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

Asian Infrastructure Investment Bank (AIIB) in Discussions with India for Financing US$8bn Health Infrastructure Scheme

The AIIB is in discussions with the Indian government for financing a c.US$8bn project to improve the health infrastructure at the district level for the country better prepared for the future healthcare challenges. 

Data, AI Could Add US$450-500bn to India’s GDP by 2025

NASSCOM, the Indian IT industry body, issued a report states predicting that utilization of data and AI capabilities across key sectors such as agriculture, tourism, energy, logistics and financial services would contribute to economic recovery post Covid-19, potentially adding c.US$450-500bn to India’s GDP by 2025.

Foreign Portfolio Investors (FPIs) Invest c.US$5.5bn in Indian Markets During August

Following the opening-up of the Indian economy and resumption in business activities, FPIs have begun re-focusing on investing in Indian equities due to their attractive valuations and have infused c.US$5.5bn into Indian markets during the month of August.

India Unemployment Rate Down to Pre-COVID Level

India's overall unemployment rate in July dropped to 7.4% from 11% in June, in line with pre covid-19 levels, indicating that the job crisis during past three months when the country was under strict lockdown has declined notably.

Germany to Join India Founded International Solar Alliance

Germany is expected to join the International Solar Alliance co-founded by India and France, which could provide strategic and financial weight to India’s large cross-border power grid plan, the One Sun One World One Grid, that seeks to transfer solar power generated in one region to feed the electricity demands of others.

India to Offer Land Near Major Ports for Solar Equipment Manufacturing

India plans to offer land near ports for setting up solar equipment manufacturing, with the strategy aimed at pushing India’s attempts to become an integral part of global supply chains, as firms look to move production lines out of China following the coronavirus pandemic.

India Among Top Three Performing Emerging Markets Globally in August

For the first time since Covid-19 was declared a global pandemic in March, India found itself among the top three emerging markets based on a combination of various market and macroeconomic indicators, just behind China and Brazil, driven by a surge in foreign inflows which boosted the local currency at a time when other emerging market currencies depreciated against the dollar.

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

Media coverage in India this month covered the first phase of the new bilateral trade agreement between India and the US, the new education policy approved by the Union Cabinet to transform school and higher education across India and the launch of the Transparent Taxation Platform aimed at bringing transparency in income tax systems and empowering taxpayers.

 

First Phase of Comprehensive India-United States Bilateral Trade Agreement to be Signed

 

Phase one of the bilateral trade agreement between India and the US is expected to be signed shortly. The proposed ‘mini’ trade deal is expected to cover tariff-related concessions for US farm products, pricing of pharmaceutical products and information and communication technology products. In return, the US is expected to restore benefits accorded to Indian exporters under the Generalized System of Preferences (GSP), which was terminated by President Trump in June last year. Media publications focused on the implications of the expected trade agreement on India-US relations over the coming years.

 

An article in Indian Express outlined how the current global environment following the spread of the COVID-19 pandemic and the escalating US-China trade war provides an opportunity for India to reconfigure its trade relations with the US and why the government needs to focus on addressing India’s structural issues to improve the country’s export competitiveness in order to realise the full potential of the trade deal. “Union Commerce Minister Piyush Goyal announced that India and the US were close to finalising a “quick” trade deal. This limited deal, unlike a more comprehensive free trade agreement, is likely to cover around 50-100 goods and services… The US is likely to push for far greater access for its agricultural/dairy products than India will be prepared to offer — this was also a major sticking point in the RCEP negotiations. Other thorny issues are likely to include intellectual property rights and digital taxation… Signals emanating from the government in the recent past — the decision to opt out of the RCEP, as well as the hikes in import duties — have suggested it is veering away from freer trade, towards a more inward-looking, protectionist stance. This approach needs to be reconsidered... While China continues to be central to global supply chains, and any re-adjustment will be time consuming and a costly affair in the short run, India must seize this moment.”

