Hey Vijay,

American CEO's are talking the same as you.
http://www.expressindia.com/fullstory.php?newsid=63777

American CEOs on Friday identified poor infrastructure and bureaucratic delays as major deterrents to US investments in India, while making a strong pitch for further liberalisation in the financial and retail sector.

Unveiling the US-India CEO forum report with his Indian counterpart, Ratan Tata, JP Morgan Chase & Co chairman and forum co-chair William Harrison cited absence of adequate infrastructure and the bureaucracy as the reasons for lack of excitement in American companies about investing in India.

"I think there is lack of excitement about investing here because of factors like poor energy supply, roads, airports, ports, the core infrastructure, bureaucracy... Its hard to get approvals, permits and in the legal system, the process is slow and cumbersome and it takes a long time for settlement of disputes," he said.

The business forum, comprising select top CEOs from both the countries, has identified six priority initiatives for cooperation to be taken up by both the governments, as well as the private sector, to boost investments.

These include setting up of a five-billion dollar infrastructure development fund to make Mumbai a financial hub and facilitate setting up of large-scale SEZs.

Harrison said the Indian government should also further liberlise the financial sector, as US companies were bullish on growth there.

"India should reduce restrictions on foreign investment, especially in banking, insurance and retail."

The other initiatives targeted by the forum was facilitating enhanced movement of people between the two countries and stepping up of national coordination of IPR enforcement efforts in India.

Reforms of the Indian power sector and setting up of more institutes of higher learning with opportunities for joint research projects are other areas the forum identified for enhancing cooperation.

The forum also sought cooperation on government-to-government efforts on civilian nuclear energy and sought speedy enactment of pending legislation in the oil and gas sector.

Increased cooperation on human resource development as well as technology exchange between US and India were also among areas identified as priority initiatives by the forum.

The members of the forum from India include Bharat Forge Chairman Baba Kalyani, Biocon Chairperson Kiran Mazumdar Shaw, ITC Chief Y C Deveshwar, Reliance Industries Chairman Mukesh Ambani and Infosys CEO Nandan Nilekani.

From the US, the forum includes Citigroup Chairman Andceo Charles O Prince, AES Corporation President Paul Hanrahan, Pepsico Chairman Steven Peinemund and Visa International President and CEO Christopher Rodrigues.

Rakesh,

Noted brother. I do see myself, while rebelling with all of my might against the western imperialists, I do see that I all too often succumb to the same old tired thinking.

Thank you for the different, and logically compelling, outlook. I will not call you 'pal,' I choose to call you brother. Thanks brother!

peace

Dear Craig,
Would try and dig deeper in my thoughts too.. Logic is just the first step, wisdom is still a long way...
in peace brother..
-very best regards
rakesh mawa

Dear Rakesh,
I use this FDI, FII jargon on a daily basis as part of my work and there is not a chance of having mixed up on that. I don't even have to look at links google throws up, I come across this stuff everyday.
You have mixed up in understanding what I wrote. You are using the term FII to mean Foreign Institutional Investment in your above post, where as I had used it to mean Foreign Institutional Investors.

Cheers!
Navin

Rakesh,

And I do have so very far to go; and I am striving.

Thank you.

peace to you also my brother

Thanks Navin and Rakesh. Just read the link you provided and it was quite helpful. What kind of strings are attached to receiving FDI? If China's is doing it, it must be a safe bet, but still. Is a project such as Enron was, considered an FDI venture? I must say the Indians got that one right - booting Enron out way before even the US caught on to their scams.

Vijay,
You'd also observe that India is looking out for partnerships with other countries besides US as well. The cold war era politics of either US or USSR is past and India doesn't exactly aspire to be US's little bro in the east. I remember the dot com bust and you'd notice that most of the IT companies in India started exploring newer markets, diversifying into newer technologies and thriving as US IT industry was on its knees. I remember my former organization getting its largest software services order just at the inflexion point of the dot-com bust from Europe. So briefly, India’s global outlook is not US centric.

