India At Davos, Business World At Davos
Timing is everything. And Prime Minister Narendra Modi seems to get it right very often. His presence and opening address at the World Economic Forum’s annual meeting in Davos coincided with cheery news about global and Indian economy.
The International Monetary fund’s assessment about global growth returning is bringing cheer to investors gathered at Davos. IMF has estimated that the top seven economies of the world India, Japan, UK, US, China, France and Germany grew by 1.7% last year. For India alone the growth forecast for 2018 is more than 7.4%.
The global economy will grow 3.9% which indicates that recovery is more comprehensive than anticipated.
India seems to be leading the pack of this rebounded growth and Prime Minister Narendra Modi emphasized it in his conversations with business leaders in Davos. “The Prime Minister’s address and conversations show that India is doing business and not talking about it,” Chairman of Vedanta Group Anil Agarwal told me at Davos.
“For global companies India is a must now. Mr Modi has been a personal brand builder for India. He is seen as a strong leader of modern India,” Peter Schwartz, Senior Vice President of global tech company Salesforce told me. Salesforce is expanding aggressively in India as it see rising demand for technology solutions.
In his meeting Mr Modi was direct in his answers to the queries raised by investors. While he admitted the challenges that remain at certain levels in the government, he promised to continue his effort to make life easier for domestic and global investors. Mr Modi laid extra emphasis on the new generation of entrepreneurs of the country.
The global investor community has become far less skeptical of the India story. “We look at India as a massive growth market. Its growth potential is accelerating,” Martin Mackay, President Asia Pacific of CA Technologies told me in a conversation at Davos. The $4 billion technology company is shifting gears as it expands its presence in Asia with special focus on India.
The sentiment is marked by the PwC CEO survey released at Davos. Over 57% of the 1300 CEOs surveyed were positive about growth in 2018. The rise in global markets along with GDP figures are allowing the CEOs to overcome their pessimism about growth. The survey also boosted India’s rank as an investment destination to among the top 5 in the world. US, China and Germany were the top three. France and India were in position 4 and 5. India rose a few notches to edge out Japan from the top 5 slot.
From the Indian perspective, this is a good time to position itself as an investment destination. Mr Modi’s call for a new globalism reflected his focus on new India. He spoke of a collaborative atmosphere where countries would come together to counter climate change, terrorism and social inequity.
The repackaging of India as more than just an investment destination is a strategic move by the prime ministers. Investors feel better about entering a country that is seen as a leader in non-business issues. India’s leadership on climate change marks its maturity in stark contrast to the US which is in denial over environmental issues. By invoking the India philosophy of Vasudev Kutumbakam (the world is a family). Mr Modi also underlined India’s distaste for disputes and conflicts with other countries. Investors worry about China since it has geographical disputes with many nations. Harvard University’s Prof Kenneth Rogoff told the audience at Davos that China is showing signs of financial crisis.
In contrast India appears more stable, steady and secure economy for most investors. Mr Modi’s timing to participate in Davos and invite investors could not have been better.
“The image of India will be further enhanced if the government accelerates the implementation of its policies and promises. For domestic and global investors, this is the final proof of a country’s growth potential,’’ says Sandeep Naik, Managing Director of General Atlantic in India.
In 2006, India made its mark by a global campaign to position itself as the “world’s fastest growing free market democracy”. Since then India’s positioning has changed. The previous campaigns were created and run by India Brand Equity Foundation jointly run by the government and industry bodies. India’s brand been well established, the focus is now on generating and engaging with foreign investors. In the new approach, the government is focusing on specifics and numbers. Invest India has identified key sectors and regions for investment promotion. From general branding, India has sensibly moved to practical and operational steps.
At the regional level too, a similar approach has been adopted by the two states that have been offering themselves as ideal investment destinations within India. Mature investors realise that working with state governments is important for ground level action. This year Maharashtra and Andhra Pradesh maintained their presence at Davos. Led by Chief Minister Devendra Fadnavis, Maharashtra has also invested in an ad campaign. The Maharashtra Industrial Development Corporation is the key agency driving conversations with investors. Davos buses sport Maharashtra’s promise, “Think in Davos, Switzerland. Set up in Maharashtra, India.”
AP CM Chandrababu Naidu hosted hosting technology conversations to promote the state as a tech hub. AP Hosted a session called “Converse with the Future”, an interactive session with technology pioneers. The focus on technologies of tomorrow saw about 10 smart start-up pioneers make presentations on their innovations even as the government assessed how best to deploy them in AP. The Economic Development board of AP partnered with BCG Digital Ventures and TheIdeaworks digital agency for the second edition of the technology pioneers program. AP government plans to establish this as a consistent and regular conversation at Davos. Mr Naidu surprised the audience by doing a live video link with a village group in AP from Davos. He message was to demonstrate how AP is connecting and delivering citizen services through broadband networks.
Confederation of Indian Industry (CII) led a delegation of CEOs to Davos and found higher interest in India than before. “Investors are keenly watching developments at the state level and not just at the centre. They have specific questions and want specific solutions. This reflects their commitment to succeed in India,” says Chandrajit Banerjee, Director General of CII.
This means that India has to work harder on delivery of promises. While much has been achieved, excitement about India will rise in tandem with its action on ground. This timing will be important too.
