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 Receives Record US$81.7bn Foreign Direct Investments (FDI) in FY21

India received US$81.7bn FDI in FY21, its highest ever to date, following a a series of policy steps taken to improve ease of doing business and to attract investments into domestic manufacturing capacity and an ambitious infrastructure project pipeline.

India, Israel Sign Agreement on Agriculture Cooperation

India and Israel have signed a three-year agreement with an aim to enhance cooperation in the field of agriculture, under which Centres of Excellence (CoEs) will be set up to train Indian farmers about Israeli farm and water technologies.

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

To support small businesses during the prevailing crisis generated by the second wave, the government has extended the ECLGS validity by three months to further drive economic revival and create a conducive environment for employment generation.

India’s March Quarter GDP at 1.6%, FY21 Growth Revised to -7.3%

India’s gross domestic product (GDP) grew 1.6% in the fourth quarter of 2021, marking two quarters of consecutive growth, however, the full-year GDP growth has been revised to -7.3%, an improvement over the 8% contraction expected earlier.

India Moves to Third Rank in 'Renewable Energy Country Attractiveness Index'

India has moved up a spot to third position on EY's Renewable Energy Country Attractiveness Index, owing to the government's policy focus resulting in the solar photovoltaic (PV) being the most cost-competitive source of power in the region.

BRICS Nations Agree to Devise Framework for Social Security Agreement

During the BRICS labour conference, the member nations focused on formulating Social Security Agreements to help reduce dual social security deductions, allow pension portability, and lead to a reduction of employee cost for companies working in each other’s country.

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

Media coverage in India this month covered country’s ongoing pandemic with the extension of lockdown restrictions imposed by the various state governments, the US$1.4 Billion trade partnership and investment agreement between India and the UK, and the resumption of negotiations on the India-EU trade agreement following the virtual summit between Prime Minister Narendra Modi and the leaders of 27 EU member nations.

 

Reduction in Daily New Covid-19 Cases in India Following Extension of Lockdown Across Country 

 

India recorded over 127,000 new Covid-19 infections in the last week of May, the lowest in 54 days and significantly less than the peak 414,000 cases recorded last month, while the active cases dropped below 2,000,000 after 43 days, as several states including those of Kerala, Tamil Nadu, Gujarat, Maharashtra, Haryana, Bihar and Uttar Pradesh, extended the restrictions imposed last month, including full lockdown and night curfew to contain the spread of the virus.  Media publications focused on potential impact of these lockdowns on curbing the rising number of cases and on the economy.

 

An article in Livemint focused on why the current lockdown strategy imposed by states has a disproportionate focus on tackling cases in urban areas and that the different state governments need to adopt a very different approach to combat Covid-19 in rural India. “India’s first wave was largely about the elderly population and big cities. The fight, hence, became more about containment than medical assistance. Now, with partial lockdowns, the virus spread has affected the country’s working-age population and tier 2 cities…. The pandemic continues strongly, straining our healthcare system. India needs to arm itself against two key concerns: restricting case numbers in rural areas, and addressing post-covid symptoms among its recovered population… With care-giving facilities spread sparsely across vast areas, immediate medical attention is difficult to obtain in rural India. As the virus shows alarming progression, the deficiency of specialized testing kits in community health centres needs to be plugged on a war footing. Adequate screening of patients can happen only once primary level health infrastructure is strengthened… Breaking the chain of the virus requires its timely reporting. With looming fears of forced admission to hospitals, delayed reporting of symptoms only adds to the numbers afflicted by covid. Breaking the chain of the virus requires its timely reporting. With looming fears of forced admission to hospitals, delayed reporting of symptoms only adds to the numbers afflicted by covid.”

