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

Government to Launch 10m Data Centres to Provide Public Wi-Fi Networks Across India

The Union Cabinet will launch a Wi-Fi Access Network Interface to promote growth of public Wi-Fi networks, which is expected to create employment, enhance disposable incomes in hands of small and medium entrepreneurs and drive GDP growth.

Foreign portfolio investors (FPIs) Invest US$8.1bn in November, Highest in 12 Years

Foreign portfolio investors (FPIs), invested US$8.1bn in November, the highest inflows in over 12 years, with the total investment greater than other emerging market peers including Brazil, South Korea, Taiwan and Thailand.

Task Force to Be Set Up to Boost Qatari Investments into India

India and Qatar created a special task force to facilitate investments by Qatar Investment Authority into India as well as exploring opportunities for Qatari investments in the entire energy value-chain in India.

India Inaugurates World's Largest Renewable Energy Park

India inaugurated the world's largest renewable energy park, which is spread over 180,000 acres and is expected produce 30 gigawatts of electricity through solar panels, solar energy storage units and windmills.

India, Vietnam Sign Seven Agreements during Virtual Summit

During the virtual summit between Prime Minister Narendra Modi and Prime Minister Nguyen Xuan Phuc, India and Vietnam signed seven agreements for cooperation across diverse areas including defence, nuclear power, petrochemicals, renewable energy and treatment of cancer.

Government Issues Guidelines for Coronavirus Vaccination Drive

Following the approval of the Covid-19 vaccine by the US and UK regulatory authorities, the Indian Government announced phase one of the vaccination drive during which they plan to vaccinate c.300m people, including healthcare & frontline workers and people above 50 years of age.

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

Media coverage in India this month covered the implications of the post-Brexit trade agreement between the United Kingdom and the European Union for India, India and Bangladesh signing seven agreements following the virtual summit between Prime Minister Narendra Modi and Prime Minister Sheikh Hasina and the nationwide farmers’ protests against the new agricultural laws passed in September.

 

United Kingdom and the European Union Reach Post-Brexit Trade Agreement

After 11 months of grinding negotiations, the United Kingdom (UK) and the European Union (EU) struck a provisional free-trade agreement that is expected to bring a measure of certainty for businesses after years of Brexit turmoil. The deal, which must be ratified by the British and European Parliaments, ensures the two sides can continue to trade in goods without tariffs or quotas and resolved differences on three key issues: fair-competition rules, mechanisms for resolving future disputes and fishing rights. Media publications focused on how Brexit provides an opportunity for India to sign trade deals separately with both the EU and the UK.

 

An article in Livemint focused on why India may emerge as a net gainer from the Brexit deal as services exports from the country are likely to benefit from the curbs on the free movement of professionals between the two markets.The gains for India are, however, more likely in the services sector because bilateral services trade between the UK and EU is substantial. “In sectors such as IT, R&D, architecture and financial services, we may gain in both the markets but particularly in the UK. For example, in the IT sector, India’s competitor in the EU, particularly in the lower segment of services, is Poland. Now, because Poland will have restrictions on the free movement of professionals, that may be to the advantage of India," Sahai said.… Brexit also opens the opportunity for India to sign trade deals separately with both the EU and the UK. Negotiations for a comprehensive Bilateral Trade and Investment Agreement between India and the EU (including the UK) was called off in 2013 after both sides failed to reconcile differences. A trade deal with the UK now seems more plausible as the country reaches out to the rest of the world to rebuild its credentials as a significant trading power.”

 

Hindustan Times outlined how India can leverage the UK’s desire for some quick trade agreement successes and put together an economic partnership deal that stresses services, aligns data standards, and incorporates immigration.Indian industrial firms will be relieved that the Brexit agreement will allow them to continue to treat the UK as their investment gateway to Europe… New Delhi was never enthusiastic about Brexit, seeing it as a weakening of western unity and a geopolitical gain for a rising China. More recently, however, it has seen opportunity in Britain’s desire to orient itself away from Europe and take a hard stand against China… Brexit has given India an opportunity to show that it is not protectionist as much as forward-looking when it comes to trade, technology and investment. The question is whether the Modi government has a strategic enough sense of trade policy to grasp this chance... This may call for a big rethink of our national response to the covid shock. A proper analysis of the role of State interventions in stopping contagion flare-ups could help us rework our plans.”

