MUMBAI - As further signs of India becoming a
hub attracting global majors, cellular-phone maker Nokia has announced
this month plans to build a US$150 million plant in the
southern city of Hyderabad. Regional demand for handsets
is growing, Nokia says, and so too is the list of Planet
Earth behemoths ramping up presence in India. Intel Corp
and Microsoft have also joined the India party in the
past six weeks, deciding to sink deeper roots in the
country.
The party is getting
better, and bigger. Whether in nations or
individuals, self-confidence triggers forces of attraction, and India now
oozes oodles of it, from a record stock-market bull run over the
past week and a stable new government, to a financial
mood resembling a Tarzan-like chest-thumping in place of
millennia-old diffidence. And the roars hit the rafters
at the New Delhi 20th India Economic Summit that ended
on December 7. "For the first time, there is universal
acceptance that India is riding a wave of sustained
economic growth," Indian Finance Minister Palinayanapan
Chidambaram said. "There is an opportunity called India
and there is an opportunity for you to invest. Seize
it."
A heavyweight list of speakers thought so as
well. World Trade Organization director general Supachai
Panitchpakdi talked about India leveraging its clout
globally. Colette Mathur, India director for the World
Economic Forum, said interest for the India summit this
year was unprecedented. The same week, Russian President
Vladimir Putin came calling for a three-day visit
and said Russia supported India's admission into the
United Nations Security Council.
Co-hosted by
the Confederation of Indian Industry (CII), the summit's
theme this year, "India: The New Dynamics", provided more
scope for paying similar business obeisance. Han Meiqing,
deputy director of the 52-year-old Beijing-based
China Council for Promotion of International
Trade, promised that China would use India as a
base for manufacturing components for electronic goods.
CII spokesperson Jayashri Singh told Asia
Times Online that it's "very significant" that Nokia,
Intel and Microsoft are deepening their involvement in
India. Intel will invest about $40 million over the next
24 months to expand operations in Bangalore, its chief
executive Craig Barrett said last month. That's apart
from the $40 million Intel has invested in the India
Development Center since January 2003. Intel wants to
use the new funding to develop its next-generation
chipsets based on the Centrino mobile-technology platform
released last year for laptops. Barrett told the
media that Intel is also evaluating India as a possible
location for chip manufacturing. Microsoft has also
said that it will open a research laboratory in Bangalore, its
sixth lab and third outside the United States.
"With
the economy on the upswing, India's future looks
distinctly better compared to three years ago," R
Nagaraj, an economist with the Mumbai-based Indira
Gandhi Institute for Development Research, told Asia
Times Online. "There's political stability, continuity
of policies and, from what I can see, the order position
of capital good companies is also improving." He feels
that the Nokia development could signify the next stage of
India's growth, with hardware majors seeking out India.
Nokia's India moves were considered part of "a
generation change" at the Finnish company that is now
being stirred by management upheavals. Three top members
of the group's executive management board resigned last
week.
Nokia upped the ante in South
Asia in good time. In recent weeks, India's
mobile-phones connections overtook the number of landline connections.
The Telecom Regulatory Authority of India (TRAI) counted
46 million mobile phones and 44.31 million landlines
by November 30. India added 1.54 million mobile
subscribers this November itself, compared with 25,000 million
fixed-line subscribers, according to the latest TRAI figures.
Nokia and fellow cell-phone makers could thus look forward to
a ball in India.
The India wave goes
beyond information technology and telecom.
British bio-pharmaceutical major Randox Laboratories,
for instance, wants to open its first overseas center
in Bangalore. Randox, with 550 employees, is one of
the world's fastest-growing clinical diagnostic companies.
Expectedly, in the wake of corporate giants sinking deeper
roots in India comes the reverse brain drain. Foreign
workers wish to flaunt India as part of their CV
(curriculum vitae). High-tech foreign professionals were estimated
to number about 45,000 in India in 2004. Salaries in
India are lower, but that evens with India's profile
getting higher and the lower cost of living. Israeli
high-tech firms, for example, are increasing postings of
their corporate managers to India. They aim to build
qualified teams at cheaper cost. About 50 major Israeli
companies have production, manufacturing and research
and development outsourcing headquarters in Bangalore,
Mumbai and Hyderabad, according to Zvi Kan Tor, whose
law firm specializes in getting work licenses for
corporate executives relocated overseas. Some US business
schools are reportedly offering a working stint in
India as part of their curricula.
Employment-agency professionals say countries such
as India benefit from nervous US immigration
and security procedures still trapped in the September
11, 2001, mindset that makes getting US entry visas nearly as
difficult as getting hold of the Holy Grail. India also seems
to be benefiting from the other US fear called China.
An academic source told Asia Times Online that he saw
US Central Intelligence Agency internal documents
warning US companies to be wary of China, not to put all
their eggs on the Great Wall, and to diversify to avoid
a great fall.
India fits the regional
alternative bill, with current bountiful talk of an
8%-plus growth rate. A just-released International Labor
Organization (ILO) report says productivity growth in
South Asia was 37.9% higher in 2003 than in 1993.
"Besides East Asia, no other region in the world has
been as successful in terms of increasing productivity
as South Asia." But while Pakistan, Bangladesh and Sri
Lanka scored slightly higher productivity since 1993,
the ILO report says India managed to boost the output
produced per person employed by almost 40% within the
same period.
So Finance Minister
Chidambaram can continue to crow. "There is no country
of our diversity that can practice governance the way we
have done," he told the India Economic Summit delegates.
"Despite political volatilities, we have institutional
stability - low interest rates, high forex reserves,
strong currency and a sound regulatory mechanism." The
Nokias and Intels of the world are beginning to agree.
Raja M is an independent writer based
in Mumbai, India.
(Copyright 2004 Asia Times
Online Ltd. All rights reserved. Please contact us for
information on sales, syndication and republishing.)