 

An op-ed in Indian Express by the chief economist of Investment Information and Credit Rating Agency (ICRA) writing in his personal capacity covered that while various state governments have opted for localised restrictions in a staggered manner to control the spread of Covid-19, what will critically affect the regional trends in economic activity and fiscal outcomes over the course of this year is the pace at which the governments are able to secure and roll out the Covid-19 vaccinations for the under-45 age group. “Looking back, the disruption to economic activity unleashed by the first wave significantly worsened the fiscal health of state governments…  This anticipated shrinking of the revenue deficit has allowed states to plan for a substantial expansion in their capital expenditure and net lending (pegged at 34.1 per cent), while still attempting a modest correction in their budgeted fiscal deficit… While the risk of another wave cannot be discounted, a revival in the sentiment and consumption is linked to the timelines with which the availability of vaccines improves in different states... On the spending side, our baseline estimate for the cost of vaccinating those in the ages of 18-44 works out to Rs 594 billion (US$8bn) for the country as a whole.”

 

Business Today outlined that while the current impact of the COVID-19 second wave on the Indian economy is not as bad as the first wave, the growth over this year will primarily hinge upon how fast the economy can arrest the impact of the second wave across India.  “The impact of the COVID-19 second wave on the Indian economy is not as bad as the first wave, but the surrounding uncertainties remain…  The central bank noted that while the Indian economy has not moderated to the extent it did during the first wave, enveloping uncertainties can be a hindrance in the short term…. It said that although the economy was hit by the second of the coronavirus pandemic, it remained resilient on the back of a bountiful harvest in the RBI farming season as well as the momentum of activity in sectors such as road construction, information technology, housing, and freight transportation… The RBI further stated that the second wave of the COVID-19 pandemic has set off "a raft of revisions to growth projections" and the concurrence on growth rate was leaning towards its projections. The central bank, in the report, once again pegged a 10.5% growth for India's economy for the 2021-22 financial year … While mobility and sentiment indicators have moderated, several activity indicators have held their own and shown resilience in the face of the second wave.”

 

United Kingdom, India Sign US$1.4 Billion Trade Partnership and Investment Agreement 

 

The United Kingdom and India announced US$1.4 billion worth private-sector trade and investment and committed to seek a free trade deal during the virtual summit between Prime Minister Boris Johnson and Prime Minister Narendra Modi.  The partnership deal will lift export barriers on goods ranging from British apples to medical devices and open up India's legal services sector to UK firms. Both countries are committed to begin full trade talks over the coming year with the ambition to double existing bilateral trade by 2030. Various media publications focused on the implications of the "Enhanced Trade Partnership" agreement and investment announcements for India-UK relations over the coming years.

 

An op-ed in Indian Express outlined why India and the UK need to work together to tap into the enormous potential for bilateral strategic cooperation in the health sector and to increase contributions to the global war on the Covid-19.  “The possibilities range from ramping up vaccine production to the structuring of a strong public health system in India, the absence of which has been so terribly felt in the last few weeks. The current pandemic is neither the first nor will it be the last… Even as it overcomes the current COVID wave, Delhi must seize the opportunities to work with its international partners in overcoming India’s failings that have been so mercilessly exposed in the last few weeks. Britain and the G-7 are well-positioned to help transform India’s internal capabilities as well as benefit from them in the management of future global pandemics… While the health sector will necessarily dominate the conversation between Modi and Johnson… Few Western powers are as deeply connected to India as Britain. Yet, building a sustainable partnership with Britain has been rather hard.”

 

An op-ed in Business Today by the Group Chair – UK India Business Council (UKIBC) writing in his personal capacity covered how the new trade and investment agreements provide a firm foundation to catalyse new ways of strengthening bilateral economic relations between India and the UK and driving mutually beneficial growth over the coming years. “India is front and foremost on this list, not least because both India and the UK are rediscovering the great potential of working together to tackle common challenges… In this context, alongside support during the current COVID surge,  a renewed focus on the attainment of a comprehensive Free Trade Agreement (FTA) between India and the UK should be a priority… India is the second-largest FDI investor in the UK, and the UK remains one of the largest G20 investors in India, investing an estimated cumulative total of some GBP 21 billion, thereby creating an ecosystem of 2 million more people within or dependent upon their indigenous supply chains… this parallel and existing commitment in each other's peoples and economies must be a firm foundation on which to establish further a rules-based system of economic relations between India and the UK.”

