Polish The Diamond First
Before marketing India abroad, make sure we are really ready for business
Full marks to Prime Minister Narendra Modi on three scores: his oratory, his passion to sell the India story to the West and the diplomatic coup of inviting the US president for Republic Day. I am not sure, however, what his grade would be in two others: one, the premature timing of all this and two, the solo, personality-dependent nature of it all. For this to happen, we need to get our own house in order. We need to make India ready to receive FDI. We havn’t done that, but we have launched a full blown promotional effort. It may attract attention and make investors curious. However, when investors come down and look, they will find the promises were a tad too much and business far more difficult than anticipated. The worst part is next time they will be wary of believing any Indian hype. Unlike Indian voters, who can be (and usually are) wooed emotionally, investor divisions ultimately come down to logic and cold numbers.
I met a billionaire industrialist last week who have me an analogy: “Indian government treats investors like a bahu or a daughter-in-law. They bring her into the house with great pomp and show, but over time, they slowly wring her neck to suffocate her.” With such perceptions what is a charged up marketing campaign going to achieve.
We have another example of this Our tourism department launched an ‘Increadible India’ campaign, blowing up a lot of money on advertising. However, the ground reality was our tourists had a terrible time getting visas, taking safe taxi rides or locating a clean toilet near our attractions. We didn’t fix all that but jumped into advertising. The result. Chine still gets 57 million tourists a year, we struggle to reach 7 million. Just as in FDI China beats us hollow, receiving many time more FDI than India. So, what need to be fixed? Well, first of all we genuinely have to get the government out of business on a systemic level. There is huge difference between a ‘business-friendly environment’ and a ‘business-friendly environment’ irrespective of the government in power. There is massive red tape, a complicated tax structure, a hostile tax department and dozens of permissions. There’s also an overall presumption that people doing business are bad. This needs to change.
The second important issue is the solo nature of the PM’s efforts. Perhaps it is BJP’s political strategy to project only Modi as the face of all positive changes happening in India. However, what works better for global investors is projecting a solid, talented team, all on the same page and with the ability to execute the PM’s vision.
An extract of an article by Chetan Bhagat TOI 29 Nov 2014.