The Indosphere: Should we trust Made in India?

SHOULD WE TRUST INDIANS?
URL - http://mikeghouseforindia.blogspot.com/2013/08/the-indosphere-should-we-trust-made-in.html


I have been planning to do my bypass surgery in India, one of the questions I am answering frequently is the expression of doubt about Indian Doctors. My head hangs in shame that my fellow Indians are expressing this.

My counter is, I am an Indian, and I am on par if not excel than most people in my field (Pluralism discourse or Management Consulting) - how can I even underestimate my fellow Indians? Whether the Doctor is in India or here in the US, he or she will be the same doctor. We may have greater tools here, but the the care would be the same.

This is something we need to seriously think about, and ask fellow Indians - if they are good in what they do,  then we need to ask them, if they were to do the same job in Bangalore, should we discount them and their work because they are in India?

It is time for us to think about this.

Jai Hind



Mike Ghouse
http://MikeGhouseforIndia.blogspot.com

The Indosphere

Made outside India

As growth slows and reforms falter, economic activity is shifting out of India

Aug 10th 2013 | COLOMBO, DUBAI AND MUMBAI |From the print edition

INDIA’S diaspora of 25m people is something to behold. In colonial times Indian labourers and traders spread across the world, from Fiji to the Caribbean. A second wave of Indians left between the 1970s and mid-1990s, when the economy was in a semi-socialist rut. Migrant workers rushed to the Persian Gulf and South-East Asia, then booming. Educated folk and entrepreneurs fled to the rich world. Plenty struck gold, including engineers in Silicon Valley and Lakshmi Mittal, boss of ArcelorMittal, a giant steel firm. Often they now have little to do with India beyond sending cash to relatives and groaning as the once-vaunted economic miracle fades.

Yet alongside this distant diaspora, a network of people and places is more directly engaged with India’s economy. Its most conspicuous element is the plutocrat who owns firms in India, but like his Russian and Chinese peers shops in Paris, educates his children in America and Britain and sometimes has foreign citizenship: Cyrus Mistry, the boss of Tata Sons, India’s biggest firm, has an Irish passport. At the network’s core, however, is not the gilded elite but offshore hubs, including Dubai and Singapore, often with sizeable Indian populations and with their own economic strengths.

The idea that some things are better done abroad is hardly new. Hong Kong was a gateway to imperial and then Red China. In 1985 Yash Chopra, an Indian film-maker, led a trend of shooting Bollywood “dream sequences”—in which the hero and heroine sing amid meadows and snowy crags—in Switzerland. The Alps were easier, cheaper and safer than the more familiar location of Kashmir.

Film buffs now view Swiss dream-sequences as cheesy, but India’s big offshore hubs are more in fashion than ever. They present a mirror image of India’s red tape, weak infrastructure and graft. Dubai is a prime example. For long-haul flights Indians prefer its airline, Emirates, to their own. More than 40% of long-haul journeys from India go via a non-Indian hub, often in the Gulf. Indian airports no longer make grown men cry (Delhi’s is first rate), but few foreign airlines want to make them their base. Indian planes are usually serviced in Dubai, Malaysia and Singapore, reflecting a history of penal taxes in India and high customs duties on imported spare parts.

A stroll round Dubai’s gold souk, a glittering warren of shops and discreet offices, housing bullion worth $3 billion-4 billion, points to another specialism—trading jewellery as well as precious stones and metals. A third of demand is from India, reckons Chandu Siroya, one of the market’s big participants. Indians go to Dubai to avoid taxes at home and because they trust its certification and inspection regime.

Dubai’s ports, air links and immigration rules also make it a better logistical base than India. Dawood Ibrahim, a Mumbai mafia don, ruled from Dubai by “remote control” before eloping to Pakistan in 1994. Since those wild days legitimate Indian firms have thrived in Dubai. Dabur, which makes herbal soaps, oils and creams, runs its international arm from there. Dodsal, which spans oil exploration in Africa to Pizza Huts in Hyderabad, is based in the emirate. Its boss, Rajen Kilachand, moved from Mumbai in 2003. “Dubai is a good place to headquarter yourself,” he says, adding that a “Who’s Who” of Indian tycoons has a presence. Dubai is gaining traction in finance, too. Rikin Patel, the chief executive of Que Capital, an investment bank, says Indian firms are raising debt in Dubai to avoid sky-high interest rates at home.

Treasure Island

About 5,000km (3,000 miles) south of Dubai lies Mauritius, an island so beautiful that Mark Twain said God had modelled heaven on it. About half its people are descended from labourers brought from India when Britain ruled both places. It is the main conduit for foreign investment into India with 30-40% of the stock of foreign capital sitting in funds domiciled in the island. A 1982 tax treaty allows investors using Mauritius to pay tax at the island’s rate (which, in practice, is zero), not the Indian rate. Foreigners also like the stability of Mauritius’s rules and its army of book-keepers and administrators. Many investors also use “P-Notes”—a kind of derivative with banks that gives them exposure to Indian shares without having the hassle of directly owning them.

Sri Lanka has testy relations with India, but Colombo is a vital port. About 30% of containers bound for India go via intermediate hubs fed by small vessels, either because big shipping lines do not want to deal with India’s customs regime or because their ships are too big for the country’s ports. About half of this trans-shipment business happens in Colombo. Its importance could increase now that a big extension to the port there has just opened. The project was funded by a Chinese firm probably too polite to admit that its investment is partly based on the idea that India’s ports will never be world-class.

A roll of the dice

Sri Lanka also wants to develop a casino industry. Gambling is illegal in almost all India, so people use offshore bookies or the internet. James Packer, an Australian business dynast with a gambling empire in Macau, is said to be considering creating a casino resort in Colombo aimed at attracting Indian high rollers.

The largest hub for Indian trade is probably Singapore. It is the centre for investment banking, which thrives offshore, owing to the tight regulation of India’s banks and debt markets. Reflecting this, the global exposure to India of Citigroup and Standard Chartered, the two foreign banks busiest in India, is 1.9 times the size of their regulated Indian bank subsidiaries.

More: http://www.economist.com/news/international/21583285-growth-slows-and-reforms-falter-economic-activity-shifting-out-india-made-outside