Kanika Dewan, founder and chairperson of Ka Design Atelier and group president of the Bahrain-based Bramco Group, stresses the importance of eliminating the deeply ingrained corruption in Indian bureaucracy. Dewan’s fi rm was responsible for the design and construction of the new Terminal Th ree of Delhi International Airport, the world’s thirdlargest. She recalls a particular incident that dramatizes the problem. Her fi rm was working on the Mumbai Airport, and had acquired rented accommodations for several hundred workers. Some people came by and said “get out of this accommodation.” When Dewan asked them why, she was told she needed to provide a payoff to a local inspector. She rejected making such a payoff citing corporate policy. She added that these types of illegal payments go beyond “the fl avour of corruption to literally criminal activities. We believe the outside world or the developed world, as we call it, is going to change that.” According to Dewan, India has been “very accepting” of non-Indians arriving from the US or elsewhere, armed with skills and good ideas for doing business. Apart from welcoming this “reverse brain drain” from the West, India also provides entrepreneurs with access to a vast labour pool from the country’s humungous human capital resources. “Th at is where India needs to go to tap into the resources that are within, but we need to organise ourselves in a more effi cient manner; and this is where quality control, corruption et al come into play.” Infrastructure is such a large issue, she adds, and there is huge opportunity for kickbacks; this is where the politicians earn their bad reputation.
India’s geographical position “allows it to bring in lots of intellectual property from both the Middle East and Asia — which will help us — but we have to learn from the West how to be able to avoid these kinds of issues.” Govil says that accountability and inconsistency in governmental policies are major challenges for NRIs and other entrepreneurs doing business in India, therefore the government needs to focus on improving the consistency of its policy initiatives. “If the rules change on the fl y, it is very destructive for business.” For example, a few years ago, the government was setting up special economic zones that were supposed to be taxfree. Although several companies showed interest in setting up centres for research and manufacturing in the zones, that policy was suddenly reversed. Rather than provide investors with taxfree treatment, they were now to be subject to a minimum tax of 20%. “The commitment of the government was there for three years, and then that changed,” Govil pointed out. Th ese sorts of reversals create “indecisiveness and uncertainty in the industry. And that’s why we have seen a signifi cant reduction in investments in India.” In a second example of government inconsistency, Govil cited a new law governing corporate social responsibility, or CSR. Every company having a net worth, income, or net profi t above a certain threshold level needs to spend at least 2% of its average net profi ts for the past three years on CSR activities. Th e challenge for NRIs and other business leaders in India, notes Govil, is that “we don’t even know if this 2% will be tax-deductible.” Too many Indian laws seem very ambiguous with gray areas that “create problems with accountability,” he added.
FUTURE DIRECTIONS
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Has India fully capitalized on the potential of the IT industry? Setty notes that India has “certainly become very important” for Google. However, he argues that there is still a shortage of content available in local languages and that the industry needs to try and get Indians to become “more used to using the Internet for e-commerce.” While E-commerce sites such as FlipKart and Snapdeal have enjoyed much growth, they have hardly penetrated into the vast Indian market. For its part, Google is working with local R&D teams to address the specifi c needs of its Indian users. Govil stresses that NRIs should “do something that you really want to do.” He also advises entrepreneurs to take advantage of India’s very talented labour pool. “Use India as a source of human capital. Th at is the biggest thing India has going for it, whether it is in infrastructure, IT, or whatever,” Govil notes. Ultimately, he adds, Facebook’s recent acquisition of WhatsApp for US$ 19 billion is really a big play on the Indian consumer, who will be using its online messenger service in ever larger numbers in the future. Dewan advises female NRIs to prepare themselves for various forms of intimidation. In her sector — design and construction — “they expect women not to put their foot down so much,” she says. On one occasion, for example, a male business colleague asked her, “Shouldn’t you be shopping?” rather than attending a business meeting. Dewan notes that women should “retaliate, and stick to your guns. Get your team to support you. You can’t be scared. You have to share your problems and work as a team.”