Indian Business Growing Despite Mumbai Attacks
Fugitives From The Financial Wars Boost India's Business
Dec 16, 2008
Recently, Standard and Poor analyst Takahiro Ogawa announced that Mumbai's terrorist attacks would not affect the sovereign ratings on India (BBB-/Stable/A-3) and India's Minister of Commerce and Industry Kamal Nath shrugged off any possibility that they could hinder the country's economic growth. Although foreign institutional investors withdrew $13 billion in 2008.
However, the Economic Times (www.economictimes.indiatimes.com) is calling on leaders to determine a strategy to make businesses safer and AFP reports that Ganesh Gupta, President of the Federation of Indian Exporters Organization ( FIEO) is worried that export-oriented businesses are seeing fewer foreign buyers. "Main buyers are not coming to India and prefer to travel to China and Taiwan", he said. Added Ajay Sahaini FIEO Director General, "Our exports growth is expected to be 15 per cent for the year to March 2009 compared with 28 percent last year." Exporters of jewelry, textiles and handicrafts are most affected.
Building Bridges
Watching the rest of the world going into meltdown, India is hard at work building bridges with countries such as Viet Nam. At a November 25 Ho Chi Minh City forum organized by the Vietnam Chamber of Commerce and Industry and the Federation of Indian Chambers of Commerce and Industry, Indian businesses in such areas as chemicals, hydropower, mineral exploitation and processing, steel, pharmaceuticals, information technology, agricultural product processing and energy worked to establish relationships with Vietnamese partners. According to www.nhandan.com.vn "Two-way trade between Vietnam and India reached US$ 1.5 billion in 2007 and this figure is expected to hit US$ 3 billion by 2010."
Busily Buying US Companies
While it knows and often reviles India for its call centers, most of the world has not realized that the subcontinent's businesses have been busily buying US companies. The Wharton School's Saikat Chauduri explains, " Over the last decade, Indian firms - most visibly in information technology but also in areas like auto components, the energy sector and food products have been slowly building up to become emerging multinationals." He adds that the outsourcing phenomenon exposed Indian managers to western companies and management practices.
Highly Educated Returnees
As well, India is seeing a reverse "brain drain" with young, highly educated workers such as Pankaj Dinodia returning from the United States, Europe and Canada and the recruitment of English workers to help staff the huge call center industry for which it is renowned. English voices, it is argued, will mollify callers angry at jobs being offshored to the subcontinent.
The thousands of highly educated returnees, often coming from the flailing financial services sector are moving into key positions in major Indian corporations. Their bosses cannot believe their good luck.
"Companies here can now hire bankers with the kind of experience we never could have dreamed of employing before the crunch", said Dinodia in an interview with the Globe and Mail. He is working for the family firm in Delhi. While they are glad to have him back, some returnees' parents are shaking their heads over the phenomenon. The problem for them is that they left India for a better life in their chosen countries so their offspring could have the chance to climb the social ladder. They do not know what to make of their children returning to the old country.
The Country Will Continue To Grow
Despite official protestations that the recent attacks in Mumbai are unlikely to affect companies doing business in India, some are reporting foreigners' reluctance to buy from exporters. However, returning highly educated workers are helping boost businesses and India is reaching out to its neighbors for business partnerships. The indications are that the country will continue to grow.
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