By Swapan Dasgupta
Over the past few days, many have remarked on the curious spectacle of TV anchors in colourful woollies talking to Indian notables in their cashmere overcoats about Indian issues amid idyllic snow-covered surroundings. Don't get me wrong. There is nothing wrong in interrogating Montek Singh Ahluwalia, Kamal Nath or, for that matter, Rahul Bajaj and Uday Kotak on the Indian economy and the "governance deficit". But why not do it in Delhi and Mumbai? Must we literally reduce the annual World Economic Forum jamboree in Davos to an 'India adda'?
These are not the envious and insolent gripes of someone who has never had the privilege of visiting Davos during the Rich List season. There is a larger issue. The WEF meet in Davos isn't by any reckoning an India seminar. While India isn't the incidental footnote it was in the early-1990s, global investors don't also see it as the obsession it was in 1492 when Columbus embarked on his search for the elusive western sea-route from Europe. "Amongst the delegates", wrote stockbroker Paul Fletcher in a blog from Davos, "there is a feeling that if we hear another session on demographics or China versus India we may protest."
Such a forthright disregard for the so-called 'India story' may understandably offend nationalist sentiments and bring on the West versus Rest polarisation that keeps many public intellectuals in business. But the harsh truth is that India has been sold, re-sold and re-re-sold in so many samosa and Sula evenings that it has lost novelty. The Davos lot is aware and excited by India's potential—who wouldn't be at the thought of a 91 million strong middle class by 2030? They are also aware but a little less moved by the realisation that calculating opportunity costs aren't among the inherited attributes of the timeless "ancient civilisation, new nation" (India's self-description in the billboards of Davos).
The irritation at the mismatch between words and deeds has begun to show: the latest report by the Reserve Bank of India shows that foreign direct investment in India declined by 36 per cent between April and September 2010 compared to the same period in 2009. This decline coincides with FDI growth of 17 per cent in non-Arab Asia. Whispers from North Block suggest that thanks to a rampaging Minister of Environment the story for the next six months may be equally discouraging. As talk of a "governance deficit" becomes all-pervasive, "India inclusive"—another promotional line in Davos—is increasingly being seen as the eyewash for 'India elusive'.
It is not as if those quizzed by the Indian media on the 2G licences and uncompetitive interest rates are unaware of the emerging wrinkles on the face of Bharat Mata. It is an open secret that the mood in Indian business circles is distinctly downbeat. They know that the 'India story' is meandering.
Yet, Davos 2011 has an India story, but a hidden one. On the face of it the CII is putting on a brave face, hosting the 'India adda'(which, incidentally, in colloquial Bangla, implies a convivial but purposeless interaction) and doggedly selling India as a worthwhile alternative to both China and the troubled West. As a collective, Indian business is doing its patriotic bit. At the level of the corporation, however, its Davos mission is different. The networking of corporate big-wigs is guided by a sharp eye for opportunities outside India, not least, in the West. India Inc is hedging its bets.
The trend is unmistakable. According to a Columbia University study, Indian companies invested more than $75 billion overseas between 2000 and 2010. This included some $14 billion invested by the Tata group in the United Kingdom. Indian companies are now the second largest investors in UK, the third largest in Germany and their investments in Indonesia may touch $15 billion. RBI figures reveal that Indian FDI in British Virgin Islands rose 102 per cent to touch $542 million in 2010; and in the Channel Islands it amounted to $516 million in 2010 against a modest $44 million in 2009. And these are just the 'white', kosher investments.
The reasons why Indian business is exploring alternatives to India are well known. For the past few years, the business environment has become increasingly wayward and unfriendly. From growing infrastructural bottlenecks to red-tape and corruption, the cost of business is becoming too expensive and troublesome. The larger stability needed for sustained growth has been replaced by social tension and political venality. Against these hassles, even the high-cost West seems tempting.
Global capitalism has a sharp antenna. Its stalwarts may leave Davos and its adda with a quirky poser: the future could belong to Indians but does it belong to India?