. a sector turnaround? where India has one of the A world’s worst bad loan ratios. What are some of the recent The introduction of a Bankruptcy • The funding situation of non- innovations in Indian financial Code to help resolve stressed assets banking financial companies services that you feel should make in the banking system and the (NBFC). international investors sit up and announcement of a grand merger of • Capitalisation/operational issues take note? public sector banks (PSBs) to explore with public sector banks. synergies and efficiencies among To me, the key ones will be: PSBs are two big-ticket reforms that While the NPL issue is largely behind • The lead taken by banks and are structural in nature. There are, us, the NBFC situation needs to be fintechs in payments business which however, some issues that need to resolved. The good thing is that this is one of the world’s most cutting be resolved in terms of the pace of is now localised to a few companies edge right now. resolution under NCLT courts and and, incrementally even there, • The IBC reform which has expediting recoveries. While the liquidity availability has improved structurally balanced the power government has injected capital into of late. Also, bond markets in India equation between the borrower and these PSBs, a push to achieve the are very nascent and heavy lifting the lender. merger quickly can help them come on infrastructure build-out is largely • The merger of PSBs to create back and improve credit availability in done via banks. Regulators and the a large bank that can be globally the market. government need to think about competitive and will be easier for measures that can deepen regulators to oversee What are the major strengths of the the market. and manage. Indian financial services sector; and conversely, what are some of Is the credit availability scenario What are some reflections you the problem areas? keeping pace with India's would like to share with future growth agenda? women CEOs in the making? The resilience of the system is the biggest strength. Even as non- India’s credit to GDP ratio is one of We need more women in both middle- performing assets (NPA) have the lowest in the world. We need level and senior management. Future touched double-digit levels and an system credit to expand at a 15 women CEOs will, therefore, need unprecedented liquidity crisis has hit per cent plus rate. Compare this to consciously increase the dialogue us, the system has remained stable. with credit that’s currently growing around the importance of building Retail credit has continued to be at single-digit levels (8-9 per cent an inclusive work environment. They excellent as well. The Reserve Bank currently) despite excess liquidity will need to push women around of India is also playing a significant available in the banking system. Also, them to be ambitious, dream big and role in putting robust systems, credit availability is getting squeezed follow their passion. How they hire processes and controls in place. out towards higher rated corporates diverse talent, develop their skills, and and higher quality retail. Fixing PSBs promote an inclusive environment will Historically, our problem areas and NBFCs can accelerate that and all make a tangible difference to the have been: culture of their organisations. Improving Lives with Technology and Finance

The British Asian Trust believes in using advanced social finance models and technological expertise to achieve long-lasting change for marginalised communities. We have been working in India for over ten years to make improvements in education, anti-trafficking, and livelihoods.

Our highly successful projects within country such as the $11 million education Development Impact Bond that we launched last year, along with our Child Labour Free Jaipur Initiative are testament to our expertise in the development sector in South Asia.

We create powerful cross sector partnerships and measure investments by outcomes to ensure we deliver results for local communities and investors.

Our partners: UBS Optimus Foundation • Michael & Susan Dell Foundation • Tata Trusts UK Department for International Development • BT • John Lewis Foundation • Childline India EdelGive Foundation • Halcrow Foundation • Vera Solutions

Visit: www.britishasiantrust.org Contact: [email protected]

BAT19_UK-India-ad-203x266-v1-5.indd 1 10/05/2019 18:15 EXPERT VIEW

Rolling out an innovative recycling landscape

by Neeraj Kanwar

An executive of a leading tyre manufacturing company plugs for a combination of sustainability and stakeholder-centric models to future proof companies.

hen over 3,000 business consumption, and that means smaller and political leaders fuel bills and lower CO2 emissions. convene in Davos next Highlights Moreover, low rolling resistance Wmonth, they will acknowledge the reduces pollution as fewer residue fact that we need to change the • Innovative approaches to particles are dispersed into the air. way we do business. There will developing sustainable tyres be a concerted call to embrace are essential to really drive With car ownership increasing in ‘sustainable development’ and down emissions from the countries such as India and China, a renewed effort to look at motor industry. it is becoming ever more urgent to ‘stakeholder capitalism’. find green solutions. Various tyre • Disused tyres pose a huge manufacturers in the sector are It is a well-known fact that almost environmental challenge. looking at developing alternative a quarter of Europe’s greenhouse materials to traditional rubber. This is gas emissions are generated by the • The tyre industry has been to address the issue of deforestation. transportation sector. Electric cars looking at and experimenting One such experiment that we are trumpeted as the panacea to with innovative use and conducted had used dandelion this challenge but alone, this is not recycling of old tyres for latex to manufacture tyres. enough. Innovative approaches to sustainability. developing sustainable tyres, such However, investing in R&D alone as low rolling resistance tyres, is not enough. Disused tyres are a alternative materials to rubber Speaking about sustainability, the big environmental challenge. Many and reusing and recycling tyres, tyre industry is constantly looking at countries such as the UK send over are essential to really drive down new ways to address climate change. 500,000 disused tyres to destinations emissions from themotor industry. At Apollo Tyres, we have developed in the Middle East and Asia each a range of tyres that offer low rolling year. However, this is unsustainable. resistance. These help to reduce fuel

62 December 2019 EXPERT VIEW

WE OPERATE PROGRAMMES THAT ADDRESS HEALTHCARE NEEDS FOR TRUCK DRIVERS – WHO ARE OUR KEY STAKEHOLDERS – LIVELIHOOD SUPPORT AND EMPOWERMENT FOR UNDERPRIVILEGED WOMEN IN LOCAL COMMUNITIES.

HIV/AIDS, vision care, and general treatment facility. Since the launch of our healthcare initiatives, we have reached out to more than 5 million people via our health services. In addition, the company continues to provide healthcare facilities by conducting regular health camps and specialised cancer screening camps for around 500 families of rubber tappers.

Addressing inequality also concerns gender inequality. Here, I am talking about inequality of opportunity. Many doors are shut to women, especially when it comes to empowerment. Smart businesses invest in empowering women to create strong communities. Apollo Tyres One landfill site in Kuwait, with more fabric and they have an important offers livelihood and empowerment than seven million tyres, is so large role to play here. programmes to women from that it can be seen from space! communities near its plants. We have We cannot ignore this civil unrest; reached out to over 11,000 women The industry has been looking at we cannot neglect our stakeholders. through our women empowerment and experimenting with innovative Business leaders need to rethink programme. We are the first company use and recycling of old tyres for what they mean by value – especially in India to provide training in sheet sustainability. In England, old tyres – stakeholder value. Any company rubber grading for women in an that would otherwise end up in landfill that is future proof must have otherwise male-dominated sector. We – are being tested as a potential road sustainability hardwired into its also plan to replicate this successful surface material by Highways England business strategy. I believe the way model near our other plants. on a stretch of the M1. This proves forward is stakeholder capitalism. that we can find ways to reduce While we are committed to waste. Recycled tyre material is being Caring for society has always been a stakeholder engagement and building put to so many good uses, including core value at Apollo Tyres. Forward- cohesive communities, we are also sports surfaces, running tracks and thinking companies offer several investing to combat climate change pitches, children’s playground safety initiatives including health services in our day-to-day operations. Our mats, drainage systems etc. to key stakeholders and investing flagship programme ‘Afforestation in local communities. We operate Project’ – the planting 3,50,000 trees While we look at ways to protect the programmes that address healthcare in Tamil Nadu – helps control carbon environment, we also need to chart needs for truck drivers – who are our emissions and generates livelihood a plan to build an equal society. key stakeholders – livelihood support for farmers in water-starved areas of Increasing inequality today has led to and empowerment for underprivileged the country. many protests across the world. women in local communities. To survive and thrive as a company in In Chile, small protests about Truckers obviously spend a lot of the years to come, it is essential that transport costs grew into a broad- their time on the road. This lifestyle we put stakeholders and sustainability based movement protesting about is not conducive for a settled, at the heart of our business. inequality. In France, the “Yellow married life and they often end up Vests” movement grabbed headlines contracting HIV and worse. We a year ago over gas prices and established 31 healthcare centres transformed into a broader social and in the transportation hubs spanning Neeraj Kawar is the Managing violent protest. Businesses are an 19 Indian states offering healthcare Director of Apollo Tyres. integral part of our socio-economic services including prevention of www.indiaincgroup.com December 2019 63 THE SMALL PRINT The year that was – Start-up Report Card 2019 THEby Dr Param Shah SMALL PRINT With the rise of seven unicorns in 2019 and 54 more expected in the next five years, the Indian start-up ecosystem is reflecting a steady upward graph.

