1. Australian Coalminers Beware
Prime Minister Narendra Modi is changing India by thinking outside the square and electricity supply is one example – while previous leaders planned massive increases in coal fired power stations then faced the huge cost of distribution, Modi now expects to cease importing thermal coal in 2017. That is just next year.
How will he do it? The answer is alternative energy, and the way his government searched the world for cheaper prices in solar energy. India is doing this on the eve of cheaper battery storage of power, so massive distribution costs could be avoided. Reductions in solar tariffs helped as well. Modi announced a National Solar Mission last year, signalling to the world that India was keen to be a big player in this market – and that attracted USA and Japanese solar producers to cut costs and gain a foothold. Australian coalminers have behaved as if demand would last forever.
2. Entrepreneurs and Investors
India’s entrepreneurs are active and confident – they see Modi as a champion of their cause – startups are exploding, venture capital is available and stock market IPO’s are on the up. Almost every business school student is starting a new venture while still studying. One outcome will be growth in innovation – something Australia is searching for too.
3. GST and Budget
This year should see a GST pass the Indian Parliament though this is far from certain, given the unpredictable behaviour of the upper house. Modi has pushed hard for tax reform linked with budget consolidation and the budget in the first half of 2016 will give a big signal to global investors.
4. Crude Oil Helps India
India’s current account deficit was greatly helped when crude oil prices touched 11-year lows in 2015, and this should continue. Modi has been able to use this benefit at the same time as championing foreign direct investment.
6. Capital Flows
Prime Minister Modi travelled the globe in a successful search for foreign direct investment – again, thinking outside the square he sees the role of PM as chief champion of foreign investment. Flows are partly fuelled by the promising startup ecosystem he has encouraged. Relaxation of investment controls will likely see more investment in 2016.
6. The Big Modi Campaigns
Modi is the master of creating and selling a vision and his Make in India, Digital India, Clean India, Skills India and Smart Cities have captured supporters. Last year the PM gathered most of the well-known Indian IT companies and twisted their arms into big spending on digital programs. Skills continue to be a challenge but change is happening, as it is in the Smart Cities space with major global interest. This year the big boosts could come in Make in India and Clean India.
Stephen Manallack is a Director of the EastWest Academy and the author of three books including “Soft Skills for a Flat World” published by Tata McGraw-Hill India in December 2012 – providing insights into the “10 mindsets” of Indian business. He serves on the Judging Panel for the Annual Business Awards of the Indian Executive Club in Melbourne. He is currently preparing COMMUNICATING YOUR PERSONAL BRAND book and training programs. EMAIL firstname.lastname@example.org