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| Let Me Think, I am bit puzzled... |
There is nothing sexier than SENSEX, when over pouring FDI, overwhelms the indices. Political correctness, coerces the leaders to selectively welcome the overseas money while rejecting the same for multi-brand retails, as that would persuade erosion of crucial retailer vote bank. In fact, we already have multinationals making huge inroads into multi-brand retail segment. The Reliance Industries, and the Future Group's operation is not restricted to Indian subcontinent only, and they are big enough to wipe out the entire retailer community here. So whats the fuss all about, its more political than real. The local retailers concern reminds me of early 2K when Bajaj group Chairman, Rahul Bajaj connived with, the then Bajpai Government to stall the possible entry of Chinese automobiles into Indian market. At the hindsight, that was one of the perfect decision ever made by any government. The Chinese products are not only poor in quality but also hazardous for users, they only push sell with a low cost tag - most appropriate for use and throw commodities, with shortest life span. In short term the consumers might pose a winners' smile but in long that would have destroyed the whole automobile segment, perpetually damaging the very foundation - beyond any repair.
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| Indian Multi-Nationals |
In the cacophony of high decibel TV debates, we often found ourselves lost at the middle of this riddle called Foreign Direct Investment. With investment flowing in, the target market reacts positively, with a market rally and eventually a bullish market. The whole turn around results in a cascading impact in the growth of the economy, with everybody cashing in some money home. Most importantly the retail investors, a majority in demography, can make some good profit while short selling. At the same time, when the money is pulled back from the market for reasons best known to those external investors, the retail investors suffer the most with their entire profit made in months together completely up-set negatively in one such occurrence. Before we discuss further to unravel the riddle its imperative to understand the psychology behind the FDI or the external investors.
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| Maximum ROI |
Nevertheless, an investor always looks for avenues that maximises the Return On Investment (ROI) with complete apathy towards the investment destination. Everyone sees India and China as top opportunities as they not only guarantee high return but also the invested principal is secured. PK and AF might assure you with huge potentials but nobody is interested because many factors including poor state of infrastructure as a key ingredient, missing there. For the external entities, India is nothing but a fertile land for investment, if tomorrow Philippines would promise better return, the same set of investors would not hesitate a bit in turning their back on us. Like a dumping partner, they would probably drop a brief note "No Hard Feelings Please", that only a ditched one could explain. Moreover, FDI behavior is more symphonic to the performance of SENSEX than the other way round. The moment the market loses its sheen the entire gamut of investment would fizzle out without any clue.
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| Build your own Brand |
Sooner than later, we should understand the fact that it's more important to build our own fundamentals than solely looking for foreign investment to rescue us from the economic crisis. The bonus of foreign investment might offer temporary solution to our financial woos or unemployment problem but they are never intended to serve any of these purpose. The bottom line here suggests us to be more inherently cohesive that naturally makes us more alluring to foreigners who look at us as nothing but a vast market. Sometime, we have a dilemma of choice between poor nationalism and quality internationalism. The consumers have every right to quality products - the value for money, so promoting mediocre indigenous products is rather stupidity in the name of SWADESHI. Concurrently, being such a vast country with so much of man and material resources, its absolutely shameful on our part to buy cold drinks, soap or a detergent from a multi-national outlet. This clearly says, we might have all resources but entrepreneurship or the government policy is not at all conducive to promote our own national brands to sustain the challenges of foreign multi-nationals. Till such time Coke and HLL would take away all revenue generated out of Indian market though they would offer some respite in terms of employment while managing their supply chain.
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| Strength from within |
So long as we have a growing economy and a fascinating market, FDI would flow effortlessly to tap the opportunity. The need of time is to grow our own multinational brands, not restricted to few sectors like telecom, steel, automobile or information technology. We have proud moments not merely when we have an impressive investment but when a TATA or Bharti makes an international presence, transforming into our own multi-national brands. With a practical approach the true spirit of Gandhi's SWADESHI is about building our own brands rather than shunning international ones. China is almost commanding monopoly in production sector across the globe with all top brands going for it for manufacturing and assembling. India is a obvious market, a dumping yard for a range of electronics-electrical equipment, gazettes and even toys. This is high time we wake up to this challenge of economic subordination, imposed by our powerful neighbor.
A Beta Version, subject to re-writing.
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