 

The Hindustan Times focused on how a comprehensive trade agreement could unlock the full potential of bilateral and commercial relations between the two powers while increasing bilateral investments and significantly boosting job creation in both the countries. “Indian Ambassador to the US Taranjit Singh Sandhu on Thursday made a strong case for conclusion of the ongoing trade negotiations which would become the first phase of a comprehensive bilateral trade agreement between the two nations… India’s bilateral trade has been growing at the rate of 10 per cent on a year-to-year basis, reaching $150 billion in 2019… The US is today India’s biggest trading partner, but the real potential of the trade relationship is yet to be reached, he added… India is demanding exemption from high duties imposed by the US on some steel and aluminium products, resumption of export benefits to certain domestic items under the Generalized System of Preferences (GSP), and greater market access for its products from sectors such as agriculture, automobile, automobile components and engineering.”

 

An article in The Print outlined why any differences would need to be resolved before the US presidential elections in November given the risk of the trade agreement having to be re-negotiated if there is a change in power in the White House. “India has been pushing the US to restore the GSP trade benefits since they were suspended in June last year. India used to get benefits worth around $6 billion — out of the $46 billion worth of goods it exports to the US — by means of zero or reduced tariffs on 2,167 products… Both the USIBC and the USISPF have written to the White House and the Office of the USTR to sign the smaller trade deal before the presidential elections in November. The unnamed official quoted above said: “If the (mini) deal is not signed in the next two-three weeks, the countries will have to start from scratch” ... American businesses have also been pushing for the smaller trade deal, while the countries’ respective ambassadors Taranjit Singh Sandhu and Kenneth Juster have also batted for it. “Things right now are really close and we can do the deal in the coming weeks… While some may be tempted to wait until after the election, I fear that we will lose another 12 months and will end up having to start from zero if we wait until after the election,” USIBC’s Biswal said.”

 

Union Cabinet Approves New National Education Policy to Revamp the Indian Education System

 

The Union Cabinet approved the National Education Policy 2020 (NEP 2020), which sets out a vision for 2040 with a plan for transforming school and higher education across India, replacing a 34-year-old national policy on education. The NEP 2020 aims to achieve 100 per cent youth and adult literacy in India through several structural changes in the early and higher education systems along with an increased focus on non-academic skills and increased inclusion through language diversity and curricular flexibility. Media publications were generally supportive of the new education policy and focused on how NEP 2020 had the potential to be the first step in overhauling and revamping India’s education system.

 

An op-ed by a senior economic policymaker in The Hindustan Times (writing in his personal capacity) summarised the NEP 2020's overall objective of helping India become a ‘knowledge superpower’ through a focus on critical thinking, experiential learning, interactive classrooms, integrated pedagogy and competency-based education. “The National Education Policy (NEP) 2020 comes a staggering 34 years after it was last revised. With this comes the possibility of historical educational reform. Timely and progressive, it marks a monumental milestone in the country’s education system... NEP will drive change in alignment with the system’s need to focus holistically on the most critical tenets of access, equity, infrastructure, governance and learning... Continuous tracking of learning, flexible board exams, conceptual assessments and Artificial Intelligence-enabled data systems will be critical to orienting the entire organisation around outcomes (as opposed to the traditional excessive focus on inputs), providing a systems-health check, as well as steering the right reform and course correction... Backed by expeditious and effective implementation in sync with its spirit, NEP will shape the lives of India’s future generations.”

 

India Today outlined why the government needs to encourage private investment in the education sector to bring the cost of the education down in order to successfully create the systemic change that the new education policy aims to achieve. “The current pandemic has already swiftly transformed teaching and learning well beyond the classroom. In light of a shift towards a more personalised learning experience, teachers of the future are expected to be data collectors, as well as analysts, planners, collaborators, curriculum experts, synthesizers, problem-solvers and most importantly learners and researchers themselves… However, according to UNDP estimates, the total financial requirement for India to reach Sustainable Development Goal (SDG) 4 by 2030 is USD 2,258 billion, which for the years 2017-2030 averages USD 173 billion per year, far exceeding the current government budget of USD 76.4 billion a year for education. It would be unrealistic to expect such large investments coming solely from the government and purely philanthropic initiatives. The current regime has always been strong on reforms to leapfrog sectors in the country.”

