12/04/2014 Talking Business with Linda Yueh


12/04/2014

Similar Content

Browse content similar to 12/04/2014. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

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.

Download Subtitles

SRT

ASS