Making Local — Selling Global
All that has been said about the novel COVID-19 crisis and its bearing on geo-political levers in the medium to long-term inevitably converges to conclude that the crisis is as much an economic crisis as a humanitarian calamity. Amidst the America — China trade war, disturbance in Iran and breaking of oil prices, and the COVID-19 crisis which has put a brake on the economic activities across the world, global markets are correcting and preparing for disruptions cutting across geographies and businesses.
While most investors are bracing themselves for post-COVID-19 challenges, global leaders have been summoned to deal with both, the pandemic and the ensuing economic confrontation. For a market like India, there is one more variable i.e. economic opportunity presented by COVID-19 as global supply chains stand broken, China suffers from secular trust deficit and some of the worst-hit countries need to look for alterative business destinations.
With an early lockdown, continual interactions with global leaders and supporting the world with essentials including HCQ tablets and other medical supplies, India has proven to be the friend in need.
In the past six years, India has aced the art of maximising Tier 1 diplomacy and leverage on the optimism that has been tagged with the country post Narendra Modi assumed office. While the 2014 and 2019 mandate reflected the mood of the common man, sentiments of investors were continually reflected in growing FDI investments in the country.
Some of the recent marquee FDI announcements include USD 1 billion investment by Amazon for digitising SMEs, Total SA acquiring 37.5% stake in Adani Gas Limited, USD 75 billion deal between RIL and Saudi Aramco.
Multiple reasons have led to increase in value and volume of foreign investments. Political stability, increased predictability in policies and the most important, ease of doing business. Ease of doing business is very consequential because India has not only leapfrogged as per the World Bank Rankings (which are limited to input-based surveys in Delhi and Mumbai), the experience India offers currently is remarkably different from that offered a decade back. Infrastructure enablers such single-window, digital submissions, deemed approvals, time-bound clearances, digitisation of land records, have played a significant role in taming the cost of doing business (time and overheads).
Some of the key business reforms include:
· Filing fee for SPICe company form, electronic memorandum of association and articles of association has been abolished.
· Post-clearance audits were enabled, trade stakeholders were brought on a digitised platform, provision for e-submission of certificates was also made.
· Reorganisation provisions have made resolution to insolvency much simpler. Moreover, secured creditors are given absolute priority which makes strengthens access to credit even further.
· Labour laws have been going through thorough reforms to weed out the obsolete provisions, permission for women to work at night, Integration with Shram Suvidha, online submission of returns and special exemptions for SMEs.
PM Narendra Modi who is known to have a penchant for accurately matching investors with investment opportunities has gauged the global schema very accurately. By preempting the reluctance of investors to interact with China, he proactively amended the FDI laws deal with expansionist investment practices of China. Through his decision to support multiple countries in the world in times of crisis and keep China’s ambitious lobbyists at bay, Narendra Modi has sent out a dual pronged message to the world; while India is a friend in need, it is unwilling to compromise on its domestic interests. Both, the policy of India First and India’s potential to the world as a Vishwa Guru are spelled out to the global community succinctly and strongly.
“Price is what you pay. Value is what you get”, Warren Buffet
As the world’s second populous country decided to value lives against the price of an early lockdown, once again, India needs to hard sell India as the alternate investment destination. It needs to welcome investors with sweet deals including long-term incentives to generate employment, plough back portions of earnings in the small and medium enterprises, invest in skilling and local procurement. India can no longer allow itself to be pushed back at the behest of lack of infrastructure or political instability. While the price of COVID-19 is being paid, we need to break ground for extracting the value.