ndia is considered to be among On average, it was noticed that four the top five start-up ecosystems start-up deals had been announced in the world. It is expected to Highlights in a day throughout the year 2018. Ihave a year-on-year growth rate of Such great work is only possible almost 10-12 per cent. During the • Indian start-ups received due to the ease of funding. Angel THE SMALLpast few years, the Indian start- over $4.4 billion in total investments are said to be on the PRINT up ecosystem has bounced and funding from January to rise. As compared to 2018, there is attracted significant interest and September 2019. an increase of 20 per cent for active attention. This development has • 2019 also saw a rising trend investors in 2019. taken place due to factors such as of several big corporate consolidation activities, massive houses investing their Modern-day organisations are funding, development of technology surplus funds for investment identifying the disruptive potential of coupled up with a burgeoning in start-ups. the Indian start-up ecosystem and domestic market. 2019 saw over are partnering/investing in several 1,300 start-ups added, taking the tally • With the ease of resource start-ups to get manifold returns for to over 8,900 start-ups. The rise in availability and proximity to their investments in such start-ups. the number of start-ups, ranging from the market, India is expected According to the KPMG 2018 CEO almost 3,000 ventures in 2014 to the to have almost 54 tech Survey, it was reported that almost current number, will help to surpass unicorns by the year 2024. 45 per cent of the CEOs who were the projection of almost 11,000 by the surveyed stated their organisations end of 2020. to be extremely capable of receiving any business. There was a major financial beneficial by investing THE SMALL PRINTAs per the data compiled by DPIIT, dearth of capital to fund start-ups in start-ups. India has over 300 incubators and during the initial stages of the process accelerators managed by academic of developing an entrepreneurial Major deals institutes, corporates, private players ecosystem. But with the passage of Looking into the details of the major and the government. Majority of these time and different funding options deals, several big corporate houses incubators are supported by Central being made available, finance is not a are investing their surplus funds and State governments through major concern for entrepreneurs and or even keeping aside funds for capital and operational grants under start-ups. Almost $4 billion had been investment in start-ups which they several schemes. This enabling pumped into 1,040 ventures during think are likely to be beneficial for environment has resulted in the the year 2017-18. Around $4.4 billion them. Wipro has a $100-million fund growth of start-ups not just in Tier 1 was the total funding amount received which it has set aside to invest in cities but also in Tier 2 cities in India. by the start-ups from January to IT-based start-ups. IBM is teaming up September 2019. This shows a and joining hands with 100 Indian big Funding for Indian start-ups positive uptrend in the funding data and other IoT start-ups. Apple Funds and finance are what drives for start-ups. recently acquired Tuplejump, an AI-an THE SMALL64 December 2019 PRINT THE SMALL PRINT

THE INDIVIDUALS WHO WERE EARLIER ENTREPRENEURS ARE NOW TURNING INTO INVESTORS TO BRING IN MORE MATURITY TO THE INDIAN START-UP ECOSYSTEM.

AI-based start-up that is based assistance, thus creating a strong the market, the country is expected to in Hyderabad. base for the potential unicorns. have almost 54 tech unicorns by the year 2024. The proactive actions of the A growing pool of start-ups having academia, local communities and sufficient resources available at Major trends state governments are major drivers their disposal to gain market share The individuals who were earlier for the growth of such new start-up confirms that the years 2018 and 2019 entrepreneurs are now turning into hubs. Cities such as Delhi-NCR, were not an exception in terms of investors to bring in more maturity Bangalore and Mumbai are the several start-ups becoming unicorns. to the Indian start-up ecosystem. launchpads for almost 55-58 per cent Possessing a stint as entrepreneurs of the start-ups. Bangalore has the A booming pool of experienced earlier, they act as more capable largest share of start-ups of almost personnel combined with the mentors for the new entrepreneurs 24 per cent, followed by Delhi-NCR country’s unique parallel start-up in comparison to the other angels having around 20 per cent and ecosystem is a primary factor to and investors. This can be one of the Mumbai having approximately 15 per support the continuous growth of the important factors for almost 54 new cent. The remaining 40 per cent are Indian start-up ecosystem. unicorns to be born in the coming five spread in different parts of years. The future of the Indian start- the country. 2019 has seen the rise of seven up ecosystem is shining bright. new unicorns till now. The Indian New unicorns on the block unicorn club has companies from Dr Param Shah is Director – The investments were better supply chain and logistics, enterprise, UK at the Federation of Indian distributed across the year 2019 gaming, e-mobility, e-commerce, and Chambers of Commerce & as compared to the previous year. mobility. The latest entrants of the Industry (FICCI). They were scattered across different unicorn club are BigBasket, Dream sections of the start-up ecosystem. 11, Druva, Delhivery, Rivigo and Ola *Disclaimer: The views expressed herein This led to a significant increase in Electric. With great potential in the constitute the sole prerogative of the author. They neither imply nor suggest the orientation, the total number of start-ups having Indian ecosystem in terms of ease of views, current thinking or position of FICCI. more than $50 million as funding resource availability and proximity to FICCI is not responsible for the accuracy of any of the information supplied by the author. www.indiaincgroup.com December 2019 65 BIRD’S EYE VIEW India-UK counter-terrorism cooperation: Convergences and challenges by Rahul Roy-Chaudhury A strategic expert emphasises that steady cooperation on counter-terrorism could be the key to a successful bilateral strategic partnership between the UK and India.