 

An article in Financial Express detailed why more dialogue between India and leading European nations is important for the EU to safeguard its interests in the Asia Pacific region amid growing its dependence on China and also to be a strategic partner for its allies in Asia. “India was one of the first countries to establish diplomatic relations with Europe in the 1960’s. The agreement signed in 1994 took the bilateral relationship beyond cooperation in trade.... It is widely believed that Indo-Pacific Region would decide the future of the world. Both India & EU need to work together to actively push for a rule-based order... The EU is at a stage where it wants to be more than a trading bloc, it sees greater participation for itself in global affairs, and is seeking out the right countries like India to partner with. The lack of global leadership during the pandemic left a vacuum that India and the EU can fill... As the global supply chain transitions from its over-dependence on China, India emerges as the most natural ally for the EU in this regard. Furthermore, Europe’s dependence on China for life-saving drugs has been starkly evident during these pandemic times. An alliance of India’s vast manufacturing capacities coupled with European expertise in innovation can be a game changer for both parties.”

 

Another article in Financial Express covered why Brexit increases the prospect of a free trade agreement (FTA) between India and the UK, with the UK unlikely to be too rigid over historical issues that halted the India-EU FTA negotiations such as the insistence by the bloc that India cut import duties on automobiles and wine. “Ever since the Brexit decision in June 2016, both India and the UK have been keen on initiating dialogues on a potential FTA, which couldn’t be held without a formal divorce deal between London and Brussels.... “Any India-UK trade talks won’t have the same level of complication that exists between India and the EU. We can clinch an FTA with the UK without much hiccups,” Saraf said. Having pulled out of the China-dominated RCEP deal, India has been seeking to expedite trade talks with large markets... Former chairman of the Apparel Export Promotion Council, Ashok G Rajani, had earlier said India enjoyed a 20% tariff preference in the EU under its GSP programme. It is to be seen how this gets impacted after Brexit, for exports to UK. It would also be interesting to see how the competition unfolds in the EU, with countries with zero duty benefit in the EU (like Bangladesh) also losing out with Britain’s exit.”

 

India, Bangladesh Sign Seven Agreements, Revive Railway Link

During the recent virtual summit between Prime Minister Narendra Modi and Prime Minister Sheikh Hasina, India and Bangladesh signed seven agreements in areas ranging from hydrocarbons to agriculture that gave a boost to connectivity initiatives and energy cooperation. The two leaders also jointly decided to revive and operationalise the six pre-1965 rail links, re-connecting Bangladesh with North Bengal in India.  Media publications focused on the implications of the various agreements signed at the summit for India-Bangladesh relations over the coming years.

An article in The Print outlined how both India and Bangladesh had worked hard in the recent past to restore and develop connectivity links for the benefit of the people from both sides and why this summit could be the start of enhanced economic integration between the two nations, specifically in emerging market segments such as Information and Communication Technologies (ICT) and Artificial Intelligence. “India and Bangladesh are set to usher in a new era of connectivity between the two countries, with the northeastern states as the main focus at the summit meeting between Prime Ministers Narendra Modi and Sheikh Hasina Thursday… New Delhi is also looking at enhanced economic integration with Dhaka as Bangladesh is set to graduate from being a least-developed country, or LDC, to a developing country by 2024… India and Bangladesh will also announce the establishment of a CEOs Forum to explore investment opportunities in areas such as IT and services. “Bangladesh is poised towards an upward growth trajectory. We are now focusing on developing infrastructure projects worth $35 billion as we register high GDP growth,” Muhammad Imran, High Commissioner of Bangladesh to India, said Wednesday during Victory Day celebrations… He highlighted that despite the coronavirus pandemic the foreign exchange reserves of Bangladesh have crossed $42 billion. According to sources, Indian companies are now planning to set up economic zones in Bangladesh... It is expected that more and more Indian companies would set up manufacturing units in Bangladesh.”

 

An op-ed in Hindustan Times focused on why it is important for New Delhi to reach out to Dhaka and consolidate bilateral development and connectivity cooperation amid China’s renewed bid to expand its geo-political influence in the neighbourhood of India, including in Bangladesh. “On the economic front, Bangladesh is India’s largest trading partner in South Asia. Between 2009-10 and 2015-16, the trade deficit grew in India’s favour at a staggering 164.4%.… The China factor also adds another dimension to the ties. Bangladesh is China’s second-largest arms export destination. Chinese firms have been outbidding their Indian counterparts in infrastructure projects. Bangladesh is deftly navigating relations with its two biggest neighbours in a neighbourhood in flux. Nepal is increasingly becoming closer to China; Bhutan has withdrawn from the Bangladesh, Bhutan, India, Nepal (BBIN) initiative, Sri Lanka and the Maldives are playing a balancing act, both rooted in Chinese investments; …  If Indo-Bangla relations are to move to “newer heights”, then unresolved issues have to be dealt with soon. Any dithering on this, with the region’s only trusted partner, may prove costly for India if it wants to avoid the kind of catch-up diplomacy it has been doing in the neighbourhood in the wake of the growing Chinese threat and Beijing’s widening influence in South Asia.”

