:00:00. > :00:00.her brain function. Two other women were also injured in the attack. I
:00:00. > :00:11.will be back at nine o'clock. Now it is time for Talking Business.
:00:12. > :00:20.As crucial elections take place in the world 's most crucial economy,
:00:21. > :00:25.how will business in India the shaped? I am Linda Yueh and this is
:00:26. > :00:48.Talking Business. A warm welcome to the programme.
:00:49. > :00:54.With highly anticipated elections that could transform the leadership
:00:55. > :00:58.of India, what are the implications or business? Foreign firms investing
:00:59. > :01:03.in India is a major election issue. Global companies have been
:01:04. > :01:13.interested in selling to the world 's second most populous country.
:01:14. > :01:21.Starbucks and Tesco's have become the first foreign global companies
:01:22. > :01:27.in India. Maybe it is a sign of things to come.
:01:28. > :01:30.900 million users and counting. India is the second`largest mobile
:01:31. > :01:35.phone market in the world and telecoms is considered a major
:01:36. > :01:44.success story. But two years back, the country can sort over 100
:01:45. > :01:51.Telecom licenses saying that the government had not followed the
:01:52. > :01:55.rules regarding permits. This Russian group was one of those
:01:56. > :02:00.affected. It had already invested Williams of dollars in India. Like
:02:01. > :02:06.others, it had to reapply for new licences. While things are now back
:02:07. > :02:15.on track, the experience left a bitter taste. If game rules are
:02:16. > :02:21.changing very often, it will not stimulate investors to make
:02:22. > :02:29.long`term investment. So now we need to see stable policies for at least
:02:30. > :02:35.seven, ten years without changes. The government should respect and
:02:36. > :02:40.cherish foreign investors, especially in the telecom industry.
:02:41. > :02:49.And it is not just telecoms that had a rough time. And the government
:02:50. > :02:52.opened up international supermarkets, there was a huge back
:02:53. > :03:00.large. Even though the government pushed through the policy, many
:03:01. > :03:08.Indian states do not allow foreign companies to open up there. Most in
:03:09. > :03:17.the `` most Indians do their shopping in independent shops like
:03:18. > :03:27.these. Retail giants like Tesco C India as a golden opportunity. They
:03:28. > :03:35.have to be careful because the party expected to win the election do not
:03:36. > :03:39.support foreign supermarket chains. The only have to look around the
:03:40. > :03:42.towns, cities and shopping centres to see it is not a gloomy picture
:03:43. > :03:48.across the board. Foreign brands are everywhere. Of looming middle`class
:03:49. > :03:55.and a huge young population means international copy chains are hot
:03:56. > :04:05.property here. `` a booming middle`class. Companies here have
:04:06. > :04:21.teamed up with the global counterparts to ease them through
:04:22. > :04:29.the bureaucracy. What investors need is confidence in a stable
:04:30. > :04:42.environment. Aviation is one industry where that money is coming.
:04:43. > :04:56.It is likely that domestic carriers will increase. More sectors need to
:04:57. > :05:02.convince oversee backers that they should invest. It's still a
:05:03. > :05:30.controversial issue, but other emerging economies like China have
:05:31. > :05:41.been attracting multinationals. Welcome. BJP look as if they are
:05:42. > :05:47.going to win the big elections in India. They said they will question
:05:48. > :05:49.foreign investment. Will that be problematic in an area where
:05:50. > :05:54.traditionally, foreign companies have been put off because of this
:05:55. > :06:03.undecided nests over whether India wants to open up to foreign
:06:04. > :06:13.companies? If they win, we can expect some decisive changes in
:06:14. > :06:18.terms of investor sentiment, both foreign and domestic. Several things
:06:19. > :06:21.could happen. There are a number of really big ticket foreign investment
:06:22. > :06:29.projects that have been stalled for some time. If the new Prime Minister
:06:30. > :06:31.installs some kind of fast track approval procedure for these
:06:32. > :06:36.investments, that could make a big difference. There is also talk of
:06:37. > :06:42.decentralising power and authority to the states, so that might give
:06:43. > :06:47.the states more leeway than they have now to make decisions to
:06:48. > :06:54.attract investment from abroad. Do you think there could be a sizeable
:06:55. > :07:06.change in the way that India views foreign investment? This is an
:07:07. > :07:20.investors delight. The overseas Indian community, which has been
:07:21. > :07:25.eyeing investment opportunities in India are hoping things will change.