bring the perpetrators of the 2008 Mumbai terror attack to Highlights justice. During Modi’s visit to • Continued cooperation the UK for the Commonwealth on counter-terrorism Summit in 2018, Prime remains a key area Ministers Modi and Theresa May “agreed to strengthen of collaboration for cooperation to take decisive a stronger UK-India and concerted actions against strategic partnership. globally-proscribed terrorists • Both UK and India and terror entities to protect have reiterated their our citizens, including LeT, call for Pakistan to Jaish-e-Mohammad (JeM), Hizb-ul-Mujahideen, Haqqani bring the perpetrators Network, Al-Qaeda, ISIS of the 2008 Mumbai (Da’esh) and their affiliates, terror attack to justice. as well as tackling the online • India and the UK radicalisation and violent also participate in the extremism which feeds this”. ‘No Money for Terror’ At the 13th meeting of the Ministerial Conference. India-UK JWG on Counter- • A regular exchange Terrorism in London on 25-26 of information, mutual November 2019, both sides ooperation on counter-terrorism is an reiterated their commitment important, but little-known, aspect of capacity-building efforts, sharing of to work together to tackle the India-UK security relationship. This terrorism in all its forms. Cwas formally institutionalised in 2002 with the best practices and This included countering technologies, mutual establishment of their foreign ministry-led Joint radicalisation and violent legal assistance would Working Group (JWG) on Terrorism. Continued extremism, combating the go a long way to further and more sustained cooperation on counter- financing of terrorism and bilateral defence ties. terrorism will remain key to a meaningful preventing the use of the bilateral strategic partnership. internet for terrorist purposes. the UK, the new Defence Both countries have a strong shared interest and International Security Multilateral approaches in preventing terror attacks on their mainland, Partnership (DISP) for the In a significant development, having suffered such attacks in the recent past. first time explicitly named the UK, along with the US The deadliest single terror act on British soil the Lashkar-e-Taiba (LeT) and France, co-sponsored took place in London on 7 July 2005; one of (responsible for the November a resolution in the UN in the most devastating terror attacks in India took 2008 Mumbai terror attacks) May 2019 to successfully place in Mumbai on 26-28 November 2008. and the Haqqani network declare the leader of the With the Indian government now perceiving (responsible for the July Pakistan-based JeM terror terrorism as the single biggest threat to peace, 2008 suicide bombing of the organisation, Masood Azhar, security and development, counter-terrorism Indian embassy in Kabul), as a “global terrorist” by the has emerged as one of Prime Minister Modi’s along with ISIL, al-Qaeda, ISIL and al-Qaeda Sanctions top priorities for bilateral and multilateral and Hizb-ul-Mujahideen in (1267) Committee of the UN cooperation. the context of disrupting their Security Council. China had financial and tactical support. blocked four previous attempts Bilateral cooperation Both countries also reiterated by the sanctions committee to In November 2015, during Modi’s visit to their call for Pakistan to blacklist Azhar.

66 December 2019 BIRD’S EYE VIEW

WITH THE INDIAN GOVERNMENT NOW PERCEIVING TERRORISM AS THE SINGLE BIGGEST THREAT TO PEACE, SECURITY AND DEVELOPMENT, COUNTER-TERRORISM HAS EMERGED AS ONE OF INDIAN PRIME MINISTER MODI’S TOP PRIORITIES FOR BILATERAL AND MULTILATERAL COOPERATION.

the LeT, in terror attacks in India. The UK acknowledges that ISI has had a role in supporting and funding the LeT and the JeM but is not able to find evidence to directly blame the ISI.

Opportunities for convergences Nonetheless, there remain significant opportunities to develop and deepen India-UK bilateral and multilateral counter-terrorism cooperation and collaboration for mutual benefit. It is a pity that the much-publicised and policy-relevant June 2019 report by the Foreign Affairs Committee of the UK parliament titled ‘Building Bridges: Reawakening UK-India Ties’ did not explore avenues for such potential collaboration.

Another critical aspect of India’s organisation in 2001, was lifted. These could include a regular multilateral approach towards counter- During Modi’s April 2018 visit to the exchange of information, mutual terrorism is its focus on preventing UK, anti-India Sikh and Kashmiri capacity-building efforts, sharing financing for terrorist organisations. separatist protestors tore the Indian of best practices and technologies, Both India and the UK are members flag in London’s Parliament Square; mutual legal assistance and working of the 39-member international terror and in August 2018, the US and through the UN. There should financing watchdog, the Financial Canada-based Sikhs for Justice (SFJ) also be ‘actionable’ exchanges of Action Task Force (FATF). In January – seeking a referendum next year intelligence related to terror acts, 2018, the UK and the US, followed by for the establishment of Khalistan, money laundering and related Germany and France, co-sponsored an independent Sikh state – held crimes and terrorism financing. a letter to the FATF nominating a large demonstration. The violent Terrorist groups such as the Dawood Pakistan to the Grey List of the FATF. anti-India demonstrators outside the company, led by Dawood Ibrahim, In October 2019, the FATF retained Indian High Commission in London the mastermind of the 1993 Mumbai Pakistan in the Grey List while on 15 August and 3 September 2019 bombings, should be formally named expressing “serious concerns” with comprised several pro-Khalistan in future joint statements. There its lack of progress addressing terror groups, protesting India’s 5 August could be discussion on India’s focus financing risks. 2019 decision on Kashmir. The Indian on ‘de-radicalisation’ (in contrast to government continues to seek the the UK’s ‘counter-radicalisation’) in India and the UK also participate in extradition of select British Sikh relation to religious extremism, as the ‘No Money for Terror’ Ministerial activists charged with terror attacks well as an emphasis on countering Conference, seeking to promote in India. The danger is that these the financing of radicalisation and international and regional cooperation developments could lead or on-line radicalisation. Finally, a curb and improve capacity to combat the be supportive of a terror attack in on pro-Khalistani activities in the financing of terrorism. For the first India as well as the emergence of UK will continue to be a key factor time, India will be hosting its third sectarian strife within the British in strengthening bilateral counter- Ministerial Conference in 2020. Indian community. terrorism partnership.

Differing perspectives India and the UK also differ over India is concerned over the rise of official Pakistani complicity in Rahul Roy-Chaudhury is Sikh radicalisation and pro-Khalistani terrorism. India blames the Pakistan Senior Fellow for South extremism among a small minority army’s powerful Inter-Services of the British Sikh community in the Intelligence (ISI) Directorate for Asia at The International UK. In March 2016, the ban on the planning and coordinating the 2008 Institute for Strategic International Sikh Youth Federation Mumbai terror attacks, alongside the Studies (IISS), London. (ISYF), proscribed as a terrorist actions of their ‘proxies’, the JeM and www.indiaincgroup.com December 2019 67 68 December 2019 REGION FOCUS Sunrise in the East by Arnab Mitra

Highlights • Indian giants like Tata Steel, JSPL, Reliance Industries, the Adani Group, National Thermal Power Corporation, Tata Consultancy Services and Vedanta have invested in Orissa.

• Its high economic growth, wide-ranging fiscal and policy incentives, skilled labour pool and geographic location make it a favourable destination for investors.

