INDIA Inc has now got into the damage control act. The Confederation of Indian Industry (CII) has started an initiative to restore confidence and assuage fears regarding the economic and investment climate in India.
The industry association has set up an expert advisory group and a hotline to send the message across the planet that the investment climate in India, despite the sanctions, is extremely attractive. That India respects and welcomes foreign investment and that foreign investment in India is safe.
The group comprises experts from different fields as well as captains of industry. Among others, they include Jamshyd N. Godrej, managing director, Godrej group; Anand Mahindra, managing director, Mahindra & Mahindra; Venu Srinivasan, CEO, Sunda-ram Clayton; and K.N. Shenoy, chairman, ABB. It will primarily collect and disseminate information on the economic and investment climate in India in the aftermath of the sanctions. Says Ajay Khanna, senior director, CII and coordinator of the group: "Investor confidence was already suffering in India. The tests have really shattered it further. Now we have to do much more to bring it back and assert that there is, after all, nothing wrong with India. Most companies, especially American, are extremely sceptical and wary about the investment climate in India now. We have to make them feel secure."
Already reeling from recession, Indian industry has been groping for direction. Says V. Raghuraman, senior advisor to the group: "We are worried about the type of problems the sanctions can create. We have to understand the ground realities and then find the way out. At the moment everyone is clueless about the goings-on." Says Khanna: "There is complete lack of understanding of the sanctions per se and most people are confusing between economic and trade sanctions. We are not Iraq or at war with the US. In fact, the US government itself is not clear in its definition of sanctions as the Glenn Amendment has never been used before. So everyone is perplexed on the issue and that is what the expert group will try to clear."
Rumour mills have made it worse. Says Y.S. Rajan, technical advisor, CII: "In the absence of concrete information, misinformation is overshadowing the positive developments. One has to tell the people that India exists beyond May 11 and 13." The group has drawn up an ambitious 16-point action plan, which, apart from disseminating information, would centre around interaction with the governments of India and other countries, foreign banks, foreign companies and identifying alternatives to dollar financing. The group has held a meeting with American companies on May 26 and with foreign banks on May 27. On June 4, it will have an extensive interaction with Indian and foreign banks, financial institutions, NBFCs and FIIs to find ways and means to tackle problems that may arise out of the sanctions.
Abroad, the group has taken up India's case with international rating agencies like Kofac in France, Hermes and KFW in Germany and a few others in the US, South Korea and Japan. Campaigns promoting India have already begun in newspapers like Financial Times and India Abroad. On the Internet, CII has set up a special site indi-anindustry.com to answer queries on sanction implications. After the Union Budget on June 1, another website—indiainc.org—will come up to give post-budget updates of the situation.
Currently, industry is extremely wary. It feels that the situation is tense and much of this negative impression is because of loose talk from the government. Ragh-uraman feels that the initial euphoria over the tests is gone and there is more caution on the position of governments and foreign companies towards India. Says a leading industrialist who is part of the group: "By conducting the tests, the government has said it's implementing swadeshi. The signal is loud and clear. And now it is a godsend opportunity for the swadeshi brigade to do their bit. But Pepsi-type incidents (burning of Pepsi trucks in Gujarat) will only vindicate the fear of foreign companies that they are not safe or welcome in India. The government should also streamline its statements rather than letting them trickle down from all corners."
Whether the initiative works or not, one thing is sure, that the Indian industry has put one foot forward to help the government tide over the aftermath of the blasts. And it's only with concerted efforts from both that India can come out unhurt from this confusion.
