Hard Knocks: Crossed signals over FDI

07 Dec,2011

By Anil Thakraney

 

I often wonder why international corporates even want to invest in a messy country like India. Why do they wish to take on all the headaches of operating inside such a chaotic nation. The answer, I suppose, is the market saturation in their own lands, and a raging desire to capitalize on the booming spending populace of this third world nation. Which makes the suits risk an entry into this snake pit.

 

Well, all I can say is that these companies are either gutsy or desperate or both. If I was an international investor, I would quietly park my money in China. Or even Vietnam and Indonesia. And fly over India. Look at all the tamasha that just happened over the issue of FDI in multi-brand retail. And now it’s been put on ‘hold’… an euphemistic way of saying that the government chickened out of the deal. Here are the three messages we just sent to the global businessmen:

 

1> The Indian PM is lamer than a lame duck. He has the vision, but lacks the ability, wherewithal and support to push new projects through. That, not just his rivals and allies, even his own party men can upset his plans at any time.

2> Even if the FDI in retail bill gets passed, which is now a very remote possibility (even Baba Ram Dev doesn’t like it!), it’s left to the various states to accept or reject it. So you could be present in Delhi and Mumbai but missing in Bangalore, Kolkata and Chennai. And when the state government changes, there’s no surety the new government won’t kick you out of the city. So there’s never any hope of stability.

3> Goons of various political parties are always ready for some action on the streets. So to pacify a particular vote bank segment, there’s always a chance that they will strike your super expensive store. Shattered glass panes, damaged wares and bruised business could be just a stone’s throw away.

 

Yes, India is a hot destination for dhandha. But only for the steely, hardy, brave risk-takers.

 

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PS: Quite liked the rich tributes various TV channels paid to Devsaab immediately on the news of his death. The best package was put out by Times Now (pretty much non-stop coverage) and Aaj Tak (the only channel that told us some untold Dev Anand tales). The only disappointment came from NDTV. On a day like that, when the whole nation was humming Dev’s classics, they ran an hour-long, maha-boring prime time show on parliament adjournments. From the sublime to the ridiculous.

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