• Odisha has also legislated a single-window clearance mechanism for providing time- bound industrial clearances and approvals.

ata Steel is arguably India’s have invested in the state. The list of most famous steel company. major investors in Odisha includes And it is most notably Reliance Industries, the Adani Group, Tassociated with Jamshedpur, where National Thermal Power Corporation its more than a century old plant is (NTPC), Tata Consultancy Services located. So, when it decided to set up (TCS), Vedanta, JSPL among others. a second plant in Odisha, off the east coast of India, people sat up and took Rich in minerals Odisha, which produces notice. Now, with the 3 million tonnes Odisha (earlier Orissa), located on per annum first phase completed the east coast of India, is very rich in about a third of India’s and in production, the company minerals and natural wealth. Several mineral output, has has embarked on an expansion important and valuable minerals such leveraged its immense programme to expand its capacity to as iron ore, coal, bauxite, dolomite, 8 million tonnes per annum at a cost nickel, tin ore, chromite, manganese, natural wealth to lay out the of more than $3.3 billion. decorative stones, limestone, red carpet for industry, and graphite, beach sand, China clay, etc., has leapfrogged ahead of That isn’t all. Tata Steel BSL, which are found in the state. In fact, Odisha the Tata Group recently acquired accounts for about a third of total many others. from India’s bankruptcy court, is mineral production in India in constructing a mill in Dhenkanal in value terms. Odisha. Furthermore, the Jindals have two steel plants in the state The state has more than 55 per cent and Essar Steel, which was recently of the country’s bauxite reserves, acquired by Arcelor Mittal, also has a making it a suitable location for pellet plant in the state. aluminium companies and aluminium- based industries. It ranks first both in And it’s not only steel companies that terms of production capacity as well www.indiaincgroup.com December 2019 69 REGION FOCUS as the actual production of the metal. Policy, fiscal incentives and The state government has It is also among the country’s leading initiatives been undertaking various producers of iron and has emerged, • The state offers a wide range of infrastructural projects to boost over the last couple of decades, as a fiscal and policy incentives for the infrastructure of the state. favoured destination for iron and businesses under the Industrial • According to the state budget steel companies. Policy Resolution, 2015. for 2018-19, $811.24 million • Additionally, the state has sector- had been allocated for railway Main advantages specific policies for IT and micro, infrastructure development. There are other reasons for the small and medium enterprises. state’s rising attractiveness to Gateway to ASEAN domestic and global investors. Its location on the east coast of India Under Naveen Patnaik, who is and the presence of Paradip port, India’s longest-serving current Chief Gopalpur port and Dhamra port in the Minister, Odisha had been the first state make it an ideal springboard for state to legislate a single-window trade with the ASEAN. clearance mechanism for industrial clearances. The state established this Attracting investments window in pursuance of the Odisha The state has received or has Industries (Facilitation) Act 2004 for ongoing projects with investments providing time-bound clearances and of about $60 billion. Besides the approvals. It also created an online Tata projects, these include large Combined Application Form (CAF) investments by the Aditya Birla Group, which all departments/authorities Haldia Petrochemicals, SAIL and are mandated to accept for various several mining projects by public and clearances and approvals. private sector companies.

The state has also put in place an Easing the process effective mechanism for industrial The state government has embarked promotion and investment facilitation. on a mission to simplify processes A three-tier single window clearance and expedite project approvals. In mechanism to facilitate speedy line with the thinking of the Central implementation of industrial projects ODISHA ACCOUNTS government, the state is leveraging is in place. The Chief Minister, the FOR ABOUT A THIRD technology to complement the highest political authority in the state, OF TOTAL MINERAL governance framework. The approvals and the Chief Secretary, the state’s PRODUCTION IN INDIA and clearances for the establishment top-ranked bureaucrat, personally IN VALUE TERMS. and operations of the industries are chair the committees mandated to being moved to an online portal with supervise the process to ensure that minimum human interface. any slack is immediately cut. • The state government has As a result of these initiatives, Odisha The state has other advantages as constituted ‘Team Odisha’ to help has consistently ranked high in India’s well. They include: with investment promotion. internal Ease of Doing Business • Odisha is amongst the top 10 Index. The state government has High economic growth states accounting for the highest come out with a document called • The state’s GSDP grew at a number of MSMEs. Vision 2022 to articulate its vision for compounded annual growth • It has vast potential for the state on various parameters. On rate (CAGR) of 10.30 per cent development of tourism – one industrial development, the Vision between 2011- 12 and 2017-18. of the critical sectors of the 2022 document says the government • The tertiary sector was the major state’s economy in terms of will “develop industrial parks with contributor to the state’s GSDP foreign exchange earnings as quality infrastructure, to encourage with a contribution of 45.25 per well as employment generation micro-enterprises as ancillaries cent during 2017-18. opportunities. In 2017, 1.4 million and to pave the way for cost and domestic tourists and more than technology orientation by encouraging Rich labour pool 100,000 foreign tourists visited competition”. And on infrastructure, • The state has a literacy rate of Odisha. its aim is to “improve connectivity by 72.87 per cent, in line with the increasing road and rail density and national average. Facilitating infrastructure to improve passenger services and • The state also has a large pool of • Odisha has up-to-date it will endeavour to provide universal semi-skilled and unskilled labour. social, physical and access to power, irrigation and to industrial infrastructure. improve urban infrastructure as well”.

70 December 2019 SOCIAL IMPACT FOCUS Tackling the safe drinking water crisis by Poonam Sewak

Safe Water Network’s initiatives are giving a fighting chance to communities dealing with a scarcity of clean drinking water while generating livelihoods.

ependable supply of safe meeting their basic hygiene and food drinking water is imperative needs. The rest is used for non- for the growth of Indian potable domestic and other purposes. Deconomy. India faces its severest Highlights This indicates that for most of the water crisis due to climate change, non-potable uses, a quality lower • 21 cities in India are predicted surface water contamination and than drinking water is required. Thus, excessive exploitation of groundwater. to run out of groundwater by water must be treated and supplied It is predicted that at least 21 cities 2020, affecting around 100 according to usage for economic in India will run out of groundwater million people, according to efficiency and environmental by 2020, affecting around 100 million a report by NITI Aayog. sustainability. people and 40 per cent of India's population will have no access to • Safe Water Network aims to Annually, about 37.7 million Indians drinking water by 2030, according promote a safe drinking water are affected by waterborne diseases, to a report by NITI Aayog. Scarcity model and provide technical 1.5 million children die of diarrhoea of water will disrupt the region’s assistance to other NGOs and and 73 million working days are lost stability, hamper economic prosperity the government to scale it. leading to an economic burden of and destroy ecosystems and local $600 million a year. An additional ecology. To continue on the economic • Safe Water Network has been problem arising out of this shortage growth trajectory, India needs to working with communities is that women of the community are urgently strive for water availability, in Ghana and India to being burdened with the responsibility accessibility and quality. Water promote Water ATMs - water of water collection, for which they management needs to be judicious dispensing kiosks operated need to walk for miles every day and improved so that we have enough and maintained by social or wait for water tankers leading to water for our farms, firms and families. entrepreneurs which give loss of economic opportunity. India communities access to 24x7 ranks a dismal 108th out of 149 According to the World Health affordable, safe drinking water. countries in gender employment. It is Organization, each individual requires estimated that women contribute only about 25 litres of water daily for 17 per cent to the countries’ GDP as www.indiaincgroup.com December 2019 71 SOCIAL IMPACT FOCUS

IT IS LOGICAL TO MAKE SAFE DRINKING WATER AVAILABLE THROUGH ‘WATER ATMS’ OR ANY TIME WATER DISPENSING KIOSKS OPERATED AND MAINTAINED BY SOCIAL ENTREPRENEURS THROUGH WHICH COMMUNITY MEMBERS HAVE ACCESS TO 24X7 AFFORDABLE, SAFE DRINKING WATER. compared to a global average of 37 per cent. It is interesting to note that 80 per cent of water is collected by the women in households that do not have access to drinking water in their premises, and globally, women spend over 200 million hours collecting water every day.

Although the government has allocated a budget of $70.4 billion (Rs 500,000 crore) to provide piped water to every home by 2030, we need immediate, cost-effective solutions so that we do not lose a generation waiting for water from for large infrastructure projects. Thousands of social entrepreneurs have thus surfaced to develop solutions to solve the water crisis.