 

An article in Financial Express covered how restoring all the six pre-1965 rail links is expected to not only enhance connectivity between the Indian states of Assam and West Bengal and Bangladesh but also support the growth in bilateral trade and economic development of the region.  “For further enhancing rail connectivity India and Bangladesh have decided to reviving and operationalising the six pre-1965 rail links between the two sides... Presently, the rail link will facilitate the movement of goods cargo, and the passenger movement will also commence on the development of infrastructure on both sides. Railway connectivity has been a major focus area for the two countries, and a lot of progress has been made in recent months... For India, Bangladesh is an important neighbour and their relations transcend even strategic partnership. In the last few years, both countries have worked towards restoring and developing connectivity links for the benefit of the people on the two sides...  The trials of these new routes were successfully completed in September this year and now Tripura has for the first time connected with the Protocol Route and through this with National Waterways network through Bangladesh. This will help in creating another viable trade route for trade between Bangladesh and the North East region in India.”

 

Nationwide Farmers’ Protests Against New Agricultural Laws

Farmers across the country have been protesting at Delhi’s border throughout December, demanding the withdrawal of India’s recently passed farm bills. While farmer unions and the opposition parties have termed these laws as “anti-farmer”, saying that they benefit the corporates, the government claims that these policy changes will enable farmers to sell their produce directly to consumers and buyers. Media publications focused on the key reasons for these protests and how they can be resolved quickly.

An op-ed in Livemint covered how the declining farm incomes over the previous few years has been a key trigger for the protests and why the farmers’ demand for making minimum support price (MSP) a legal guarantee should be seen as a demand for ensuring remunerative prices for farm produce. “Behind this stubborn approach is the flawed understanding that the current protests are localized and limited to the specific issue of a minimum support price (MSP) guarantee. In reality, the issue is of a sustained decline in farm incomes caused by low prices... While farmer incomes have been worsening since 2011-12, their condition has worsened in recent years, leading to a build-up of anger... Most farmers would agree that the agricultural produce marketing committee (APMC) mandis are politicized and need reforms. Over the last two decades, several reforms have taken place at the state level, and none has led to this kind of protest. The reality is also that in states where the APMC system is functional, farmers have been able to get better prices… Protesting farmers see the present APMC bypass act as an attempt by the government to withdraw even from this nominal commitment to protect farm incomes. The solution to an inefficient APMC and uneven MSP system is to widen procurement to cover more crops and more states, rather than weaken the existing mechanism.”

 

An op-ed in Hindustan Times by a member of the ruling BJP party writing in his personal capacity outlined why the government must engage with the farmers directly and explain its benefits including the freedom to sell their produce wherever they get better prices, ability to price their produce as per the demand and the opportunity to enter into agreements with corporate and private agribusinesses and engage even in future trading. “In early April 2019, the Bharatiya Kisan Union (BKU) released a Farmers Manifesto for Freedom. It was a progressive document, and said, “Seven decades after India won independence from British colonial rule, the largest section of our population, the farmers, have remained bound by the chain of laws and regulations”… APMCs were started in central India during British rule to force cotton farmers to sell their produce only to State-run markets so that cotton mills in England could have cheap raw material from India. After Independence, the powerful rural lobby ensured that this legacy continued. It helped farmers in the initial years when Indian agriculture was in dire straits until the Green Revolution… The APMC regime was an anomaly, with farmers forced to sell their produce only to APMCs. For political reasons, government after government, in states as well as at the Centre, went on extending the Minimum Support Price regime leading not only to a distorted pricing regime but also the production pattern … Opposition to such historic reforms is suicidal for the farming community. Yet, some sections of the farmers are on the streets blockading Delhi arteries. There could be some genuine apprehensions, such as the need for an MSP protection in case private businesses try to exploit farmers. The government has been open to discussion on such concerns. But the propaganda that the new acts make the farmers slaves to private businesses is far-fetched..” 