It is true that India lags behind china in attracting the FDI and in the manufacturing industry, however, one needs to see the Indian story in light of its socio-political dynamics. A contrast of “free for all” India with inward looking China needs to be kept in view. A free democracy has to work keeping a multitude of pulls in balance. The free society’s economy moves at a very different pace than a centralized communist’s.

India, a noisy democracy with diametrically opposing voices, one, with the largest middle class population and 300M people subsisting on under $1 a day. Yet, it has 9000+ companies listed on its stock exchanges gaining about USD 10 billion investments and driving the BSE index to 10,000 points (a gain of 42% in a single year).
The robust growth of GDP (8%), services (51% of total), teledensity (five fold increase in last 6 years to 11.75%) along with the fact that government is investing heavily into infrastructure, rural development and education. All of us here pay an education cess on top of our income tax to enable better educational facilities in rural areas. If you visit India these days, the economic dynamism is nearly "in your face"! It is bit uncharitable to say that "babus" (bureaucracy) are corrupt and have failed. In fact, my personal experience is that the core of India's wake-up call is the sagacity of economic policies of last decade and the new found culture of entrepreneurship. China and India's development is not an either-or zero sum game. China's hasn't blazed a trail because India has failed, and Indian policy is not exactly dictated by global one-upmanship.

best regards
-Rakesh Mawa

Iffin I did not know better, one would think the Indian government is just as corrupt as the American government . . .

hhmmmm

like the saying goes, "who benefits???"

peace

Hi Vijay,

One can see the difference between India and China by visiting Banglore and Shanghai. Chinese are as corrupt or worse than Indians, but the marxist government has executed corrupt public works officials and held a tight control over infrastrucutre. The roads and buildings in Shanghai are like NewYork and the ones in Banglore are like in Uganda.

Doing business in China is tricky , but we don't have a choice. If India can provide the infrastructure and facilities like China, many would prefer to do business in India, you ar eright, but I dont think this visit from bush will change India. Corruption is there to stay.

Dear Vijay

As hard as will be to face and deal with, India would do better the subcontinent were united as a federation -- India, Pakistan, Bangladesh, and the disputed territories.

The only way India can gain an advance on China is to stop diverting its energies towards historic and religion based divisions within a territory that is actually populated by a single people (when viewed from a 50,000 year long perspective, that is). India is still quarreling family-to-family and clan-to-clan, essentially. This is a big waste of time and resources. And while people look towards these conflicts to manage them, they turn away from those who bleed India of her potential through corruption and ineptitude.

Personally, I view Bush's trip to India and Pakistan as a sign that the US has recognized the critical importance of the power of the subcontinent as a counterweight to China in the future. Thus Bush's sudden interest in resolving the Kashmir issue, and his acceptance of India's position as a nuclear power. His stopping in India first is the strongest indicator I can see that my guess on this may be right. To bow first to India, as the core of the subcontinent, is the first step in making a federation of its countries and territories. That Bush (really, his advisors, I'm sure) chose to do this now, is a sign to the rest of the world as to what will be appropriate in the future.

On Shekhar's blog (http://www.shekharkapur.com/blog/) yesterday, he posted an article (Civil War in Iraq) where he proposed that the purpose of the US entering Iraq was to distabilize it into civil war, thus fragmenting the Middle East further.

Well, the countries of the Indian subcontinent need no help from the US with fragmentation -- they've been at it for eons. So now the move needs to start to have all come together as one, to make the most of the incredible riches -- in land, minerals and people -- of the region.

However, before federation becomes a reality, there are things that can be done. If India can advance in "cutting red tape for investors", as you've said China has done, it will be a key move.

Love, Heather

What exactly is FDI??

FDI is an acronym for Foreign Direct Investment, Divya.

Thanks Navin. I racked my brains and figured it might be financial something initiative. But what does it do? Is it a promise that a country will invest in another country? I generally skip economic stuff but this has come up way too often to totally ignore.

Dear Divya,
Acronyms like FDI etc. are terms used very commonly in Economic parlance. And people like me who are in the Stock Markets are used to such abbreviations. No, FDI is not a promise but actual investment that comes into Indian companies from foreign countries. The reason Indian Stock Markets are booming are largely because of FDI from FIIs (Foreign Institutional Investors). When money comes in, the companies can spend that money in expanding their business.

