Ideas

Peace

In a world set to reach nearly 10 billion inter-connected people, power will come from creating peace, prosperity and freedom so that we can make breakthroughs in how we live together, and this requires a transformation in the very definition of power, and the purpose and principles by which it is exercised

GPC’s Macro Thought Leadership

GPC’s research focuses on the geostrategic changes in the world and the implications of for peace, prosperity and freedom. Our analysis seeks to find the patterns and identify the new forces that are the signs of our times and will determine the future of the world


The world is in a historic transition of great power hegemony, world order, population and resources which will change the very nature of civilisation. These transformations create discontinuities and a dynamic canvas on which the world’s future will be written

The 21st Century has been widely predicted to be the Asian Century, in which the continent, home to 60% of the world’s population, will become the world’s dominant economic, political and even cultural force. Within this continent of 49 countries, two will disproportionately impact the trajectory of the 21st Century on account of their scale and growth potential: China and India. The relationship between these two countries as well as the trialogue with the world’s current hegemon, the United States, will will be critical to shaping global economic and political trends for generations to come.

 

A modern India lifting a billion people out of poverty will need a large, modern and diversified economy to not only realize the aspirations of people but also to clothe, feed, employ and educate what will become the world’s largest population within the next five years and this will require an India that is open to the world and dedicated to unlocking the potential of its people and its assets

 

We bring our network of business leaders, entrepreneurs, influencers and thinkers who are at the frontline of change across to provide insights into the global issues that are rapidly changing the world and how they see an impact being made for good

 

We recognise the complex and rapidly changing nature of India’s markets and economy as it grows and expands internationally and have focused the firm’s thought leadership on detailed research to generate insights into the macro-environment, market strategy, investment opportunities and challenges to generate attractive risk adjusted returns

We live in revolutionary times. Increasingly political, economic and social volatility is driving change on a global level, creating both risks and opportunities for international investors. Greater Pacific Capital’s thought leadership and investing strategy placed it at the forefront of global change

Selected news that makes the difference

India Biggest Recipient of Foreign Portfolio Investments (FPI) in FY21 Amongst Emerging Markets

Driven by hopes of strong economic recovery, high earnings visibility, vaccine progress, and policy stimulus measures, India was the biggest recipient of FPI flows in fiscal year 2020-21 with net inflows of c.US$36bn.

India's Foreign-Exchange Reserves Become World’s Fourth Largest

India’s foreign-exchange reserves grew to US$580bn, which can cover c.18 months of imports, surpassing Russia’s reserves to become the world’s fourth largest, with the nation’s central bank continuing to build its reserves to cushion the economy against any sudden outflows.

Government Extends Emergency Credit Line Guarantee Scheme (ECLGS) by Three Months

The Indian government extended the ECLGS validity, which involves extension of c.40% of total credit outstanding across all lending institutions, by three months to further drive economic revival and create a conducive environment for employment generation.

India, Japan Sign Agreements for Loans, Grants Worth US$2.1bn

India and Japan signed agreements for loans and a grant worth a total US$2.1bn to implement several crucial infrastructure projects across India, including a project improving power supply in the Andaman and Nicobar Islands and a loan for phase IV of the Delhi Metro.

India Targets Investment of US$14bn from Electric Vehicle (EV) Manufacturers

The government is offering fresh incentives to EV car manufacturers including Tesla, Ford and Volkswagen to drive global investments in India as part of a broad automobile sector scheme aimed at attracting c.US$14bn of investment over 5 years.

Reserve Bank of India (RBI) to Develop its Blockchain Platform

The Central Bank Digital Currency (CBDC) floated by the RBI in January will minimize transaction settlement processes by using a private blockchain platform, making transactions more cash-like and giving the central bank tighter control over the functioning of the financial system.

Spotlight on the key monthly news events shaping media coverage in India

Media coverage in India this month covered Prime Minister Narendra Modi’s two-day visit to Bangladesh, the second wave of Covid-19 infections surging across the country and the US Secretary of Defence Lloyd Austin’s three-day visit to India as part of an Asia trip.

 

Prime Minister Narendra Modi Visits Bangladesh, Signs Five Agreements 

 

Following the virtual summit between the two countries in December, Prime Minister Narendra Modi made a two-day visit to Bangladesh, his first official foreign trip since the outbreak of Covid-19, to participate in the 50th-anniversary celebrations marking Bangladesh’s emergence as an independent country. During the visit, Mr. Modi and Prime Minister Sheikh Hasina signed five agreements related to areas of connectivity, commerce, information technology and sports.  Various media publications focused on the implications of Modi’s visit and the agreements signed for India-Bangladesh relations over the coming years.