 

Finally, another op-ed in Livemint detailed why India is at the heart of the UK’s Indo-Pacific strategy that aims at positioning the UK as the most engaged European power in the region by 2030—diplomatically, economically, and geostrategically. “Johnson came to office promising one of the deepest and broadest British foreign, security, development and defence reviews since the end of the Cold War… Johnson has been eager to showcase to the world Britain’s ability and willingness even in a post-Brexit world to defend the global liberal order, most conspicuously threatened by the rise of China. The decision to leave Europe’s single market has forced the UK to look for strong trade relationships with partners beyond the EU, and to target the most dynamic economies—of which a considerable number are located in the Indo-Pacific region… This ‘tilt’ to the Indo-Pacific is still a tilt, and there is a long way ahead. There is some genuine scepticism about the ability of the UK to pull it off. But it does present India with a unique opportunity to recalibrate its ties with London, which have struggled to respond to 21st century realities. Recent announcements suggest that New Delhi is willing to take the plunge.”

 

India, European Union Decide to Resume Negotiations on Free Trade Agreement After Eight Years

 

India and the European Union (EU) announced their decision to resume negotiations for a balanced and comprehensive trade agreement after a gap of eight years during a virtual meeting between Prime Minister Narendra Modi and leaders of 27 member nations of the bloc. The two sides also unveiled a “connectivity partnership” in digital, energy, transport, and people-to-people sectors, enabling the two to pursue sustainable joint projects in regions spanning from Africa, Central Asia to the wider Indo-Pacific. Media publications focused on what the virtual summit means for the EU-India strategic partnership and its implications for bilateral ties between the EU and India in the years ahead.

 

An op-ed in Money Control outlined how the resumption of free trade agreement negotiations and connectivity partnership has the potential to provide a new strategic direction to EU-India ties on goods and services trade, investment, public procurement, intellectual property and competition. “The India-European Union (EU) leaders’ meeting hosted from Porto, in Portugal, confirms that bilateral ties have come a long way since the first EU-India summit in 2000… Apart from outcomes, the symbolic value of such meeting cannot be underestimated. The EU rarely meets foreign leaders in this format... Apart from reaffirming broader issues agreed during earlier summits and announced under Roadmap 2025 last year, the major outcomes include resumption of FTA negotiations, connectivity partnership, artificial intelligence task force and a joint working group on resilient supply chains…. In recent months, Commerce and Industry Minister Piyush Goyal argued for an early harvest or an interim trade agreement along with re-starting FTA negotiations... As conclusion of negotiations may take a few more years, both have agreed to start parallel negotiations on stand-alone agreements on investment protection and geographical indicators. With close to $100 billion investment from its 27 member states, the EU is one of the largest investors in India… The connectivity partnership is likely to expand digital, energy, physical and people-to-people connections between Europe and India. It will help infrastructure projects within India and its neighbourhood”

 

An op-ed in Hindustan Times covered how renewed momentum in India-EU ties is the need of the hour with India looking for substantive partnerships with like-minded nations to bring stability to the Indo-Pacific theatre and the EU being forced to reckon with the geopolitical implications of its foreign policy imperatives following the criticism the bloc received on signing the Comprehensive Agreement on Investment with China. “The most significant outcome of the summit was that after eight years and several rounds of talks spanning six years, India and the EU have decided to resume negotiations for a comprehensive trade agreement... Today’s changed circumstances provide the two sides with a new set of opportunities to move forward on this long-stalled agenda. The EU wants to pivot away from China. It recently signed a Comprehensive Agreement on Investment with China, which has drawn a lot of flak and its ratification has now been suspended because of diplomatic tensions… India wants to showcase its commitment to open trade at a time of renewed focus on developing a domestic manufacturing base. With the EU being India’s largest trading partner and the second-largest export destination, the economic logic of strong India-EU economic relations is self-evident… With its India and Indo-Pacific strategies, Brussels is making its changing priorities clear and with a robust outreach to Europe, New Delhi is also signalling that it is willing to take the plunge.” 