:07:26. > :07:34.It is hoped that an investor and climate in India will be created, in
:07:35. > :07:42.the same way it has been in Gujarat. Having said that, I think one point
:07:43. > :07:47.with respect to India is very important to note. India is a very
:07:48. > :07:53.complicated federation. There are lots of things that are connected to
:07:54. > :08:02.its investment climate that is left to the states. The new leader might
:08:03. > :08:08.not be able to make a big difference. That has been one of the
:08:09. > :08:19.reasons that India's industrialisation has lagged behind
:08:20. > :08:23.China. They have been affected by local issues such as land use. I
:08:24. > :08:30.just wonder, is this one of the reasons why India has lagged behind
:08:31. > :08:34.Chinese growth? I think it is. We have two in mind that there are two
:08:35. > :08:41.different models at. China has followed an East Asian model where
:08:42. > :08:47.it has exploited its abundance in cheap labour to attract investment
:08:48. > :08:51.in manufacturing, much of that for export and driven by foreign
:08:52. > :08:55.investment. That is what the South East Asian countries have done.
:08:56. > :09:02.India has not really done that so far, not on an East Asian scale.
:09:03. > :09:07.Although there has been a pick up in investment, it has been for the
:09:08. > :09:14.local market. India has not invested in global chains of export on behalf
:09:15. > :09:18.of multinationals and there are lots of policy blockages, both at the
:09:19. > :09:24.centre and in the States. So it is not just a case of restrictions on
:09:25. > :09:32.as D I, but the other situations that were brought up. Does India
:09:33. > :09:41.have better growth potential than China, if we look to the future. In
:09:42. > :10:00.terms of the manpower were, which will be utilised, we do hear a lot
:10:01. > :10:08.about India's youth market. If it is cultivated well, the results will be
:10:09. > :10:14.phenomenal. India is poorer now than China. India has the advantage of
:10:15. > :10:23.backwardness. The has more potential catch up growth, but China is now
:10:24. > :10:29.demographically going in the other direction. If we look at the
:10:30. > :10:36.potential of India, it has an abundance of cheap labour, it's
:10:37. > :10:42.saving and investment rates, it does have the potential to grow between
:10:43. > :10:45.eight and 10%, where as it is difficult to say that with China.
:10:46. > :10:50.But turning that potential into practice is of course very different
:10:51. > :10:57.and here is where we come across India's shortfalls, which in some
:10:58. > :11:02.respects are worse than what you see in China. Thank you very much
:11:03. > :11:10.indeed. We have now heard from the experts, but what do ordinary
:11:11. > :11:16.Indians think about the reforms? I have been unemployed for a year and
:11:17. > :11:21.it is difficult to get a job. I will be voting for a party that promises
:11:22. > :11:30.jobs. The economic issue for me is the falling value of the currency.
:11:31. > :11:38.It is shrinking day by day and for people with limited resources, like
:11:39. > :11:43.me, who are retired and have a fixed income from say, bank interest, it
:11:44. > :12:01.is very hard to make ends meet. The price rises are affecting
:12:02. > :12:08.everyone and we are not able to afford anything. The price of
:12:09. > :12:13.diesel, if it rises, everything rises. We need someone in power who
:12:14. > :12:20.will see to it that the price comes down. One of the toughest tasks for
:12:21. > :12:24.whoever wins the elections is how to improve the business environment.