Cheers!
Navin

Hi Navin,
I like that thought .... when the money comes in!

I say, let it come in!
:)
~ Kate

best to let it go out too!

Hi Vijay,
You say,
‘the 10% GDP growth’ India dreams.

Is this truly what India dreams?
~Kate

Hi Katie,
Good to see u. Money should keep in circulation just like flowing water and it then adds to people's wealth. If it remains in lockers, it becomes stale. ;)
Vijay will answer your question, "Is this truly what India dreams?", when he will. But I'll answer it now as I have a few minutes before I go to bed.
India was a rich country before it was colonized by the British and other European countries. So much so, that it used to be called the Golden Sparrow. But the colonial powers sucked out all its wealth and transferred it to their native countries. India got its independence in 1947 and had to face large-scale poverty for the first nearly four decades of its independence. It's only since the nineties that India has started getting back it's lost glory (money). And raising their standards of living has been the number one priority of most Indians. So, if India dreams of achieving 10% annual growth rate in its GDP, then it's a very legitimate dream. View this 10% figure in the light of the fact that the rate of growth of developed countries is only between 1-3% at present.
If you meant from your question that India, which is considered a spiritual country in the West, is getting entangled in Materialism....then you are right. But there is nothing wrong in it. For the road to Spiritualism has to pass thru Materialism.

Cheers & Good night
Navin

Navin,
Thank you!
~ Kate

sweet dreams

Iffin it was me, I would get tired of asking the Anglos what I can and cannot do . . .

But, that is coming from a white boy of course . . .

And as long as India remains such an excellent place to send my job, and to do our geographic dirty-work, India shall always remain just another corrupt third-world satellite.

Am I getting any fighting spirits up yet???

peace

Or do 'we' allow you 'second world' status?

har har har har

Hi Heather,
Great comment.

Peace,
Donatella

Here is an interview with a chinese deputy minister of ecology about economical growth in china.
http://service.spiegel.de/cache/international/spiegel/0,1518,345694,00.html
Is this what you are looking for ?

Dear Donatella

I always love to read your comments. Thanks for reading mine, and the compliment, too.

Love, Heather

Kate,
Yeah, that's what India wants to acheive, and is projecting 8.1% for this year.

Divya, FDI is just a term for direct investments by a foreign company.

Rakesh,
I agree wtih all you are saying. India has everything that China has to be a global manufacturing hub and all things being equal, EU and American markets will mostly prefer Indian goods to Chinese goods, but India never capitalised on the democractic good will.

Heather,
Forget they forming a federation, if South Asian countries can live and let others live, you are looking at atleast 25-50bn dollars to be saved every year just from weapons. Money that can be usefully invested in social programs.

Dear Craig,

Globalization works both ways, when third/second world opens up its markets for cheaper (and sometimes useless e.g. coke and chips!) goods, it also seeks access to first world markets (though we know how well first world practices, what it preaches). Services (IT/dirty geographic works) are easiest to access remotely and are the first ones to outsource. So it is free global market pal! If someone in India can do your job at half/quarter of the cost, your boss is too willing to outsource it. You'd be surprised to know that even Indian companies are outsourcing work to other countries like Ukraine, china (for manufacturing) and others. You are right that this service industry may not be sustainable over a longer run, that is why Indian comanies are taking up core R n D work for first world countries as well! So it is not your job pal, it is a new job created in India and in my last company we had more than a 100 Europeans working full time at the facility and enjoying it! (where else can you get a full time help, driver and royal attention for a under $500!). How about shifting base to India, Craig??

Navin/Divya,
You may have mixed up your FDI and FII. FDI is typically a long term investment in infrastructure projects at a nominal interest rates and FII is in listed stocks and very volatile in nature. I mentioned influx of about $10 Billion in FII and FDI has been about USD6 Billion last year.
Have a look at (bit dated):
http://www.saag.org/papers13/paper1208.html

regards
-Rakesh Mawa