 RUSSIA IN FACTS |
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28 November 2003 21:23
"Political Leadership Has Taken Bold Steps To Facilitate Globalisation"
Federation of Indian Chambers of Commerce & Industry (Ficci) secretary general Amit Mitra needs no introduction
to the Indian audience. But, in recent weeks, he has been travelling outside the country, taking the cause of India and
corporate India abroad. Currently, Dr Mitra is busy in globalising the face of Ficci, with a new image and international
focus. In the last three months he was more like a non-resident Indian (NRI) spending most of his time abroad, whether
in the UK, the US, Indonesia, Thailand, China and Russia. He is also an influential voice within the country. He is on
board of directors of various blue chip companies including PSUs like Steel Authority of India (SAIL), Gas Authority of
India Ltd (Gail), advisory board of The India Fund of The Unit Trust of India and member of the Central Listing
Authority of Securities & Exchange Board of India (Sebi). Dr Mitra spoke to George Skaria and Rajeev Jayaswal of FE
on the new trends of the globalising of corporate India. Excerpts: What is your analysis of Indian companies
increasingly making a global presence in recent times?This recent trend shows the inherent strength of corporate India.
Indian companies are going abroad on a massive scale. They are making their mark in all major markets, be it in the US,
the UK or China. For example, both L N Mittal and the Lohias of Indo Rama group are acquiring plants in the US. Germany
is also a country where recently many companies are going to. Finally, corporate India is also looking at some of the
public sector units in Russia. But why is there is a sudden push in this direction?There are three reasons for it: the
conducive policy measures by the Indian government, the technological competitiveness and the global recession that we
saw. Besides entrepreneurship, we must give credit to the many policy measures taken by the government recently.
Earlier, investment outside was restricted, but now a company can invest up to $100 million without any problem. In
fact, this $100 million can actually be leveraged up to five times. The global recession, which continued for over 3
years has provided an opportunity to buy companies with tremendous value, at relatively low prices. The continuous
recession has made companies available at cheaper price, as in certain places like the US, entire townships depend on a
particular company. If the company closes down, then town also collapses. The third reason, which is also very
significant in our success abroad, is the technological edge and capability that we have built up. We have achieved
great heights so far as the knowledge industry is concerned and this has not only been widely recognised but also
globally acknowledged. Today, we are making an impact globally in both the traditional manufacturing sectors as well as
the knowledge sector. What are the macro implications of this trend? Does it have a greater positive impact on India’s
image and respectability?The Indian political leadership has taken bold steps to facilitate the process of
globalisation. In turn, India is now considered a significant force in the global context. This has been reflected in
Cancun at World Trade Organisation (WTO) summit when the developing world defeated the agenda of developed world. The
same has been seen in the context of China, where the US could not take any steps against China, because US companies
are major investors in China and they have significant voice in the Senate. Interestingly, the Indian position in Asean
countries is strengthening as in these countries, India’s investment is significant. In the apex industry body of
Thailand, Federation of Thai Industry (FTI), out of 20 top business leaders, six are Indians. How much is the Indian
government responsible for these initiatives?Trade with China would not have grown to $7 billion unless political
relation with the country would not have improved. The credit goes to Prime Minister Atal Bihari Vajpayee’s China
initiatives. In China, nothing moves without a nod from political leadership. Similarly, China would not have kept so
low a profile regarding steel industry, despite India crossing steel import quota of 3 per cent to 4.9 per cent, had we
have not had this political understanding. How do you see India’s recent new look east initiatives?It is a significant
move. The future belongs to Asia and this is the right strategy. The government has been successful in its look east
policy. The policy is reflected in the improved bilateral trade relations with Malaysia, Singapore and Thailand. Some of
the Indian corporate leaders had been to Russia recently with Prime Minister Atal Bihari Vajpayee with an objective to
evaluate viable units for sale in Russia. What was their assessment?The Indian leaders accompanying Prime Minister Atal
Bihari Vajpayee on his three-day visit to Russia were interested in acquiring state-owned Russian companies which are
available at relatively low costs. Some of the Indian companies are also keen on establishing their base in Russia. Our
members are interested, but we are very cautious as Russia is still in the early phase of capitalism. We have to be very
careful particularly in land dealings and financial documentation. There are opportunities to tie up with Russia,
specially in the areas of science and technology. What is the sentiment of India Inc internally?Today, the direction of
country’s economy is towards globalisation. While Indian companies are looking outside to have a competitive edge, they
are equally bullish in the domestic market. The gross domestic product (GDP) growth is likely to touch 6.6-6.7 per cent
mark in the current fiscal and it may even jump further if condition of infrastructure improves further. There are
significant moves from government towards building infrastructure be it Golden Quadrilateral or privatisation of Delhi
and Mumbai airport. The economy is vibrant, with better monsoon and global peace and stability. The GDP growth will go
further up depending on the development of infrastructure sector. What is the growth driver of corporate India and what
are the major impediments?Inner efficiency is the engine of growth. However, there is a growth in capital intensive
industry but not in labour intensive industries. The reason is the current labour policy. Labour law needs to be fine
tuned. The focus must be to create more jobs rather than retain the current jobs. The success of textile sector of
Bangladesh is its labour policy where contract labour is possible. Unless the government addresses this issue on
priority, there will be the middle class with jobs and the lower class without jobs.
[AIW [Asia Africa Intelligence Wire]] | | |
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