 

An op-ed in The Print outlined how the bilateral relationship between the two countries could be strengthened through a quantum shift in the trade and economic architecture of the two countries.  “Prime Minister Narendra Modi’s visit to Bangladesh is expected to be momentous, both in optics and substance… India’s Look East Policy has gained momentum with the Modi government grasping the geo-strategic importance of the region. This is evident in the development work undertaken, particularly in creating vital infrastructure that was languishing for a long period. Bangladesh on its part too – riding on the back of a stable polity – has leap-frogged on both economic and human indices.... Therefore, the two countries are now well placed to give shape to a new phase of collaboration based on mutual trust and self-confidence. However, this would be possible only by integrating supply and value chains – leveraging natural and human potential with a borderless economy to make both countries Atmanirbhar (self sufficient).”

 

An op-ed in Indian Express by a Member of Parliament from the ruling BJP party covered why Prime Minister Modi’s visit to Bangladesh following the virtual summit in December is a reiteration that Bangladesh a vital link without which India cannot realise the full potential of either the economic or strategic underpinnings of its ‘Look East’ policy. “PM Modi’s first foreign visit after the COVID-19 pandemic to Bangladesh is, therefore, a reiteration of his government’s focus on the neighbourhood.… Analysing the relationship between the two countries in the light of the boundary accord and the spirit of cooperation and collaboration clearly highlights that India’s attitude towards Bangladesh does not stop at respect and friendship for its eastern neighbour, but also touches on other crucial aspects such as better connectivity, energy, cross-border trade, health and education… The countries are also cooperating in the power and energy sectors. India is focusing on enhancing investments and creating capacity as well as infrastructure for strengthening sub-regional cooperation in power and energy connectivity… The active collaboration and cooperation between India, Bangladesh, Nepal, Bhutan under the BBIN Group is yet another initiative of PM Modi in boosting regional cooperation.”

 

Finally, another op-ed in Hindustan Times detailed why India requires Bangladesh’s support for the development of eastern India, particularly the North-East to allow the region to become an economic engine for growth. “India’s ties with Bangladesh has gone way beyond symbolism... While Bangladesh is the key to connectivity to north-eastern India, it also fits into the calculus of trans- Asian highways that will link India to Vietnam by road… The development and growth of India’s eastern flank will not only contribute to its GDP with tourism holding a vast potential in North-East but also politically stabilise the region with the Bharatiya Janata Party is a major political force on the eastern front… The development of ties with immediate neighbours is also a priority with PM Modi, now that legacy issues like Article 370 and 35 A have been resolved and Kashmir is no longer the permanent stick for adversaries to beat India.”

 

India Faces Second Wave of Covid-19 Outbreak 

 

India reported over 50,000 new Covid-19 infections in the last week of March, the highest since October, as the country’s second Covid-19 wave continued to push daily case numbers up to levels not seen since the first wave was brought under control in November. Easing of lockdown restrictions, new variants and reinfections have been cited as the potential driving factors for the second wave and several state governments including those of Maharashtra, Delhi, Madhya Pradesh and Uttar Pradesh, have begun reinforcing restrictions to combat the rising number of cases.  Media publications focused on potential strategies that the central and various state governments could employ to manage this second wave.

 

An article in Livemint focused on why the national lockdown last year was too stringent and could not be enforced again without severely impacting India’s economic recovery, recommending instead that the local governments use data trends to help isolate hotspots and employ testing-and-tracing mechanisms in order to get the second wave under control. “Extended till the end of May and then lifted in phases, last year’s was assessed to be the world’s harshest. It brought life to a standstill, jammed production, battered our economy, and left millions jobless… Compared with 2020, this year’s contagion is accompanied by a lower mortality rate. Credit this to better informed and equipped medical attention, above all, even if a role is played by wider antibody prevalence. Though virus variants are being studied for signs of weakening virulence, conclusive data on this evades us… Vaccination, the special weapon we now have in our arsenal against the disease, will not be able to achieve the coverage required—estimated at over two-thirds of everyone—over the next few months for herd immunity to keep the spiky bug at bay… we must also deploy a new strategy of vaccine jabs micro- targeted at high covid-risk clusters.”