 

Finally another op-ed in Indian Express focused on how each farmer must be given a voice and chance to express his worries given the heterogeneity of farmers’ groups and why the queries have to be responded to in a customised way, instead of taking a one-size-fits-all approach.  “But today, India is witnessing a mass protest, and to our surprise, it is by millions of farmers who have by far remained absolutely silent and non-circumstantial. The context of the protests is the three new agricultural laws, passed in September this year… When a section of population, that forms the basis for balancing the socio-economic fabric of the country, feels that they are being ripped off the politico-economic space that they command, it is time to have a relook at the nature of public-policing. I propose that state intervention be given its long-time due transformation under a behavioural approach. In the specific context of farmers’ protests, irrespective of who is right or wrong, behavioural public policy exercises the use of “dialogue” for conflict-management… farmers are a heterogenous group. They have numerous consternations related to agricultural laws, depending upon their land-holding size, crop grown and income background. An extensive dialogue would ensure creating room for all stakeholders to express themselves and the government to address each of them. This will help make these laws more representative by entailing learning, not just talking… The queries have to be responded to in a customised way, and a one-size-fits-all approach should be avoided. Specific issues should be dealt with, till the last question is answered. This requires a mass dialogue at national level.”

Key insights and forecasts that show us what is to come

Pursuit of Good Governance Is Driving Investments in India

The urgency demonstrated by the Indian government in reducing dependency on China as a hub of global supply chain, while providing an enabling alternative environment has resulted in India being viewed as a preferred investment destination by large global companies.

India’s Out of RCEP: What’s Next for the Country and Free Trade?

India’s decision to opt out of RCEP had a strategic dimension given China’s domination in the pact but going forward, its foreign trade policy must be aligned towards making its domestic industries more competitive.

China’s Digital Silk Road Grows With 5G in the Middle East

Covid-19 has made Gulf economies increasingly reliant on China as the nation’s economy recovers faster than the United States’ from the global recession and the Chinese companies’ 5G set up into Middle Eastern markets could chart a course for Asian dominance in the coming years.

China’s Prospects for Carbon Neutrality

China’s aim to become carbon neutral by 2060 dovetails with its goal of lifting the country's consumption share to the level of advanced economies, ensuring that they will reduce the country’s emissions by more than 30% over the next two decades.

China Takes the Lead in Development Finance

China now finances overseas development at nearly the same level as that of the World Bank and this significant increase in global development funding poses large risks for various countries especially regarding debt distress, biodiversity loss, and climate change.

China’s Fit into Biden’s Foreign-Policy Framework

Biden’s administration seems open to cooperating with China on areas of common interest such as mitigating global climate change, but the administration is also likely to emphasise on the promotion of democracy and human rights in China.

China Should Join the Paris Club of Sovereign Creditors

The Covid-19 pandemic has forced one vulnerable country after another to default on its external debt and given China is the main creditor to debt-distressed emerging economies with little experience managing cascading sovereign defaults, it is important for them to join the Paris Club.

India And the Geopolitics of Technology

India needs to ensure that its evolving domestic data architecture supports its international interests besides finding the right balance between localisation and internationalisation.

China Should Beware of the Economic Consequences of Fighting with India

Following the aggression on the border, China trying to delink military aggression from strategic ties with India could have a damaging ripple effect on economic ties between the two countries.

Domestic Economic Reforms in China Can Ease Tensions Between Washington and Beijing

China will need to focus on domestic reforms that address its main challenges as well as lays the right foundation for improved relations with US and other advanced economies.

Assessing the Impact of U.S.-China Technology Competition and Decoupling: Focusing on 5G

As China becomes more aggressive in leveraging its economic power in order to achieve its political goals, the US must maintain its technological advantage to protect its economic and national security.

A Plan for India To Carve Its Own Space in The AI Dominance Race

For India to develop a strong post-Covid global AI economy, the country should focus on creating data infrastructure that will improve the quality of life at an everyday level and significantly enhance governance.

The Key Events Driving Global Instability & Opportunity

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

The Indian economy continued its recovery with the PMI expanding at 56.3 in November from 58.9 in October, signalling a sustained turnaround in industrial activity following the relaxation of Covid-19 restrictions and better market conditions. However, both exports and imports saw a decline by 9% and 12% respectively over the same period last year as major global economies continue to gradually restart their economic activities. No further rate cut was announced by the RBI during this month.

 

The official China manufacturing PMI rose to 52.1 in November from 51.4 in October, operating in the expansionary territory for nine months in a row indicating the overall manufacturing industry has continued to pick up. Additionally, trade metrics have continued to improve driven by holiday demand and the reopening of businesses and schools in US and Europe, with China’s exports and imports increasing by 21% and by 5% respectively over the same period last year.