 

An op-ed in Livemint emphasised that while the NEP’s emphasis on foundational literacy and numeracy is laudable, it will require revolutionary changes in mindsets and political realities across various state governments to successfully implement this policy. “The recently announced new National Education Policy 2020 (NEP) sets out a vision for 2040 with a plan for transforming school and higher education across India... And its implementation will depend largely on state governments, since education is a concurrent subject under the Constitution.... The expected transformation cannot materialise unless we can create more equal socio-economic opportunities in terms of access to education, change the culture of institutions in education, regulators and governments, and end the political intrusions that are so common in every sphere of education... growing politicisation of universities has strangled autonomy and stifled creativity without creating any accountability. The quality of education is collateral damage… the Higher Education Commission of India [has] four separate verticals for regulation, accreditation, funding and standards. These four functions are not performed by one institution in any country... Given the bureaucratic culture of intervention and control in government, such centralisation is bound to make regulation “tight" rather than “light".

 

Prime Minister Narendra Modi Launches Transparent Taxation Platform

 

Prime Minister Narendra Modi launched a new platform "Transparent Taxation - Honouring the Honest" to initiate major tax reforms aimed at bringing transparency in India’s income tax systems and empowering taxpayers. The tax reforms introduced a mechanism for faceless assessment and appeals, and a taxpayers’ charter to reduce litigation, simplify tax filing and prevent harassment of honest taxpayers. Media publications focused on the implications of this new platform in enhancing transparency and efficiency of the Indian tax system.

 

An op-ed in Livemint detailed how the new tax reforms could help India take a significant step towards accomplishing the Central Government’s vision of improving the ease-of-doing-business in India. “Prime Minister Narendra Modi announced the implementation of faceless assessments with immediate effect and faceless appeals from 25 September. These announcements and initiatives were made towards accomplishing the vision of ease of doing business in India... The assessment will be finalised using online mechanism, so there is no need for physical presence. Further, this scheme is designed in such a manner that both taxpayer as well as the assessing officer does not know the identity of each other. Since there is no need for physical presence, it will save time as well as cost of the tax payer. It will also help curb unethical practices from the system.... The shift is an attempt to honour the honest with an objective to strengthen the government’s direct tax reforms. The tax department's way of dealing with tax payers is considered an unpleasant one. These changes in the tax filing process point to a shift in the focus of the government from considering the department from a revenue [perspective] to thinking of it as one supposed to serve the taxpayer.”

 

An article in The Indian Express outlined how the tax reforms would bring in transparency in the tax collection system and thus widen the tax base by encouraging more people to pay. “The new proposal was revealed on a day Prime Minister Narendra Modi announced measures aimed at easing compliance and rewarding honest taxpayers. Launching the ‘Transparent Taxation — Honouring the Honest’ platform which promises ‘faceless’ assessments and appeals, he said the tax administration would attempt to be “seamless, painless and faceless”… these measures were proposed to widen the tax base, ensure better compliance and transparency… Under the new faceless scheme, assesses will be expected to file their replies online, and will not be required to visit income tax offices. Artificial intelligence and data analytics will be used for team-based assessment and review of cases… While scrutiny of cases has reduced in the last six years — from 0.94 per cent in 2012-13 to 0.26 per cent in 2018-19, the number of people filing income tax returns has increased by about [25 million] in the last 6-7 years, the Prime Minister said. He, however, asked more people to come forward to pay taxes, pointing out that only [15 million] people pay taxes in a country of [1.3 billion], which is “too less”.”

