| |
NRIs: Not part of the Indian family just
yet
By Indrajit Basu
KOLKATA
- Ten years back, when noted Indian scientist R A
Mashelkar was delivering a lecture at General Electric's
research and development center in New York, sitting in
the audience was a non resident Indian who was a senior
official at the company. Along with him, he had brought
a few more officials of the US giant, just in case they
saw business potential in what Mashelkar had to say.
The originally scheduled hour-long lecture
extended for hours, and at the end of it, Mashelkar was
successful in bagging a project from GE that 10 years
later culminated in a research and development center
for GE in India which today employs 1,200 scientists,
researchers and engineers.
Although it took
India years, the country has finally realized that, if
that is how much just one NRI (as non resident Indians
are commonly known) can do for India, its 20 million
strong overseas Indians dotting the globe who earn at
least US$160 billion annually, which is more than a
third of India's national income, can well change the
face of its economy.
With that in mind, India's
Ministry of External Affairs organized its first ever
NRI jamboree in New Delhi last week to convey in the
words Prime Minister Atal Bihari Vajpayee that even if
India doesn't need the riches of NRIs, "it needs the
richness of their experience and global exposure".
At the end of the three-day jamboree that was
attended by 2,000 NRIs, including quite a few celebrity
ones, the country was successful in conveying that
though advantages from attracting NRIs for India are
multiple, the flip side is equally attractive. NRIs need
new investment opportunities and, like the Chinese
expats, they should invest in their country of origin
for maximum returns.
However, the jamboree also
revealed an uncomfortable fact. According to some who
were there, the Indian Diaspora is ready to contribute
to India far beyond the billions in remittances and
deposits. But archaic policies are holding back the big
buck investments in business, research and philanthropy.
"For the first time, the Indian government is
looking outward," said Karan Bilimoria, an NRI
brewery-owner in the United Kingdom. "But we need to go
beyond talking. I have been trying to set up a brewery
in India and I have the capital. But there is so much
red tape, regulation here."
And, according to
Professor Bhikhu Parekh, a member of the House of Lords,
UK, "Lasting relationships are not built on love and
sentiments." He added that "it has to be a dialogue
among equals. Lasting relationships are built on a
realistic assessment of expectations on both sides."
NRIs say that right now there are three major
concerns: How serious is India about involving NRIs? The
seriousness needs to be shown with deeds, not just with
words; How soon can India make its decision-making
process transparent? And, how consistent are the
policies?
According to the general view, barring
a few issues, their gripe is the same as that of any
Indian investor; bureaucratic hindrances, unclear and
inconsistent policies and poor infrastructure.
To them, it is not the special treatment meted
out to them that is required but, as Saurabh Srivastava,
a US based entrepreneur, put it, "If India combines its
appeal as homeland with its lure as a good investment
destination, the natives will plough back money."
Srivastava added that while big policy reforms
may take time, a few quick measures will help increase
NRI participation in the short run. Citing an instance,
Srivastava said that presently, if an Indian firm is
taken over by a venture capitalist through stock trade,
all tax exemptions granted to the company are withdrawn.
The result: while Indian start-ups are dying for the
lack of funds, venture capitalists with funds are
reluctant to buy them because of tax obligations. In the
bargain, everybody loses - the government the
entrepreneur and the capitalist.
Similarly, the
biotech business in the US has many Indian
entrepreneurs. Most of them want to invest in India, but
hesitate because of laws on intellectual property
rights. "The challenge in India is primarily IPR
protection," says Vipin Garg, CEO of Tanzyme, an
Alabama-based biotech start up which wants to do stem
cell research in India.
NRIs add that as
entrepreneurs, they will enter only those sectors they
know and have experience in - like telecom, software,
biotech. So it may be unrealistic to expect them to
start big infrastructure projects or participate in the
privatization of state-owned companies.
But as
investors NRIs can be tapped for all sectors that need
funds. For instance, an NRI will invest in a road
project if the returns are good. Given the global
slowdown and lack of investment opportunities abroad, if
small policy and administrative hassles are removed,
NRIs will flock in both as entrepreneurs and as
investors.
Philanthropy is another area where
NRI contributions can be raised infinitely from its
current levels. Barring a few individual initiatives,
there has not been an organized and credible medium for
NRIs to fund social work in India. "In the Diaspora you
have a huge demand to give back. But they do not know
when, where and how to give," says Sushmita Ghosh,
president of a Washington DC-based NGO.
However,
despite their grievances, NRIs admit since 1991, prior
to which NRIs had little opportunity to invest in India,
the investment clime has changed considerably in the
country. For instance, according to reports, the share
of direct investments by skilled NRI entrepreneurs to
the total inflow of NRI money has increased by 15
percent over the past 10 years. "But the quantity and
quality of NRI contribution is still way short of what
it could be," said an editorial of India's top financial
daily, the Economic Times.
Nevertheless, the
extent of the jamboree's success could perhaps be
fathomed from an NRI comment heard at the end of the
show, "We were here for three days. In these three days,
we were made very welcome, but as guests, not as members
of the family."
(©2003 Asia Times Online Co, Ltd.
All rights reserved. Please contact content@atimes.com
for information on our sales and syndication
policies.)
|
| |
|
|
 |
|