 

Finally, an op-ed in News18 focused on how following India’s decision to withdraw from the Regional Comprehensive Economic Partnership (RCEP), which covers much of the eastern hemisphere, last year, the country risks the possibility of losing out on cross-border commercial relations in a highly dynamic region, making it imperative for India to sign a trade agreement with the EU, given the significant potential for India’s trade expansion in the EU.  “India and the EU began negotiations on a broad-based Bilateral Trade and Investment Agreement (BTIA) in 2007. Today, the two sides are no longer looking at a single Trade and Investment Agreement; they will negotiate the two agreements concurrently but separately, which means the objective is no longer a BTIA…  The Indian side was very keen on announcing the resumption of FTA negotiations for the summit to be seen as a political success. Rightly so, as a continuing blockage would hinder the development of broader India-EU bilateral ties. Having walked out of Regional Comprehensive Economic Partnership (RCEP) and facing economic headwinds, India is now keen to conclude such agreements… The India-EU dialogue covers the EU-India Clean Energy and Climate Partnership… Both have expressed a readiness to explore negotiations for a framework partnership agreement. India would be interested in exploring ties with the EU’s permanent structured cooperation in the defence area.”

Key insights and forecasts that show us what is to come

The Strategic Consequences of India’s Covid-19 Crisis

India’s crisis could extend to beyond its borders with new viral strains out of India posing a potential threat of a new global wave besides the country’s lost economic productivity impacting global trade and investment.

Joe Biden’s Infrastructure Plan Visualises a More Inclusive, Sustainable, and Competitive America

The infrastructure plan focuses on strengthening the value chain of infrastructure development through upgrades to R&D programmes and workforce development programs.

EU-U.S. Research and Innovation Cooperation - A Window of Opportunity

For Europe, a renewal of its alliance with US seems conceivable again after four years of transatlantic conflict, provided the doors to the Chinese market remain open to European companies and investors.

The European Union Needs a Clear and Credible Strategy for the Indo-Pacific

The EU’s Strategy for Cooperation in the Indo-Pacific needs reflects an awareness of the Indo-Pacific region’s growing strategic importance but needs To offer more strategic clarity.

Sectors Defined by Science and Technology to See High Growth in Post-Recovery Decade

Productivity growth in sectors driven by Science and Technology – such as biomedical science, green tech – is likely to drive the world economy over the next decade.

US Attempted Shortcut Undermines Peace in Afghanistan

The U.S. troop withdrawal and the air-lifted peace process doubles uncertainty over the possibility of success in formatting a political settlement between the Afghan government and the Taliban.

India’s Economic Diplomacy in South Asia Needs to Change

India needs to reform its institutional hurdles such as policy and bureaucratic delays, eliminate non-tariff barriers and other trade barriers and increase its investments and trade with neighboring countries to reap the benefits of greater regional and economic integration.

China-Germany Relations at the Crossroads

The political transition in Germany comes at a crucial moment for its approach to China and with China-German relations becoming a campaign issue, the next government might be less positively inclined toward Beijing than Merkel was.

Microfinance Can Play a Key Role in Building a Resilient India

Microfinance institutions has had a far-reaching impact on financial inclusion and have the ability to promote financial literacy and complement their operations with social development projects and community-connect initiatives for India to build a more resilient economy.

The Climate Change Battle Can’t be Won Without Industry Action

While the Indian industry has begun to take on new initiatives on renewable energy and electric mobility, the war against climate change cannot be won without deep decarbonization of industry and will require major shifts over the next 30 years and more.

The Key Events Driving Global Instability & Opportunity

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

India’s gross domestic product (GDP) grew 1.6% in the fourth quarter of 2021 up from 0.4% in the third quarter, marking two quarters of consecutive growth. The Indian economy PMI increased slightly to 55.5 in April from 55.4 in March despite fresh domestic factory orders and output easing to eight-month lows due to an intensification of the coronavirus pandemic. Both exports and imports grew by 188% and 167% respectively over the same period last year when the national lockdown was imposed 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 grew in April to 51.9 from 50.6 in March 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 32% and 43% respectively over the same period last year.