It is logical to make safe drinking water available through ‘Water ATMs’ or Any Time Water dispensing kiosks operated and maintained by social entrepreneurs through which community members have access to 24x7 affordable, safe drinking water. These automated Water ATMs its vicinity. It has brought safe water the infrastructure – land, raw water dispense water through a coin or a access to over a million people and source and electricity – the private pre-paid smart card, for Rs 5/20L has generated about 800 livelihoods sector provides philanthropic grants in containers that consumers bring, of which 23 per cent are women for one-time capital expenditure for thus preventing plastic scourge. This entrepreneurs or operators. setting up the water purification kiosk, alternate solution can provide safe the NGO trains social entrepreneurs drinking at a fraction of the cost. In the last decade, Safe Water and monitors the program and Network has developed Standard consumers that buy water. The Safe Water Network has been Operating Procedures (SOPs) for revenues from the water sale pay working with communities in setting up these kiosks, training and for the operating cost of electricity, Ghana and India since a decade to capacity building program for water consumables, operator salary and promote this social enterprise, safe entrepreneurship development, entrepreneur return. Thus, the drinking water model and provide deploying internet of things and digital community gets safe drinking water technical assistance to other NGOs platform for training and monitoring. In for five years. Through this social and government to scale it. These a sector that suffers from 66 per cent innovative model, we can deliver decentralised kiosks sustainably failure rate of defunct or sub-optimally safe affordable drinking water to a provide access to affordable, reliable performing safe water kiosks, Safe million more communities to improve drinking water to communities to Water Network is able to provide public health, bring gender parity and improve public health and generate sustainable 24x7 water for five years combat climate change. livelihoods. They have also helped with less than 2 per cent downtime reduce women’s drudgery and to communities. provide for water security. Each Poonam Sewak is Vice water kiosk equipped with a water This program is a successful example treatment plant provides safe drinking of a Public-Private partnership as President, Knowledge and water complying to national water it is the collective responsibility of Partnerships at Safe Water quality standards and services about all stakeholders to ensure drinking Network India. 3,000-5,000 residents living within water to all. The government provides

72 December 2019 POLICY FOCUS

The approach to foreign trade policy needs to change by India Inc. Staff

The High Level Advisory Group recommends several different avenues ranging from engaging the WTO to more sector-specific approaches to boost India’s share and importance in the global merchandise and services trade.

his report on India’s trade were mentioned, and in order of recognised this reality and have prospects and policies importance: engaged in lowering taxes and is a constructive plea to - An old, unsuited and un-reformed regulatory controls. India has been Tpolicymakers of what needs to be mind-set slow to adapt. This needs to be done, what is necessary (and possibly - Extreme regulatory controls recognised; and recognition of the sufficient) to accelerate India’s export - Labour laws in need of urgent underlying causes will help us growth, and thereby accelerate GDP reform to improve. growth towards a potential of 8+ per - High effective corporate tax rates annum over the next 11 years. - High cost of capital India and WTO None of the above five determinants India should use WTO as part Macro determinants of export have really changed in the last twenty of its overall strategic vision on performance years, yet India’s performance has growth and interaction with the What are the prime causes for appreciably worsened. This is likely international economy. The following India’s poor performance in trade because the world has become a recommendations were made for when compared to other countries? lot more competitive and inherited the same: In HLAG’s deliberations with comparative advantage is no longer - There should be a balance government officials, industry, and in the nature of low-hanging fruit. between issue specific approach academics, the following causes Countries around the world have and coalition building. www.indiaincgroup.com December 2019 73 POLICY FOCUS

- Market access negotiations need to go deeper than simple tariff negotiations. Aspiration to board regional value chains should determine the development of rest of the ecosystems between the trade partners. - A comprehensive yet selective and inclusive approach aiming India’s interest in the long-term is required. - While negotiating market access for goods in FTAs, India should focus on both tariffs and nontariff barriers in the partner countries. - There is a need to establish an institutional mechanism for seeking inputs from stakeholders prior to finalising an FTA, as well as informing the industry well in time about any steps that they would like to take during the period of transition with the aim of minimising their adjustment costs. Further, the Government needs to undertake comprehensive - We need to domestically prepare China’s Economic Policies – outreach programs for explaining for the ongoing changes in the India should actively participate the opportunities for exports, international trade regimes and engage in the discussion/ particularly to MSMEs, in the occurring through FTAs, negotiation on subsidies, and markets of FTA countries. irrespective of whether we on state-owned enterprises. - The medium and small sector are directly participating in Regarding Intellectual Property should be the focus of such the negotiations. Rights, India should keep a advocacy program. - India should consider pluri- watchful eye on developments. lateral initiatives on a case by The US-China trade war: Impact on India and its policy choices case basis, taking account of INDIA SHOULD USE Doubling of exports in six to seven the relevant objectives, and the WTO AS PART OF ITS conditions and flexibilities that will years is a challenging target. This OVERALL STRATEGIC allow the process to raises the question of whether there move forward. VISION ON GROWTH are unexplored strategic opportunities - As for e-commerce, India AND INTERACTION WITH in the current global trade situation, should participate, but more for THE INTERNATIONAL including in the looming US-China information gathering and raising ECONOMY. trade war, which can help India either concerns. The second option is achieve these targets or at least to not participate but prepare for ensure that there are no significant changes that are going to arise in India and FTAs reversals on the path to the regulatory operational context A perception has grown in India that achieving them. due to FTAs and pluri-laterals, Regional Trade Agreements (or FTAs) and to stay connected with these have not benefitted India and trade India needs to give high priority to markets and developments. partners have grown at our cost. This undertaking quantitative, rigorous, - Investment Facilitation – India needs to be tackled urgently. Several computational, model-based research should examine the possibility actions are required to pursue gains on strategic trade policy, including of participation if this can lead from FTAs: studying the impact of participation in to an agreement which affirms - In order to expand markets, plurilateral trade agreements. what is domestically being done selection of appropriate trade and such participation also helps partners is of critical value. Long A knee-jerk approach on tariffs may India seek additional objectives in term economic interest should not be the soundest one to pursue other areas of interest in WTO. drive the selection of a trade without greater examination if India - Trilateral Initiative to Address partner. faces greater tariffs. It would not be sensible for India to raise tariffs in a POLICY FOCUS

INDIA NEEDS TO GIVE HIGH PRIORITY TO UNDERTAKING QUANTITATIVE, RIGOROUS, COMPUTATIONAL, MODEL-BASED RESEARCH ON STRATEGIC TRADE POLICY, INCLUDING STUDYING THE IMPACT OF PARTICIPATION IN PLURILATERAL TRADE AGREEMENTS.