 

Finally another op-ed in Livemint detailed how implementing the tax reforms successfully would require high quality and clear communications with taxpayers to avoid any misunderstanding and unnecessary litigation. “The efforts towards reforming the tax administration started a few years ago with the introduction of e-assessments conducted over email and through a portal. These were done by the jurisdictional tax authority and the identity of the officer was known to the taxpayer… The scheme, which is system-driven and provides an audit trail, is unbiased and fully transparent. The formal process of giving show-cause notice through the National e-assessment Centre (NeC) ensures that the taxpayer has sufficient time to provide information, instead of responding to last-minute demands for information and unexpected additions in the assessment… Assessment orders will be more thought through as they will be guided by collective wisdom instead of individual discretion…. Even as the government is working towards addressing the potential challenges, a few areas will be critical to realise the full benefit of the new scheme. Key among them is the voluminous online submission and explanation of intricacies of business models.”

Key insights and forecasts that show us what is to come

India’s Opportunity of Scaling Europe’s Carbon Wall

The border carbon adjustment tax proposed by the EU presents an opportunity for India to be a leading provider of technology, create new jobs and a cost-effective, low-carbon products ecosystem.

To Avoid Overdependence on China, Cambodia Needs to Build its Relations with India

Given India’s rising influence in the ASEAN region, Cambodia should focus on strengthening ties with India in order to balance China’s rising economic and geopolitical influence across the region.

China Looks to Ease Tensions as President Trump Seeks an Election Boost

China has been wise in trying to arrest the deterioration in relations with the United States and others in recent weeks to avoid moving to the top of the US election agenda given voters will be more focused on domestic conditions and not foreign affairs during the upcoming elections.

Covid-19 and the Geopolitics of American Decline

While most rich countries had brought their covid-19 infection rates down far below their initial peaks, the US has failed to control the record number of daily new cases, which has damaged global opinion about the competence of the US and its global influence.

The Big Turn Inward for China

In the current situation, if China accelerates a shift towards indigenous sources of demand and innovation, its foothold on global supply chains would strengthen making it move up the value-added ladder and emerge as a central node in the production and development of key technologies globally.

India-Japan Defence Ties to Get a Boost with Modi-Abe Virtual Summit

India and Japan are expected to sign an important military logistics agreement to expand their defence partnership and technology cooperation following the backdrop of Chinese aggression against both countries.

Convergence of Physical and Digital: A New Dawn of Retail in India

The post Covid-19 landscape has created a digital ecosystem in which e-commerce and neighbourhood stores will complement rather than compete with each other presenting a win-win proposition for all the stakeholders – e-commerce companies, neighbourhood stores and customers.

How India will Chart its Own Economic Course

India should use its advanced technological base to focus on essential sectors in order to gain an important manufacturing advantage over other manufacturing countries in the midst of the global focus to reroute supply-chains away from China.

The Key Events Driving Global Instability & Opportunity

Big Picture TEST Metrics for the US, India and China, September 2020

India’s manufacturing output in July contracted at a faster pace than in June, signalling a continued disruption in business activities amid a sharp Covid-19 induced demand slump driven by local lockdowns imposed across the country by state governments. The PMI contracted to 46 in July from 47.2 in June suggesting that a pick-up in activity will not be seen until infection rates decline and restrictions can be further relaxed. The revival of demand remained a concern as both exports and imports saw a decline by 10% and 29% respectively over the same period last year. During its recent meeting, RBI left interest rates unchanged at 4%.

The official China manufacturing PMI for the month increased to 51.1 in July from 50.9 in June and higher than analyst expectations of 50.7 as improving prospects for electrical and pharmaceutical goods helped sustain a broader recovery from earlier coronavirus shutdowns. Additionally, trade metrics have continued to improve as major global economies have gradually restarted their economic activities with China’s exports increased by 10.2% (while imports decreased by 6.5%) over the same period last year.