 

An op-ed in Hindustan Times covered why the Union health ministry and the drug regulator need to approve more vaccines such as Sputnik or the Novavax to achieve the goal of vaccinating maximum number of people at risk and towards achieving vaccine-induced herd immunity. “The second wave, if left uncontrolled, could surpass the peak of the first wave, as the experience of other countries shows. The fact that it is raging at a time when new variants of the coronavirus disease, including the dangerous P1 variant that is wreaking havoc in Brazil, have all been sequenced in India, is cause for concern… Two, what should those measures be? There is, of course, the usual Covid-safety protocol of masking, social distancing, and sanitising. This is now being honoured more in the breach than in the observance… If the latter could approve Bharat Biotech’s Covaxin on the basis of belief and not hard evidence — as expected by many, the evidence followed, and showed the vaccine to be highly effective, but vaccines should always be approved on the basis of science, not belief — there’s no reason for it to drag its feet over the Sputnik vaccine, or the Novavax one.. Complacency over the end of the first wave, misplaced confidence about the vaccination, and fatigue over Covid-safety protocols have brought us here — but smart and fast action, based on science and data, can lead us out.”

 

Another op-ed in Indian Express outlined that given Covid-19 affects urban populations disproportionately with the hotspots (and the emerging hotspots) being in urban areas, it is important to review the sequencing of the vaccination drive to focus on cities first before moving to the rural areas.  “India’s COVID-19 infection curve had dipped sharply in September last year. Despite surging for a few weeks during the festive season, the virus seemed to have entered a phase of sustained decline by the end of 2020. But the situation began to take a turn for the worse again in February… A meeting on March 27 between central and state-level health officials shone a light on the slackness in observing COVID-appropriate behaviour during the recent surge…. These speak of a breakdown in the communication initiatives that played a critical role in checking the virus last year. Even more disturbing is the reported laxity amongst officials in tracing contacts and monitoring micro-containment zones… From April 1, the vaccination drive will be opened to all people over 45. This is a welcome move, especially because government data show the high vulnerability of people in this age group. There is an urgent case for making the drive even more expansive. Less than 5 per cent of the country’s population has received the jab — in contrast, the UK has inoculated nearly 30 per cent and the US more than 10 per cent of its population… The need for flexible strategies and constant improvisation has been amongst the most important learnings in the battle against the pandemic. It’s time to put it into practice.”

 

US Secretary of Defence Lloyd Austin Visits India 

 

US Secretary of Defence Lloyd Austin made a three-day visit to India as part of an Asia trip that included visits to Japan and South Korea. During his visit, he met with Prime Minister Narendra Modi, National Security Advisor Ajit Doval and Defence Minister Rajnath Singh to discuss ways to further strengthen India-US strategic ties, countering China’s growing assertiveness in the Indo-Pacific region and the Afghan peace process. Mr. Lloyd’s visit to India, the first by a top member of President Joe Biden's cabinet, came days after the top leadership of the Quad grouping of the US, Japan, India and Australia vowed to expand their cooperation in the Indo-Pacific region. Media publications focused on what Mr. Austin's visit to India means for the US-India strategic partnership and its implications for bilateral nations between the two nations in the years ahead.

 

An article in Indian Express covered how attracting large-scale US private investment in India’s defence production given India’s focus on strengthening the national defence-industrial base and reducing arms imports will provide a conductive political environment for the growing strategic convergence between the two nations. “The focus of talks between Defence Minister Rajnath Singh and Secretary Austin was on intensifying military-to-military engagement, information sharing, cooperation in emerging sectors of defence like artificial intelligence, and mutual logistics support across the Indo-Pacific. While the Indian armed forces want to acquire advanced US weapons, the government is eager to move away from a buyer-seller relationship… Delhi is seeking American investment in India’s defence production.... “The powerful dynamic in favour of the India-US defence partnership faces some political headwinds.”

 

An op-ed in The New Indian Express by a member of the Confederation of Indian Industry (CII) outlined why in addition to the deepening the defence partnership, a comprehensive and bilateral support to business cooperation in the defence and high-technology sectors is required to realise the full potential of the India-US Comprehensive Global Strategic Partnership. “The US Secretary of Defence General Lloyd Austin’s visit to India this month was the first trip by a Biden administration official to this country. The fact that India was part of the first international tour for the US defence secretary to share the new administration’s priorities shows the commitment of the Biden-Harris administration to the US-India bilateral relationship... Defence trade and investment are key considerations for India and the US’ post-Covid economic recovery, and the scale for industry-led collaborations is wide-ranging… India has the fifth largest defence budget in the world, and the value of its domestic defence production stands close to $12 billion. With the implementation of the Defence Production and Export Promotion Policy 2020 and continued US interest and investment, Indian industry is well on track to achieving our target of $25 billion in defence goods and services by 2024.” 

