The visiting Singapore Prime Minister Lee Hsien Loong has termed India’s business environment “complicated”. His assessment is based on 4 major considerations: stability, reliable partnership, prospect, possibilities. On these counts he should have instead concluded that India’s business environment is open, encouraging and friendly. The Indian Prime Minister Man Mohan Singh was not wrong when he said that “India is investment friendly”. Foreign investors, however, need to appreciate that India is a big nation, a huge democracy, a strong parliament and independent judiciary. India is not a capitalist country nor a controlled economy. It is a country best for healthy partnership.
Investments in high tech areas have always been welcome in India and shall continue to be so. If India’s policies are imbibed and ingested by any investor, rather than getting carried away by the political statements of individuals, there will never be any difficulty. But those seeking a new set of laws for themselves will be putting their investments in jeopardy, even if the incumbent government might dole out special favours to them. No foreign investor should act in the manner of the Union Carbide (Dow owned). It sets wrong precedents and creates mistrust about foreign companies. On the other hand, there are big foreign companies who started their ventures even before liberalization began in India and have been doing business profitably.
The investment needs and priorities of India will have to be taken into consideration. Here the gestation period may be a little longer, but the returns too will flow for longer periods. Besides, it will strengthen bonds of friendship between the two countries. Just have a look at financial and/or technical collaborations of Indian companies with foreign companies right up to 1980 to get some idea of the scope, reliability of partners, policy stability, prospects and possibilities, which made successful business decisions a functioning reality. The global climate underwent an unwelcome change after the re-organisation of the USSR and the end of the cold war. The end of the cold war changed many things, the worst among them was the world economic order. The results are before all of us: the global economic meltdown. Technology transfers were made complicated and difficult. They were sought to be replaced by FDI(Foreign Direct Investment). In other words, the wheel was perhaps required to be re-invented by other countries moving on the path of economic growth and development. While globalization was prescribed for others, the owners of state of the art technology raised all kinds of trade barriers for others. It would be a very unhealthy World Economic Order where only some countries monopolize the power of technology and others provide only raw material in the form of commodities or trained manpower. If countries like India rose to adjust their policies to meet the new challenges, it was no sign of a complicated business environment.
Singapore is quoted as an example of a very well governed country. Its development story inspires many in India to adopt some of its development strategies and practices. I am sure India would have been similarly placed were it also of the same ( Singapore) size country. However, it is a whole continent. Here the temperatures differ by more than 25 degrees at any given point of time between parts in the North & the South of the country! The diversity is so much that at times one wonders how we manage so much diversity? The countrymen speak more than 170 languages and have different food habits too. These sensitivities have to naturally influence business decisions. But as we are a united nation of more than 1.2 billion, we are united in all our major policies also. Any foreign investor, who invests in India with the objective of development and growth in consonance with the national economic policies, can rest assured the returns will be very satisfying and healthy for both the partners. The quality of investment alone shall matter.