A soaring economy and crumbling trade barriers are making India a “must visit” destination for foreign politicians and executives. The crush of visitors, often first-timers but also companies seeking to expand their existing operations here, lands daily.
They all hope to sign deals, find local partners, sell their wares or just soak up the contradictions that characterise the world’s largest democracy, a singular melding of chaos and opportunity.
Simple demographics make India impossible to ignore, and the slowdown in the United States economy adds to its appeal.
About half of the country’s 1.1 billion people are under 25, and its rapidly expanding middle class is already estimated to be as large as the entire population of the United States. A rocketing stock market and a fast-growing class of the superrich add to its appeal.
Trade experts compare the rising tide of interest to the wave of outsiders who flooded China a few years ago.
This year, Felipe Calderón Hinojosa became the first Mexican head of state to visit India in 22 years. Angela Merkel, the Chancellor of Germany, President Luiz Inácio Lula da Silva of Brazil, and Henry M Paulson Jr, the US Treasury Secretary, have all paid their respects.
But official delegations are arriving from unexpected corners of the world, too. On a recent typical Monday in New Delhi, the government played host to US businessmen from Minnesota led by Gov Tim Pawlenty, a Romanian delegation led by the senior counsellor in the ministry of small and medium-size companies, and Finns led by the minister of trade and development.
The driving factor
Privatisation of major industries, a quickly Westernising, youthful population and the prevalence of English draw a wildly diverse group of prospectors. On a recent visit to Mumbai, Donald Trump Jr pledged to invest in real estate there, Jaegermeister held parties in New Delhi to introduce consumers to its herbal liquor, Prudential Financial partnered with the Indian real estate giant DLF to create an asset management business and Fiat announced tentative plans to import the Alfa Romeo.
India is like the “proverbial bus in today’s business world,” said Suhel Seth, Managing Partner with Counselage India, a New Delhi-based branding consultancy. “No one knows where it is going, no one knows whether there is space on it for them — but no one wants to miss that bus.”
Given the vast and varied interest, Indian business leaders can sound overwhelmed. “Iceland is suddenly on our radar screen,” said Supriya Banerji, the Deputy Director General of the Confederation of Indian Industry.
“Malta is coming in and Cyprus is clamouring for us.” So are Trinidad and Tobago, Uganda, Vietnam, Kazakhstan and Mozambique, all of which have sent delegations.
Negative aspects
It is too soon to tell what impact the visits will have economically. They rarely yield immediate results, and sometimes they produce negative reactions.
India’s mix of poverty and areas where vast, fetid slums edge newly refurbished international airports and barefoot children beg outside of $500-a-night hotels, has left more than one Western visitor aghast.
The realities of India often surprise even first-time visitors who have studied the country. Signs of social upheaval -- strikes, dangerous roads and electricity that flickers off even in the most luxurious hotels -- are common.
In spite of some concerns, most visitors are optimistic about India’s future and the opportunities it offers their companies. To date, “trade has been rather modest,” acknowledged Asko Numminen, the Finnish ambassador. In Finland, Numminen said, “we are speaking about the ‘India phenomena’.”
He said companies, universities and research centers were looking toward India because it had the “biggest pool of human resources in the world.” Since the beginning of September, Numminen has travelled twice to Chennai to open factories for Finnish companies, and Finnair now has 12 direct flights a week from Helsinki to India.
Royal visits
Members of foreign royalty are also making official visits to India — even royalty whose ancestors were involved in colonisation of the subcontinent centuries ago.
Queen Beatrix of the Netherlands arrived in October, with eight of her country’s most important chief executives, on her second visit to India.
Warner Rootliep, General Manager for the Air France-KLM Group in the region, said the trip allowed the executives a “great opportunity to raise some questions directly to the prime minister and other ministers present.”
India remains in China’s shadow. Because of weak infrastructure, a fractious political climate and other hurdles, India’s foreign trade and investment figures are dwarfed by China’s, where foreign direct investment was nearly $70 billion in 2006.
But many foreign companies and governments increasingly equate the two when they talk about the growth markets of the future.
The government here expects foreign direct investment to grow rapidly next year, to some $30 billion, from $19.5 billion, and the economy to grow at 9 per cent for the third year in a row.
And India definitely tops China on one front. Because of increasing business travel demand, American Express predicts, hotel room rates here will increase more than anywhere else in the world in 2008: 34 per cent to 38 per cent for midrange hotels and 38 per cent to 41 per cent for the best hotels.
Source: New York Times News Service
