Some people describe 2016 as tumultuous year, and it’s certainly been a year of change across the wider global economic framework. Following Brexit the election of Donald Trump, one commentator summed up the new landscape as “both changing expectations of Americans in terms of their own prosperity and its distribution, and a wider shift linked to a surge ..in nationalist sentiment the world over,”* India’s had its own shock through the demonetisation initiative last November.
From NZTE in India’s perspective it’s been head down and carry on…
The end of 2016 presented a busy fourth quarter for NZTE in India who, along with the other NZ agencies, executed a range of collaborative activity to support New Zealand businesses; building a stronger platform for growth in the trade relationship.
A number of companies -amongst the seven who joined our “Make in India Study Tour” in early October -are continuing in dialogue and negotiation with potential partners here. The week -long tour was a hands- on programme across Delhi, Pune and Mumbai, to help participants understand the ins and outs of manufacturing products in India. We’ll be building on this work this year.
The companies that joined our Black Caps leveraging events in September and October reported positively about the relationships they strengthened during these events. Following the successful albeit truncated visit of the Prime Ministerial led business delegation in late October, we continue to support a number of delegates in their follow-up actions and business growth plans here.
Going the other way, it was great to hear from Indian Oil that their senior management study tour to NZ, organised by INZBC, was exceptional and they built great perspectives about New Zealand (culture, energy, renewable energy, technology, business practices) with some interesting commercial connections made as well.
Looking ahead for the year we’ll build on this and continue to work closely with manufacturing and ICT companies working in industrial and B2B sectors, whilst supporting food and beverage and B2C companies targeting the top end consumer.
And the business operating environment is looking reasonably positive. India’s economy grew by 7.2% in the first half of 2016/17. Demonetisation has clearly impacted demand and economic activity has slowed across sectors, with growth forecasts being scaled back for this year and next. While it’s not yet clear how much of a knock this will have, some punters are putting next year’s GDP growth at 7-7.5%, a very credible growth rate in today’s environment.
At an IMA/Baker& McKenzie organised forum on “Doing Business Globally –India on the World Stage” in New Delhi last week, the overwhelming sentiment of the 300 participating corporate leaders, when surveyed on the spot, was confidence that India’s ease of doing business will increase over the next five years. The forum also voted that India’s influence in the region will be markedly greater in five years’ time.
The Government’s Union budget released last week, and which focused on TEC- Transform, Energise and Clean-
certainly contained a number of measures to improve India’s ranking in the ease of doing business stakes, including legislative reforms to rationalise labour laws, abolition of the Foreign Investment Promotion Board (‘’FIPB”) that vets FDI proposals, and a tax consolidation regime aimed to reduce on-going tax compliances cost, promote business efficiencies, and reduce litigation.
Other Budget themes include a big push on digitisation and moving towards a cash-less society, a focus on agriculture and the rural economy, as well as growth- oriented measures envisaging an increase in capital spending of 25.4% and emphasising the creation of infrastructure.
Good news for New Zealand companies doing business in India that this budget maintains the steady path towards facilitating India’s transformation to a more internationally open market economy.
Last week we welcomed new High Commissioner Joanna Kempkers to India and are excited to be working with her and her team for another great year helping New Zealand companies grow bigger better and faster in India.