US-China trade war. In fact, reducing India Campaign, will help actively services exports. Some options own tariffs would be a wiser step. promote India’s image as an going forward include getting MVT hub. an opinion of a retired Supreme Exports – sectoral reality and - Tourism Services: India seriously Court judge or design of the suggested policy for services lags behind other developing Elephant Bonds Scheme outside exports countries of similar or lower the publicly available contents of - Education Services: Education tourism potential in foreign the affidavit. services hold immense potential, tourist arrivals. Reforms to provided the Government is able enhance the personal security EXIM credit and insurance to address the critical issue of of tourists, upgradation of reforms quality and improving regulatory tourism infrastructure, lowering Most countries have established Exim transparency. While amongst the of tax rates to encourage Banks (or Export Credit Agencies developing countries India is a investment, enhancing business (ECAs) that play a catalytic role in major hub of foreign students, operational and hospitality skills promoting the country’s international further policy support could make in rural areas, and improving trade, addressing transactions at the India the global hub of education the research base in analysing margin that standard commercial service providers. tourism data are needed. banks cannot or will not support due - Health Services: The healthcare - Policy Recommendations for to long tenor/risk perception. sector is expanding rapidly in Financial Services: Today, India. This sector is predominantly technology, KYC and international In order to strengthen the Exim Bank privatised with almost 75 to co-ordination can help alleviate of India to cope with the increasing 80 per cent of hospitals being concerns on various issues needs of Indian exporters and managed by the private sector. related to tax evasion, black support India’s stagnant exports, and This sector is expected to grow money and round-tripping and noting the best practices of similar at a CAGR of 15 per cent and make it possible to implement institutions in other countries, the will reach around $280 billion simple and open policies for following recommendations are made: by 2020. India must consider financial services. Such financial 1. The capital base of the Exim Bank significantly simplifying the services policies are imperative needs to be enhanced. process of applying for a medical to make India one of the most 2. The Bank’s borrowing limit is visa, if it is to realise its potential transparent and open financial pegged to 10 times its Net Owned as a Medical Value Travel (MVT) markets in the world, improve Funds. The limit may be enhanced hub. Creating a Medical Tourism the Ease of Doing Business, and to 20x with suitable Board level Campaign, within the Make in provide an impetus to financial safeguards, if necessary. POLICY FOCUS

i. Pharmaceuticals In order to boost India’s flourishing pharmaceutical industry, the following recommendations are made: 1. Restructure the regulatory mechanism for the pharmaceutical industry by creating a central FDA-like institution 2. The Department of Pharmaceuticals (DoP) must be repurposed to support growth of the industry and may be appropriately placed under another Ministry. 3. India should become a member of Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme (PIC/S). 3. The prudential limits for Single any impetus to international trade 4. Increase the number of drug Borrower and Borrower Group are should be framed around these inspectors by allowing third party prescribed by the RBI exactly as for approaches. Further, our policy focus certification through NABCB banks, even though the Exim Bank as must shift to creating a conducive accredited agencies, and bolster a niche institution must necessarily ecosystem around selected value support to inspectors. have a higher degree of concentration chains. of exposures. The setting of such ii. Biotechnology limits may be left to the Board of Exim Expanding supply of skilled To further boost the industry, the Bank, which includes GOI and manpower and R&D expansion following recommendations are made: RBI Directors. Skilled Manpower: In some 1. Restructure the current regulatory 4. It is recommended that GOI should technology-intensive sectors, mechanism by creating a central establish support to Exim Bank for including biotechnology, FDA-like institution, empowered to facilitating acquisition/creation of pharmaceuticals and medical oversee the biotechnology industry. assets of strategic importance to the devices, the country needs to expand 2. Appoint an empowered country, particularly for addressing its talent pool. There is also a need independent commission on biotech the energy security. to create stronger industry-academia that reports directly to a high-level linkages. functionary within the Government. Merchandise exports in need of 3. Streamline RCGM and Genetic comprehensive reform R&D: It is extremely crucial to Engineering Appraisal Committee It is strongly believed that in view of stimulate research and development (GEAC) to expedite drug approvals. the emerging global and domestic efforts for climbing up the value chain challenges, the approach to foreign in exports. With this objective, the iii. Textiles and clothing trade policy needs to change Government should retain the current These recommendations are made significantly. India’s gains from 150 per cent tax credit on R&D and to achieve India’s export targets and international trade can come in increase it to 200 per cent for long- boost the textile and clothing sector: two ways. Firstly, from its strength term projects. In addition, selected 1. To enhance scale across the in the traditional labour-intensive outsourced R&D should to be eligible textiles and clothing value chain sectors, where the focus should for the credit as well. Further, R&D and promote consolidation of firms, be on employment creation and tax benefits should be extended the Government should introduce a raising productivity and product and to Limited Liability Partnerships. limited-period investment allowance market diversification; and secondly, Product development should also be across the value chain. from its strength in Information considered as a form of R&D. 2. Focus efforts to attract top 10 and Communication Technology global textiles and clothing companies (ICT) services, focus on Research Sectoral analysis and (including those from China) to set up and Development, Science and recommendations large-scale plants in India. Technology and human resource The HLAG analysed just a few 3. In order that high costs do not endowment, where the focus should sectors in detail for identifying hinder access to high quality be continuous skill transformation, the sector-specific constraints machinery for Indian textiles and increased investments in R&D, impeding our exports and making apparel companies, implement the adoption and promotion of high recommendations for overcoming Amended Technology Upgradation technology and innovation. Therefore, them. Fund Scheme (ATUFS). Further, the

76 December 2019 POLICY FOCUS

specifically addressing the nuances of the medical device industry. 3. Peg Indian standards to global standards.

vi. Data-driven approach to exports International trade is an important source of livelihood for nations. Hence it is important to anticipate and develop early signals and insight on various changes in the International trade which potentially can affect India’s trade. Quantified decision making is a key factor in this understanding. Data to solve problems in trade is the need of the hour and would help to work out a structure or a plan defining the road ahead.

Constituting an apex committee for quick investment decisions Due to various macroeconomic factors such as rising costs of production in China and US-China Export Promotion Capital Goods 3. Shift of focus from volume-based trade war, many MNCs are looking (EPCG) scheme should be converted manufacturing to value-based for new investment destinations into a general scheme for textiles and manufacturing is extremely important. and there is strong competition for clothing as a whole, providing duty 4. Tax Holiday for a considerable footloose FDI. To take advantage free access to the machinery. period (under Indian tax laws) to of this window of opportunity, India 4. With increasing labour costs in incentivize investment by domestic as needs to have quick decision- China and newly-imposed tariffs on well as foreign enterprises in making capacity for identifying the Chinese imports to the US, India high-end electronics. big investors it should attract and can seek to gain a growing share the wherewithal to provide tailored of the garments manufacturing pie v. Medical devices incentives to start business locally. by encouraging Chinese and other As per industry estimates, the The HLAG recommends creation of companies (linked to large global Indian medical devices market is a specialised vehicle empowered to brands) to manufacture in India. presently valued at over $11 billion take quick decisions to identify and 5. In order to regain our market share and is expected to grow to $50 attract investors based on pre-defined lost to Bangladesh and Vietnam in billion by 2025. The high-tech end criteria. Further, the vacant land in textiles and garments, concluding of the medical device value chain is Special Economic Zones can be used the Bilateral Trade and Investment currently led by multinationals with to attract foreign investments. Agreement (BTIA) with the EU is very extensive service networks; whereas important. low end equipment and disposables The High-Level Advisory Group are led by domestic manufacturers (HLAG) was constituted by the iv. Electronics because of their cost-effective Minister of Commerce and Industry, The electronics industry in India is innovations. In order to significantly Department of Commerce, confined to low-end value chain and enhance high-end manufacturing Government of India, to assess value addition, which currently is in the sector, the following the global environment and make as low as 5-10 per cent. In order to recommendations are made: recommendations for boosting India’s make India a global hub for high- 1. Create a single ministry for the share and importance in global end manufacturing in the sector, the regulation of medical devices, right merchandise and services trade; following recommendations are made: from import and manufacture, up managing pressing bilateral trade 1. Shift from a tariff-based policy until pricing and sale of the products relations; and mainstreaming new age to an incentive-based policy for for easing the compliance burden for policy making. manufacturing of electronics. both domestic as well as 2. De-link the export contingency foreign manufacturers. This article is an extract from from the incentives/subsidies being 2. Regulate medical devices by a the Report of The High-Level provided to the market players. standalone legislation that is drafted Advisory Group. www.indiaincgroup.com December 2019 77 NEWS IN BRIEF

The past weeks saw several acquisitions and initiatives Indian firms expand by Indian companies aiming to grow their presence in operations across borders foreign markets.