:12:25. > :12:30.India is one of the hardest places to start a business as there is a
:12:31. > :12:33.lot of red tape. It is one of the reasons why Indian executives look
:12:34. > :12:43.overseas. Indian businesses have bought British back `` brands like
:12:44. > :12:49.Jaguar and Land Rover. There is no question that India's presence in
:12:50. > :12:54.the global economy has grown. Our correspondent has this report on
:12:55. > :13:00.whether it is set to continue. Made in Wales in the UK, owned by an
:13:01. > :13:09.Indian company, now one of Britain's's largest industrial
:13:10. > :13:13.employers. The UK Chancellor George Osborne has sealed a supply package
:13:14. > :13:21.to secure its energy. India is going global. One widely used measure of
:13:22. > :13:28.India's most international companies is the state oil company, it is the
:13:29. > :13:42.largest multinational with places in 15 companies. Number two is is
:13:43. > :13:47.Tata. Next comes a component that list with 24 factories worldwide.
:13:48. > :13:54.Then there is an IT service provider with offices in 31 countries.
:13:55. > :13:57.Another part of the Tata group has become another big service
:13:58. > :14:01.provider. Its director says Indian companies that want to be the best
:14:02. > :14:07.cannot just stick to their home market. The price point is an
:14:08. > :14:16.important element of the Indian market. I think we have got very
:14:17. > :14:21.high cost discipline and a very high innovation in terms of how we can
:14:22. > :14:27.make a product priced at a certain level, affordable by a much larger
:14:28. > :14:31.population. It is ironic that heavily regulated old Europe is
:14:32. > :14:35.proving more profitable than a home country that the World Bank says is
:14:36. > :14:41.dogged by business hurdles in setting up enterprises, in dealing
:14:42. > :14:44.with construction permits and enforcing contracts. This London
:14:45. > :14:47.economist says this is not to say that Indian companies go
:14:48. > :14:52.transnational because they feel they have no choice. Businesses feel more
:14:53. > :15:01.confident that they can do it alone rather than having to join a joint
:15:02. > :15:06.venture. They are using their own techniques and technology, there is
:15:07. > :15:11.more confidence that technology that has been developed in India is fit
:15:12. > :15:15.for purpose abroad as well. Whether or not Indian businesses continue to
:15:16. > :15:19.feel the heat at home, the evidence is that ever more successful
:15:20. > :15:23.enterprises will go transnational and even a strong wave of
:15:24. > :15:32.free`market reforms at home will be unlikely to stem the tide. It is not
:15:33. > :15:36.just India's influence in terms of business and economic son the world
:15:37. > :15:42.economy, it other influencers are going. Fashion and culture have gone
:15:43. > :15:49.beyond its borders. What is India's place in the world? Is it a neutral
:15:50. > :16:07.player? What about its cultural reach? Joining me to discuss this
:16:08. > :16:15.are my guests. Welcome to you. What is India's role in the world? Is it
:16:16. > :16:25.the other Asian giant, if you do not like China, here is India? That is
:16:26. > :16:29.part of it. India's role as the world's largest democracy, a great
:16:30. > :16:34.success story. The last five years have been a period of some weakness,
:16:35. > :16:41.our sluggishness, with stagnating inflation. The democratic exercise
:16:42. > :16:48.under way is a chance for India to re`gnu itself as it does every five
:16:49. > :16:54.years. When we look at India, some people say it has great growth
:16:55. > :17:11.potential, but it never seems to quite realise it `` re`gnu. ``
:17:12. > :17:16.re`new. I think that the result is something more sustainable. When you
:17:17. > :17:22.look around, what do you think the place of India should be? Is it as a
:17:23. > :17:30.power broker, the neutral player between the US and China? What
:17:31. > :17:35.should its place be? One of its roles is to be the beacon of
:17:36. > :17:41.democracy and perhaps to build a coalition of democracies in Asia and
