The Story of India: View through the "Stand Alone" Lens
The Economic Times - July 2004
Everyone who has been on 'marketing India' road shows, especially in the West, cannot but help notice that while 'India interest' in the eyes of the world is increasing, India skepticism is not declining. Also familiar is that India gets less than its due, when balancing the good news and the bad news about it; while China gets more. The questions that get asked about India at the end of very well crafted, informative and sensible speeches from captains of industry or opinion leaders are always in the realm of "yes but…" I wonder if it is something to do with "aukaat" - the developed world feels that we should stay within our aukaat, and worry about our caste system, our perceived absence of civil society, our crimes against women etc, rather than stake our claim to the "who's who' of the new economic and hence political world order.
But of course, a lot of the problems cited exist, but they are a fair bit better than they used to be, and we are working on them. The data on India is fairly clear. There is good and bad news and there can be no debate that this glass called India is half empty and half full. However the glass is filling - not as fast as we would like it to - but surely and steadily filling. The focus always seems to be on what is yet to be done, which is a good focus to have. But there is also a moderately good story on the progress that has been made on economic and social and political fronts, even infrastructure. What has been achieved is important because it does build faith that the future is happening, and the march towards betterment is sustainable.
So why are we denied any points for that? I used to think once upon a time, that may be we weren't telling the story well. Maybe we lacked the spin doctoring sophistication. Maybe our politicians were not welcoming enough. But none of this is true any more. So what do we do? I think we need to just keep on plugging the India story, chipping away at rock hard attitudes, knowing that the acknowledgement and perception of India will change exactly the way India changes - in a slow burn kind of way, with some pockets showing rapid visible change and some that will remain change resistant for a long time to come. But if we could shift the lens from one of comparison to one of "stand alone" evaluation, we might get a more positive response than we do today.
There are two lenses through which the data on India can be viewed to come to a judgement on whether India is a worthwhile place to come and do business in / with. When the data is viewed through the comparative lens of "when will this country become like some place else", the answers look pretty bleak. When will it have the per capita income of China, the education levels of Russia, the speed of implementation of a command and control country, the per capita consumption of a Brazil, the institutional framework of America and so on? The answer is, not in a long time to come. And the more we try and defend the data seen through the comparative lens, the worse it looks. We need to challenge the theory of the magic number of GDP per capita, at which consumption will "take off". Consumption of what? Value right products and services made for India, or products and services with cost and performance and price structures that have been developed for "someplace else"? Per capita consumption will never match norms developed elsewhere, because the arithmetic of consumption in India is that a lot of people consuming a little each can add up to a lot. The Indian FMCG market, estimated at USD 20 billion has 37% of the value coming from the rural poor, while only 20% comes from the urban upper classes.
But when viewed through the "stand alone" lens, by itself, not compared to some utopian ideal of how things should be, there is an opportunity for value creation for businesses that are hungry for growth. When viewed through a "stand alone" lens, the story of India is one of fairly large economy and large consuming base, offering sustainable, steady, moderate growth. One which is and will get larger every few years like a snowball growing as it gathers momentum. For those operating in developed markets which are ageing and saturating, to have a guaranteed growth source to fuel value creation for a long time in the future, has got to be a "must have" large, long term growth opportunity. Even in the last six years, not necessarily the best growth we could have had, national income has grown at a little over 3% per capita, and in ten years, India's per capita income will be as attractive as China's is today. Further there is a steady building of institutions; and while the wages of democracy are sometimes hard to deal with, the good news is that when the party does get into full swing, it will be with the concurrence of everyone, making about turns not a real threat. And other than the market potential, India offers a proven capability base that makes it a good sourcing base - a geography that is rich in talent and capability that can be leveraged to disruptively serve markets elsewhere in the world.
The bad news is that India won't be like some place else in a hurry, and hence offers very little opportunity for those who look at it as a geographic extension for strategies and products and services that have been created for someplace else. But the good news is that if only we could be viewed through a stand alone lens, it offers a fertile ground for long term, sustainable growth, for those who are willing to sow the seeds of building "made for this place" businesses.