Global Business Summit 2016ET Edge
It is often said “the devil is in the detail”. But I believe that God is in the proper execution of many so-called details. It is these so-called details which, when done well, add up to a big picture.
Having a shared national vision will help the country move towards inclusive growth. The decisions need not be made in a hurry yet there needs to be a clear and effective road map for the implementation of plans. Such is the positive outlook of the current government combined with the endless potential of the country will see the investments in India rise significantly in the coming days.
China’s very evidently slowing down; but not to an extent that India can take over it soon. The efforts need to be more concerted and the current government brings around much more confidence. Unlike the earlier regime in 1991, this time around there’s more determination and speed with respect to the reforms being initiated and implemented.
India produces 10% of what China produces with a similar population. This is the time to build capacity, it is an opportunity. In natural resources, we have been branded as an importer. This must go away; we must produce 50% of our energy, and this is where entrepreneurship can play a big role in India. If you see electronics, we are importing $100 billion worth of electronics. In 3-5 years time, this could become $500 billion. We need 1000’s of entrepreneurs to come up and start manufacturing this. When I see this tremendous opportunity, it can be a great advantage for the country. The money saved can be channelized into the country’s infrastructure.
I think there is a much higher appetite and excitement about what is happening, there has been a significant shift that was not on the table. I think one of the biggest indicators are the investments by foreign investors, and I think that is the surest indication of where India is moving to. It’s all very positive, but we all want things to move faster. But I get the sense things are moving and we are seeing it with the capital.
I think that we need to be preparing for a period of low oil prices. I don’t see any changes in the Middle East that would suggest that oil prices are going to go up in the near term. So countries and companies need to figure out how they’re going to adjust and turn this into an advantage, if that’s possible, to mitigate the disadvantages of low oil prices.
From a global economic standpoint, the mood was pretty gloomy, to say the least. In fact, the number of global CEO’s that are predicting the global economy will decrease this year are about 27%. So it’s a very pessimistic view, we all know the reasons. The one point I would leave you with is that when we asked CEO’s to mention their top destinations for investments, India ranked number 5 on that list. With an economy growing 7.5%, there should be a lot more interest. One of the challenges the government must focus on is figuring out how to make it easier to do business in India.
India’s structural advantage, not linked with any variables, is the fact that we have a huge demographic dividend. We are talking of an average age around 27 and we will soon have the largest number of young people in the workforce as compared to any other world economy. This is an advantage that we need to cash in on. The fact that we’ve become the fastest growing economy in the world is something to really crow about and then we’ve got all our macro-economic fundamentals in place. All of these factors are huge positives for India, so we are a spot of sunshine in the global economy.
India has many of the same challenges as a company. Sometimes it feels very hard to set the strategy, it feels pretty hard to set the policy, it’s really hard to get the implementation. The bigger the company, the more complex the system, the harder it gets. So I think there’s a really strong argument to focus on consolidation and implementation.
Clearly, when I look at what has happened here in the last several years, there has been a great move in infrastructure. It begins with power, and I think India is second to no country in the world in terms of its embrace of renewable energy.
The key thing for India is to continue what they are doing but the country needs to accelerate its pace of reform. Many of the companies are concerned about retrospective tax, good infrastructure, and in India acquiring land is complicated. India is growing above 7% despite global headwinds, and with an accelerated pace of reforms, India has the potential to be one of the bright spots in a woe-stricken global economy.
People tend to call markets volatile when it goes down, but not when it goes up. It’s not a euphemism, it’s just a mindset. In the long-term, if you are running a country, your future depends more on a physical reality than a financial reality. So any flux in finance markets forces sectors to be much stronger and rely less on it. So India has a lot of potential and human skill levels, and that’s the wealth you should focus on more than financial markets.
GST will encourage American companies to invest in India more, but it is only a start. India needs to do more if it want to get more investment. India needs to reform employment and land ownership laws. I believe that rising labour costs in China will encourage more American companies to look to India but further policy changes are needed.
The pace of e-commerce growth surprised me. E-commerce in India still in its early days, and the opportunity has grown only bigger with the mobile phone boom & greater internet penetration. Indians have the mindset of collaboration. But Chinese have the mindset that they copy the idea, customise it more and beat it in the home market. Indians need to develop this mindset.
We are reaching a point where the electrical ecosystem in our country is due for a transformation, like the telecom ecosystem transformed after the after the introduction of internet. So we are likely to see an explosion in terms of value and opportunity
We see a future where the combination of IT, IOT and software control is going to become a lot more important in the energy world, like we transition from telephony to internet, we will see a change which we can term as “The internet of Energy networks
We need storage solutions specific for this country rather than lead adopting something from outside and we need innovations that are required for this country that are sustainable.
We must use technology that leverages what is available in the country and limit what is not. We must also leverage solar energy and go against fossil fuels. It is better for the environment. Listing out algorithm, cloud, software, mobility, and mindset as the key factors that are critical in creating competitive advantage in a digital environment, Ram Charan said that, “It’s not digitisation, it is the algorithm that’s the new core competence. To succeed, all of these have to be integrated.