” … if Bezos’ expected his verbal, sartorial and financial overtures to generate good vibes in New Delhi’s corridors of power, he was mistaken. The stalwarts of Mr Modi’s Hindu nationalist Bharatiya Janata party government seemed unmoved,” Kazmin said in her opinion piece.
Quoting commerce minister Piyush Goyal’s remark that Bezos is not doing any “great favour” to India by upping investments, the write-up said, “The lambasting of one of India’s biggest foreign direct investors — amid a severe economic slowdown — left many in the business community aghast, prompting Mr Goyal to claim he had been misunderstood. But Mr Modi declined to grant the tycoon an audience during his three-day visit.”
It said that India’s frosty treatment of the richest man in the world could backfire, especially at a time of slow growth.
“New Delhi’s ice-cold shoulder towards a big investor made for poor optics at a time of plummeting growth. Ostensibly, Mr Modi’s government wants foreign companies to set up shop in India. It touts its improved ranking on the World Bank’s ease of doing business index as a totem to assure prospective investors of a welcoming climate,” the write-up said.
It said the public relations blitz by Amazon was undermined by numerous tales of woe from those who have taken the plunge.
“Cairn Energy, which invested $6bn in developing a large oilfield in Rajasthan, has been locked in a six-year battle over a $1.6bn retroactive tax demand levied after it sold a controlling stake in the business. Walmart paid $17bn for ecommerce platform Flipkart in 2018, only to have New Delhi change the sector’s rules. Vodafone is threatening to shut down its mobile phone operations over a $4bn charge for retrospective fees, penalties and interest,” it said.
Kamzin further critiqued New Delhi’s “presumption” that global firms had no choice but to invest here, but cited FDI data to show that India still lags way behind China.
“For decades, India’s establishment has presumed global companies had no choice but to invest in the country, given its size. According to new data from the United Nations Conference on Trade and Development, India received $49bn in FDI inflows in 2019, an all-time high. That still pales in comparison with the $140bn that flowed into China last year, or even Brazil’s $75bn,” it said.
“In Dubai recently, I met a jet-setting businessman who advises funds on strategic emerging market investments. I asked whether he did much business in India. No, he said. He had never heard of any foreign investor making money there.
“That is the perception (fair or otherwise) that New Delhi must overcome if it is to attract the job-generating FDI it so desperately needs. Showing more grace towards existing investors might be a start,” the write-up said.