 

Finally, an op-ed Hindustan Times focused on how Secretary Lloyd Austin’s visit underlined the urgency between the two countries to strengthen the bilateral defence partnership due to shared threats from China’s growing strength in the Indo-Pacific..   “America is back. Diplomacy is back. Alliances are back.” This is, undoubtedly, United States (US) President Joe Biden’s foreign policy bumper sticker. It was Biden’s underlying message in the Interim National Security Strategic Guidance published earlier this month by his administration. It is this simple, clear, and irrevocably direct message that the US secretary of defense, Lloyd Austin, brings to India on March 19, as he touches down in New Delhi for a short visit…. The relationship with India represents an abiding partnership unlike any other. As Austin noted, on his way to Hawaii, the first stop before the Asia tour, the aim of his travels was to rediscover “great alliances” and “great partnerships”.. “For the US department of defense, India offers stability, or at least a degree of balance, in a region beset by Chinese bellicosity. Whether on land, on the commons, or in cyberspace and the internet, China’s one-sided, forceful, and obstructionist imperatives are clearer today that at any time since the end of the Cold War.”

Key insights and forecasts that show us what is to come

Three Pillars for a US Trade Strategy in Asia-Pacific

The US needs to adopt a new approach through sector-specific agreements and initiatives to strengthen supply chains in order to strengthen economic and strategic ties in the region, advance strong rules for new trade issues, and tackle China’s trade policies.

Building a Democratic High-Tech Alliance

Given China and other autocracies have forged ahead with developing new technologies and establishing rules and norms, both the US and Europe must build a technological alliance of democracies that will win the digital race and set the global rules in a democratic mold.

US-India Relations: The Shift from Trump to Biden

U.S.-India relations flourished under President Donald Trump and there an opportunity to further strengthen the partnership between the two countries under the Biden administration by cooperating on borderless threats, particularly climate issues and improving trade relations.

India’s New Development Finance Institution (DFI) Will Help Achieve Big Development Targets

The structure of the newly created DFI, the National Bank for Financing Infrastructure and Development, is important for the institution to successfully become an important instrument for financing the majority of India’s infrastructure investment plans.

The Huawei Factor in US-India Relations

Uncertainty and speculation on Huawei’s future role both in India and the U.S. will have implications not just for their separate relations with China, but for the U.S.-India bilateral relationship and technology partnership as well.

Democratic Revival Can Reboot the International System

The Biden administration needs to restore democratic norms within the United States in order to restore the global influence of liberal democratic values and counter China’s rise that threatens to shift the balance of global values away from democracies and toward authoritarian regimes.

Biden Administration Staying the Course Set by Predecessor on China

US President Joe Biden’s team appears to be staying the course set by the previous administration instead of going back to basics – the economics and trade issues that have long anchored the US-China relationship.

Labour Regulations Need Both Clarity and Uniformity

The Indian government, having embarked on bold labour reforms, needs to further focus on specific regulations that will not only support the current trajectory of India’s economy powered by its high-potential neo-industries, but also cater to the requirements of tomorrow’s workforce.

United States Has an Opportunity to Lead in Digital Development

As the developing world seeks to overcome socioeconomic inequities worsened during Covid-19, the United States can show interagency leadership in establishing digital infrastructure and help countries spur development.

Meeting India’s Net-Zero Moment

India requires a strategic bilateral energy partnership with the US for energy research and development collaborations and supporting the growth of the renewables industry in order for the country to successfully meet its net-zero emissions targets.

India Should be Rebranded for Post-Covid Global Leadership

Post Covid, India should transition from being a volume player to a substantial value player in global markets by increasing its participation in technology and capital-intensive sectors, and by leveraging scientific know-how and enhanced research and development.

The Key Events Driving Global Instability & Opportunity

Big Picture TEST Metrics for the US, India and China, April 2021

The Indian economy continued its robust recovery with the PMI expanding at 57.5 in February from 57.7 in January as firms lifted input inventories at record pace with strong growth in sales and production. Both exports and imports grew by 30% and 8% respectively over the same period last year driven by better demand conditions in the developed markets. No further rate cut was announced by the RBI during this month.

 

The official China manufacturing PMI slowed modestly in February to 50.6 from 51.3 in January but continued operating in the expansionary territory indicating the overall manufacturing industry has continued to pick up. Additionally, trade metrics have continued to improve with improving global demand adding further momentum to a solid economic recovery, with China’s exports and imports increasing by 11% and 17% respectively over the same period last year.