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The government may have saved its political skin by putting FDI in retail on hold, but it has added to the sense of gloom that’s engulfing India Inc. For the past several weeks, there’s been a depressing drumbeat of stories of Indian businessmen choosing the relatively low growth, high-stability option of investing abroad over the uncertainty of launching new ventures at home.
Says the India-head of a fabled global investment bank, “For me, there’s no slowdown. My plate’s full with mandates from Indian companies looking at acquisitions abroad”.
But it’s not just about the flight of investments anymore. Several Indian billionaires say they are frustrated enough to want to shift base overseas and run their increasingly transnational business empires from cities like London and Singapore. “I’m sick and tired of what’s happening here. I don’t want to live in this country anymore,” said one of India’s biggest barons.
The reasons are mainly twofold: the policy paralysis brought on by a politically weak and scam-struck government, compounded by obstructionist competitive politics; and the climate of fear that has spread because of the raids on and arrests of businessmen. They have a third, more specific grouse (not that it’s new): the time and hassle it takes to get environmental clearance and acquire land.
Bulge-bracket businessmen — from industries as diverse as telecom and textiles, aviation and steel, real estate and minerals — are talking ‘Quit India’, but obviously not in public. They may be exaggerating their angst, but for the first time since the dawn of liberalisation 20 years ago, the India story seems to be dimming compared to the welcoming lights of foreign shores. As RPG Enterprises chairman Harsh Goenka quips, “We are looking for the red carpet, not for red tape.”
