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The Rediff Business Interview/Kailash Joshi

'But for the regulatory mechanisms, India is quite conducive for investments'

Dr Kailash Joshi, founder-member of The Indus Entrepreneurs or TiE, is part of US President Bill Clinton's entourage to India. TiE is an association for and by India-born people who have made it big in the United States. TiE seeks to promote the interests of 'the people of Indus' and develop their businesses in the US by making available venture capital.

Joshi left India for greener pastures in the United States in 1963. After brief stints at the Cronell University as a student and a teacher, Joshi joined IBM. In 1989, Joshi came to India to set up IBM's Indian subsidiary, and went on to set up the Tata-IBM joint venture. He retired from IBM to set up TiE and work towards setting up start-ups for young Indian entrepreneurs in the US.

TiE is today an influential group that has been impressing upon President Clinton the need for improving trade relations with India and to make bilateral business easy. Joshi spoke to Neena Haridas about the Indo-US trade scenario.

How significant is President Clinton's visit to India considering that he is a retiring president?

I think the timing is very significant and it will have major long term implications. There is a convergence of interests and challenges between the two countries. Both the countries have some mutual interests -- especially in economic relations. And both countries share mutual concerns of security. India and US want to share a lasting relationship and grow together. That is important. The United States, especially President Clinton, realises the growing importance of India in the world map and the global market.

And in this global market, US realises that knowledge-based industry is the growth driver and it also realises that India has a very strong base in the knowledge-based industry, by which I mean infotech, biotechnology and pharmaceuticals. The US now realises that it will require Indian expertise in these fields to fuel its economic growth.

Which is why I say that the timing of President Clinton's visit is significant. The point is not for how much longer he is going to be in office, but that the beginning has been made at the right time. I think this visit will bring in some agreements in security and broadening and improving trade relations.

Do you think US investments in India will increase manifold now?

I don't think direct investments is the only measure of good trade relations. When I say broadening trade relations, I mean it in a larger perspective. The Clinton visit will add value to the relations in three different ways in the long term:

• One, it will lead to the government of India easing its norms to make business smooth between the two nations. Its policies will become more competitive and at par with competing nations. This will be a significant improvement. This will result in easier policies on mergers, alliances, start-ups, allowing companies to approach other markets for capital, etc.

• Two, there will be more interaction between the two countries in the field of the Internet, consumer goods and software.

• Three, infrastructure is the main hindrance in India. And the US is interested in bringing in investments in power, transportation, communication and water supplies.

I think these will be the long term implications of the Clinton visit. So, let us not just measure the relationship in terms of direct investment alone.

What, according to you, should the Indian government do in terms of policies to encourage Americans to invest in India?

The government should simplify the regulatory mechanisms. It should make life easy for the person who is coming to India with the intent of doing business here. The policies relating to start-ups, joint ventures, setting up subsidiaries, etc, should be eased. But for these, the Indian atmosphere is quite conducive for investments -- India has a large human resource base, good education system, smooth banking system and seasoned business houses. Once the policies are simplified, investment will flow.

How much does the Indian community contribute to United States' economy?

There are about 260 million Indians in the US. It's a very powerful ethnic community there. In fact, Indians have the highest per capita income in the US as compared to other ethnic communities and the Americans themselves. They generate a lot of wealth for the US -- in fact, of every $3 created in the infotech industry, an Indian contributes $1. Now that is one-third of the total wealth generated in the infotech industry alone. Indians' contribution is very significant and the best thing is that the United States knows that now.

Does that mean the issue of increasing the number of H1B visas will be in favour of the Indian lobby?

Well, that is a boiling issue. The US president is well aware that Indians in the Silicon Valley use most of these H1B visas. And infotech is the growth-driver for the US economy. I think the issue will be in favour of the Indian lobby.

Do you think linking trade with labour standards will dampen the Indo-US trade relations?

That is a very complex issue. There are many layers to it. Issues such as environment, child labour, etc, should be taken into consideration because it affects the human community as a whole. As for labour standards, it should be viewed in the context. For one, the wage structure is linked to the purchasing power, etc... so how can you make a generalised comment?

The Indian brain-drain to US seems to continue unabated. Don't you think this energy and intellect is required to make India a better place to live?

I think the concept of brain-drain is changing. The market is merging -- geographical borders will not matter in the coming years. Once India and US talk on equal terms, there will be no talk of brain-drain. Now, do you ever hear about brain-drain from Europe to US? No. But Europeans are constantly moving to US to work. Now that is not considered brain-drain because they are considered as equals.

Interviews

Bill Clinton's India visit: full coverage@rediff.com

Business

EXTERNAL LINK:

TiE: The Indus Entrepreneurs