Wipro launches cyber VA Tech Wabag India's Elgi Equipments defence centre in announces South acquires Michigan Melbourne Africa foray Air Solutions hennai-headquartered water ir compressor manufacturer treatment solution provider Elgi Equipments Ltd. has VA Tech Wabag Ltd. revealed bought Michigan Air Solutions Cplans to foray into the South African Afor $6 million to expand its presence market as part of its expansion in the US and strengthen its position programme. in the global compressed air industry.

Rajneesh Chopra, Global Head, Business Development, VA Tech Wabag, said: “We have operations in 30 countries. Going forward, we are looking at entering South Africa as there are immense T major Wipro Ltd announced opportunities.” the launch of its cyber defence centre in Melbourne, Australia this Imonth. The company also has plans to come up with more such centres in other cities in Australia, which will offer resilience and digital protection to large government organisations. Jairam Varadaraj, MD, Elgi The company recycles 423 million Equipments, said: "Michigan Air With the launch of NextGen Cyber litres of water per day (mld) in India Solutions complements ELGi's global Defense Center, Wipro aims to make and 1,250 mld globally. It plans growth strategy and brings significant substantial investments to upskill to close the current fiscal with market reach and scale that will add its employees, hire more local a revenue of $422.5 million (Rs further value to our product offerings resources and generate more than 3,000 crore) compared with $391.6 and go-to-market plans across 100 jobs in Melbourne for cyber million (Rs 2,781 crore) last year. the region.” security specialists. In the first half of this fiscal, the company achieved consolidated Established in 2009, Michigan Air The cyber defence centre is the first revenue of $153.5 million (Rs 1,090 Solutions has served the markets local shared security operations crore), of which revenue from Indian in Michigan's Lower Peninsula with centre for Wipro in Australia and will operations accounted for $63.3 compressed air expertise, a wide provide customers with the ability to million (Rs 450 crore). range of products and responsive rapidly expand capacity and run their after-sales support with product security operations in compliance Asserting that Tamil Nadu was portfolio encompassing compressors, with the local data requirements. a pioneering state in wastewater dryers, filtration, piping, vacuum recycling and reusage activity, he pumps and blowers among others. Wipro said the centre will assist said two wastewater treatment customers to actively manage their plants of 45 MLD each were The acquisition was initiated by cyber risks by leveraging managed recently commissioned by the Elgi Equipment's subsidiary, Elgi services around threat intelligence, state government to cater to the Compressors USA Inc as part of security monitoring and analytics, needs of industrial units. The state its strategy to invest in inorganic vulnerability management, incident also planned to set up its fourth opportunities to gain presence in the response and regulatory compliance. desalination plant along the coast. North American market.

78 December 2019 NEWS IN BRIEF

From education to retail, the Indian market is a strong Global firms strengthen focus for investors from India commitment all sectors and regions.

Walmart, Flipkart invest Foundation Holdings CPPIB commits $225mn in Ninjacart partners Ryan to Bain-Piramal fund International AE-based investment anada Pension Plan firm Foundation Holdings Investment Board has has tied up with Ryan committed $225 million (about UInternational Group and will infuse CRs 1,600 crore) to a distressed assets $100 million into an education joint buyout platform set up by Piramal venture over the next five years. Enterprises Ltd and Bain Capital Credit. An official statement said the two entities will focus on the K-12 education segment to launch a managed school platform 'Ryan EduNation'.

S retail giant Walmart and Aakash Sachdev, MD, Foundation Flipkart said they will jointly Holdings, said: “With $100 million invest in Bengaluru-based investment committed to Ryan Ubusiness-to-business supply chain EduNation over the next five years, company Ninjacart. our ambition is to adopt a scalable partnership model by empowering The three partners aim to help ensure educational institutions and better access to high-quality fresh passionate land owners across produce for retailers and consumers India to create a platform of across India while also creating change and impact.” economic opportunities for farmers. Ryan, which has 137 schools in 40 A statement said: “Partnering with cities with around 270,000 students, CPPIB joins International Finance Ninjacart will help Walmart and will focus on the education, while Corporation as an investor in the Flipkart strengthen direct sourcing Foundation Holdings will be the India Resurgence Fund (IndiaRF). of fresh produce for Walmart India's investment partner. The World Bank arm had committed Best Price B2B cash-and-carry stores $100 million to the fund last year and Flipkart's online grocery The joint venture, under the brand while Bain and Piramal have each business Supermart.” name Ryan EduNation, has put in an equal amount. IndiaRF said already made an acquisition of the it has also raised capital from other The investment will also help managed school platform India international investors and family Ninjacart expand its customer base, Education Services that has 18,000 offices in this round of funding. reach new cities and gain exposure students across the country, the to global best practice to enhance statement said. John Graham, Senior Managing the efficiency of the local fresh Director and Global Head of Credit produce ecosystem. Ryan Pinto, CEO, Ryan Investments at CPPIB, said in a International Group of Institution, statement that the Canadian fund’s Thirukumaran Nagarajan, CEO and said: "Through Ryan EduNation, investment in IndiaRF represents an Co-Founder, Ninjacart, said with the our vision is to provide quality increase in its credit commitments support of Flipkart and Walmart, education to 200,000 students in India, “targeting attractive risk- the company sees new possibilities annually by 2030.” adjusted returns in the sizeable Indian to improve the lives of its farmers, distressed credit space”. retailers and restaurant partners. www.indiaincgroup.com December 2019 79 SPECIAL REPORT

A good year for Indian wine by India Inc. Staff

A new joint venture between India’s Soul Tree wines and the UK’s Kingsland Drinks marked a new milestone in the flow of Indian wines going global, as the first bulk order made its way to Manchester in 2019.

shipment of bulk wine from Kingsland Drinks, says: “We work with India made its way to UK partners to provide solutions reacting shores towards the end of to demand and trends; jointly with A2019, marking a good year in the Highlights Soul Tree, we believe there is a clear efforts of Indian wine producers market opportunity for Indian wine, working towards creating quality • Manchester’s Kingsland especially in the Indian produce that can hold its own among Drinks and Indian wine restaurant sector.” the superior products rolled out of producer Soul Tree have European vineyards. joined hands to introduce two Comprising of Soul Tree Red and wines in the cheaper house Soul Tree White, the pair of wines are A joint venture between Manchester’s wine market. designed to drink alongside Indian Kingsland Drinks and Indian wine food and join the brand’s existing producer Soul Tree will result in a duo • The new Soul Tree wines are varieties such as Sauvignon Blanc, of wines being made available for the targeted at the house wine Rosé and Cabernet Sauvignon. cheaper house wine market on Indian tier on restaurant wine lists in The new wines will be bottled, packed restaurant wine lists across Britain. the UK. and distributed from Kingsland Drinks This marks inroads into a niche full-service site at Irlam in segment that may well lead to bigger • This JV opens up an Greater Manchester. wine exports from India around the opportunity for bigger wine world over time, to complement the exports from India around the The entire Soul Tree wine range will popularity of Indian cuisine globally. world in the future. carry a brand-new look, designed by Kingsland’s in-house design team in Ed Baker, Managing Director at conjunction with Soul Tree, which it

