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