:17:42. > :17:48.be an example of the success of what democracy can achieve, by providing
:17:49. > :17:55.human rights to all its people, while at the same time generating
:17:56. > :18:04.economic growth and prosperity. Right now, this election campaign
:18:05. > :18:08.has been about the economy. They have been building a vision of
:18:09. > :18:13.economic transformation and a liberal economic approach with a
:18:14. > :18:21.small but effective government, that has been his model for India. It has
:18:22. > :18:29.really resonated with the electorate. Do you agree? With
:18:30. > :18:35.India, this is the opportune moment for it to set an example of how
:18:36. > :18:39.growth should be handled. Economic growth in a single`minded way of
:18:40. > :18:44.looking at just a number, I feel that is the wrong way to approach
:18:45. > :18:50.it. It has to be inclusive and equitable. Small governments
:18:51. > :18:56.generally speaking mean that there is going to be a big social safety
:18:57. > :19:04.net. That is almost by definition not buy back kind is. Absolutely. If
:19:05. > :19:12.you look at these results `` not what this is. You have 10% growth,
:19:13. > :19:21.but the rest of the country does not have that, that was one area. My
:19:22. > :19:26.point is, if you are going to take what happened in one state, that had
:19:27. > :19:32.an inclination to be more business driven anyway, and extrapolated for
:19:33. > :19:37.a diverse country, that is a recipe for trouble. You cannot say you are
:19:38. > :19:50.running at country like our company when you need to run it like a
:19:51. > :19:56.democracy `` a country, a company. What is the social return? What is
:19:57. > :20:03.the environmental return? Between India and China, China had this
:20:04. > :20:08.growth, but look at where China is today. The rivers are polluted and
:20:09. > :20:13.people cannot breathe the air. Was that growth worth it? Is it
:20:14. > :20:22.sustainable? Are people happy? I do not think so. It is about the soft
:20:23. > :20:30.power. Does India have that potential? Could we see Bollywood as
:20:31. > :20:36.dominant as Hollywood? Good greasy IT coming from India to be as
:20:37. > :20:45.competitive as anything in Europe `` could we see. You have to be the
:20:46. > :20:50.leader for everyone. If you are going to do that, if that translates
:20:51. > :20:56.into soft power, it has to be something that people aspire to.
:20:57. > :21:01.That aspiration has to be something that they feel they are part of. I
:21:02. > :21:09.think that is a very important component. For India's influence in
:21:10. > :21:17.Bollywood, it will always be there, it is the culture. There are people
:21:18. > :21:26.all over the world. Does it actually jump to other cultures as well, that
:21:27. > :21:36.is the key. Bollywood has remarkable reach. If you talk to a taxi driver
:21:37. > :21:40.in Beijing, they will tell you about some long forgotten movie star from
:21:41. > :21:54.India and even more so in Russia. Egypt as well and Morocco. There is
:21:55. > :21:58.soft power there. I have a feeling that this debate reflects quite a
:21:59. > :22:01.lot of the discussions around the Indian elections and what will
:22:02. > :22:11.happen and what that means for India and the rest of the world. That was
:22:12. > :22:18.a nice round`up. Thank you. India's influence in the world is likely to
:22:19. > :22:22.grow. They are integrating into the world economically and culturally.
:22:23. > :22:26.Where India goes hinges on the outcome of the crucial leadership
:22:27. > :22:30.elections and the results will be revealed in early May after five
:22:31. > :22:35.long weeks of voting in the world's biggest democratic elections. That
:22:36. > :22:40.is all we have time for. Check out our website and join us next time
:22:41. > :22:53.for more Talking Business with me Linda Yeuh.
:22:54. > :23:01.Good evening. We are seeing this cloud bringing rain across England
:23:02. > :23:06.and Wales. It is weakening. There are some showers into the north and
:23:07. > :23:12.west of the UK, it will be breezy. For most places tonight, the skies
:23:13. > :23:14.will clear and with those clear skies it will turn cold with