80 December 2019 SPECIAL REPORT

says builds on the brand’s wine lists in Britain and will be milestone in Indian wine’s global existing identity. available through various wholesalers. journey as the Food Safety and But this initial bulk order is expected Standards Authority of India (FSSAI) Adam Marshall, buying controller at to open up a wider field for wine from imposed best practice standards Kingsland Drinks, notes: “The Soul India, traditionally not known as a prescribed by the Paris-based Tree range represents the very first wine producing region. Organisation of Vine and Wine (OIV) Indian wine in our portfolio and a – which consists of 46 wine-producer fresh segment for the category; India countries, including India. The new is now officially on the map as a bulk "INDIA IS NOW labels stipulated by the watchdog wine producer, and we’re excited to must indicate the origin of the wine, OFFICIALLY ON THE lead the way by bringing Soul Tree declare the range of sugar, variety of wines in bulk directly to the MAP AS A BULK WINE grape used, residues/preservatives UK on-trade.” PRODUCER." used, vintage and also carry a statutory warning of alcoholic content, Soul Tree launched in the UK in early in accordance with global norms. 2011 and is now available with Indian “We are determined to take Soul food in restaurants as well as pubs, Tree to the top of the game. Soul According to a US Department of bars, and hotels across southern Tree is already a favourite of tens Agriculture report, although wine England and the Midlands. of thousands of curry- and wine- production in the country is booming, lovers around the UK, and every Indian output represents less than a Alok Mathur, Co-Founder and Director wine drinker in the country will soon per cent of global wine production. of Soul Tree wines, said: “We are have the opportunity to savour it,” This reflects a massive scope for really proud to put Indian wines on the adds the team behind Soul Tree, growth, led by changing tastes among bulk wine map, and the joint venture which has vineyards in India's largest a burgeoning Indian middle class. with Kingsland Drinks presents the wine-grape growing district of Nashik The report also notes that production opportunity to be part of one of the in Maharashtra. The vineyards of is expected to continue to grow in widest portfolios available to the the region have grown in popularity the coming years, with the state UK market. because of the tropical climate, warm governments of Maharashtra and days and long cool winter nights. Karnataka taking steps to support “The collaboration builds on our This is seen as ideal microclimatic the wine industry through various existing varietal range and offers the conditions for wine growing, which support mechanisms. These include opportunity to grow our footprint even is boosted by mineral-rich soils with the reduction or elimination of excise more so in the UK.” good drainage brought about by taxes on wines produced in state, millions of years of soils deposited by easing distribution restrictions, and The new Soul Tree wines are targeted the region's major river, Godavari. providing fiscal incentives to establish at the house wine tier on restaurant Earlier this year marked another wineries and vineyards. www.indiaincgroup.com December 2019 81 LAST WORD Unfair to criticise Modi govt for raising import tariffs by India Inc. Staff

any free-market mavens sales of British mill-made cloth in an average of 20 per cent. The insular are upset with India’s India. The muslin weavers soon went and inward-looking US view on free Narendra Modi government out of business leaving a vast market trade and open markets changed Mfor apparently turning its back on wide open for “free trade” by British after the Second World War only free trade. industry. because its industries, untouched by the bombings that destroyed Europe The provocation: a series of measures and Japan, could them dominate the since the 2018 Budget to raise import world. duties on auto parts, toys, candles, furniture and electronic items such as Asian miracle followed the same mobile phone components, television template sets and microwave ovens, among Even the Asian miracle, first by several other things. India, they Japan in the immediate aftermath allege, is raising protectionist barriers of American occupation following once again, turning the clock back on the Second World War, then by the the reforms initiated by every Indian South East Asian countries and finally government since 1991. by China, followed much the same template – protection to domestic The Modi government’s decision industries behind high tariff walls, to pull out of the Regional FREE TRADE MUST generous subsidies and concessional Comprehensive Economic REMAIN THE DESIRED loans and unwavering state support to Partnership (RCEP) was criticised GOAL RATHER THAN THE prop up exports. by these same people for the STARTING POINT. same reason. These are inconvenient facts that fly in the face of current economic How justified are these comments? orthodoxy. Of course, free trade This equation of free trade plus must remain the desired goal rather Research carried out by India Global liberal democracy equals prosperity than the starting point. That’s where Business shows that free trade helps is a recent development in economic the Indian Nehruvian model went mainly those countries that have theocracy. It must be noted that horribly wrong. High tariffs and import achieved a minimum competitive countries such as the United States, substitution were an ideological threshold. More importantly, it clearly which regularly lectured the world imperative shorn of sound economic indicates that every free trade on the virtues of free trade and logic. It was bound to fail, and it did. champion across the world first open markets was itself a votary created national champions behind of protectionism for much of its Getting the basics right, at last high tariff walls before unleashing existence. The Modi government, on the other them on other nations in the guise of hand, is not travelling down the “free trade”. US prospered behind high import substitution path. Instead, it tariff walls is creating the ecosystem for Make High British tariffs killed Bengal’s The 25th President of the US, who in India to flourish as a precursor to muslin industry ruled from 1897-2001, famously said: Indian companies joining the global The first manufactured product “We lead all nations in agriculture; supply chain. that was subject to tariff wars was we lead all nations in mining; we lead the Bengal muslin that British mills all nations in manufacturing. These As more Made in India iPhones, couldn’t compete against. Having are the trophies which we bring after Samsung phones and toys slowly opened up the Indian market through twenty-nine years of protective tariffs.” enter foreign markets, the success military conquest, the British then or failure of this policy will become levied very high tariffs on both the These policies continued until the evident. domestic sales and exports of this Second World War. In fact, tariffs fine muslin, which was in heavy peaked in the US with the Smoot- Till then, it may be prudent to hold demand all over the world, while Hawley Tariff Act of 1930, which any hasty ideologically inspired simultaneously permitting duty-free increased import duties in the US by judgment.

82 December 2019 INDIA GLOBAL BUSINESS

‘India Global Business’ is the flagship publication of London-based media and publishing house India Inc. The publication offers in-depth analysis, news and expert opinion on business, trade, policy initiatives and foreign direct investment in and out of India. The magazine has a readership of over 100,000 business and policy leaders worldwide.

www.indiaincgroup.com December 2019 83 YOUR NEXT BUSINESS MODEL WILL USE DIGITAL TO DELIVER ON-DEMAND

Predict and prevent breakdowns O er usage-based insurance

REMOTE SERVICE UPDATE

ENGINE With over three decades of experience 38% EFFICIENCY in managing the systems and workings UPTIME of global enterprises, we can help 95% navigate you towards opportunity with 7/24 21:45 hrs SOFTWARE UPGRADE AI-powered Core OTA COMPLETE Agile Digital at Scale Always-on Learning

The journey to digital has so many nexts. Navigate your next with Infosys. Optimize performance in real time www.infosys.com An aside: OTA means Over-the-Air

© 2018 Infosys Limited, Bengaluru, India. 84 December 2019