July , 2020
The contradictions of Indian Business
11:59 am

Buroshiva Dasgupta


A lot of patriotism is generated in banning the Chinese apps in India. The provocation will naturally lead to loss of trade with China; one of India’s largest trading partners. When the Prime Minister at the India Global Week announces that India is rolling out ‘the red carpet’ for all global companies to come and establish their presence in India, one can figure out a strategy. India is trying to take advantage of the new era of geopolitical tensions between the US and China. The world is wary of China, including the erstwhile close trade allies like Canada and Australia.

But mere announcements and speeches will not bring business. The “ease of doing business” is still not conducive in India, though the prime minister announced in the same meeting that ‘deep structural reforms’ will continue in India. On one hand, the Prime Minister is pushing to make India the centre of global supply chain and on the other companies like Amazon and Walmart are facing investigations from the Competition Commission of India (CCI). CCI, the local antitrust body, has highlighted a wide gamut of issues, including the arrangements between smartphones vendors and e-commerce platforms to sell certain handsets exclusively online, and e-commerce firms apparently giving preferential treatment to certain sellers, and said these allegations merit an investigation. The CCI has also ordered the director general to investigate whether Amazon India and Walmart are offering deep discounts on their marketplaces and promoting their own private labels.

These investigations are being done after some Delhi-based micro and small sized businesses approached the CCI. These contradictions within Indian business can be tackled well if a clear cut policy is in place. Amazon for example has invested five billion dollars in its Indian business. Walmart has acquired Flipkart for 16 billion dollars. These retail supply-chain giants are serious in doing business in India. Clamping an investigation against them is no ‘ease of doing business’. Instead, the government should form a clear cut policy so that the micro and small businesses can take advantage of these global marketing platforms. For this we need encouragement for producing better quality, if not world class, products.  Global platforms like Amazon and Walmart could take the Indian product to the world market.  Instead of creating obstructions, the small businesses could transform these global platforms into a great opportunity. But that needs a policy change and a firmness to implement it.

It is all very nice to dream big:  that foreign investment will pour into diverse areas like defence, logistics and space. But FDI is an elusive animal and it always looks for the ground realities. True the global anti-China sentiment is an advantage. But one has to really slog to become ‘atmanirvar’. Are Indian products worthy of being sold in the global market? We really have to think deep here. We need an attitudinal change to be competitive globally. We many describe China as a ‘rogue’ country; but we cannot wish away the hard work – and strong policy changes – that made China what it is today.

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