Remarks by HH Shaikh Al Nahyan at the HSBC/FT Conference, Abu Dhabi

Oct 08, 2009

Doing Business with India: The Next Wave

Abu Dhabi, Wednesday, October, 7, 2009

Introductory remarks by

HH Shaikh Nahyan bin Mubarak Al Nahyan

Minister for Higher Education and Scientific Research

Government of the UAE

Your Excellency, Dr.  Shashi Tharoor, Ambassador Talmiz Ahmad, Distinguished Guests, Dear Friends:

It is my great pleasure to be here with you this evening.  I thank the Financial Times, the HSBC bank and all the other sponsors for organizing this important event. The Forum provides opportunities for all of us to exchange ideas, understand opportunities, and share strategies for doing business in India.  I fully support the premise of this Forum: that India is a vibrant marketplace with a huge growth potential, its increasing significance in the global economy must be appreciated, and that “Doing Business with India" is a very important and timely topic.

But first, I would like to give a special welcome to our distinguished guests who are visiting us from abroad:  I especially welcome His Excellency Dr. Shashi Tharoor, India’s Minister of State for External Affairs. I welcome him as an old and dear friend.  Your Excellency, your presence in Abu Dhabi today is yet a further indication of the depth of the friendship and trust that exist between India and the United Arab Emirates.

I personally have great respect and affection for India and its people.  Consequently, you can understand my enthusiasm this evening for recognizing the strong and brotherly relations that bind India and the United Arab Emirates so closely together.  The movement of people, goods, and ideas between our two countries has existed for centuries and continually reinforces our affinity for each other.  These economic, commercial, and cultural connections are based on mutual respect and understanding of each other’s interests and aspirations.

I am naturally very pleased that the Financial Times has chosen Abu Dhabi, in addition to London, New York, and Mumbai, as one of the four world cities where these discussions are taking place.  The choice of Abu Dhabi for this Forum is recognition of its growing and pivotal place in the world financial markets and in the global economy.  We are a vital part of the world – a major center of commerce, focusing on international trade, tourism, finance, information technology, media, and energy.   Under the enlightened leadership of our President, His Highness, Sheikh Khalifa bin Zayed and the Crown Prince, His Highness Sheikh Mohammed bin Zayed, Abu Dhabi has become an important participant in the global economy.  All of us are aware of the innovative and ambitious initiatives that Abu Dhabi is taking in order to ensure future growth and prosperity.

In fact, the successful economies of both India and the United Arab Emirates share a common commitment to the importance of having a stable business and economic environment where free trade and investment are encouraged.  Both economies emphasize the importance of the role of the government in stimulating and supporting innovation, accountability, and transparency.  Both countries are also focused on enhancing business competitiveness, promoting initiative and entrepreneurship, encouraging investments in new companies, and supporting entrepreneurial education and training.

Dear Friends:

When I began considering my remarks to you this evening, I decided that as a person with a strong interest in India’s economic and business developments, it would be appropriate for me to provide you with some observations based on my own experiences.  I am not an economic expert, nor do I intend to venture into the realm of economic forecasting.  However, I do want to express my strong personal optimism for the future of India as a world economic leader.  While countries around the world continue to feel the pinch of the economic downturn, India’s economy is buoyant and in relatively good condition.  Investment opportunities abound in this vast, innovation-driven country.

From my personal experience, I believe that approaching the rich topic of “Doing Business in India” requires that we focus on four basic questions: 

·                Why do business in India?

·                What areas of business activities should be considered? 

·                Where should business take place in such a geographically diverse country? and,

·                How to do business in India?

The Why, is probably the easiest question to address.  Everyone in this room recognizes India’s great potential.  The Indian economy is one of the largest and most active in the world.  It has a huge and rapidly growing consumer market.  Its private sector is vibrant and highly competitive. Its educational sector, historically strong, is improving rapidly.  And its citizens are talented and highly motivated.

The economic reforms pursued by India over the last two decades have ensured that conditions for business and investment in the country are favorable.  Continuous reforms in all areas of business activity are making India more competitive and business friendly.  India also remains one of the lowest-cost countries for many manufacturing and service industries.

India has a sophisticated English-speaking workforce, some, such as in the IT sector, are among the most skilled in the world.  Entrepreneurship is thriving.  The economic infrastructure is continually improving. 

India is a country with strong capabilities in the areas of research and development.  It has a sophisticated financial sector, a stable, democratic political system and well established legal and accounting systems that are based upon international standards and therefore understandable to foreign investors.  Its business operations and regulatory practices are rapidly developing and therefore enhance the safety and security of investments.

Above all, India’s leaders are dynamic and visionary.  The Government is committed to creating a world class infrastructure and to investing in education and human development.  The business community also plays a leadership role in the global economy.  Many Indian companies are trend-setters in innovation as well as in global vision and reach.

I assume that by being here this evening, we all agree that India is one of the most attractive countries in the world for doing business, today and for the foreseeable future.

Next is the question of What? The title of this forum speaks of the next wave of business opportunities in India.  In my view, and again from observing the Indian business practices and opportunities, I believe that the next wave is being driven by Indian innovation, ingenuity and hard work.  Investment in India is no longer limited to Information Technology and outsourcing.  These areas will continue to expand, no doubt, but new opportunities are emerging in:

·                Bio-technology and Nano-technology,

·                Education, Health Care, and Pharmaceuticals,

·                Automobile design and manufacturing,

·                Aerospace and development of Alternative Energy Sources,

·                Banking and Textile production, and

·                Infrastructure industries, such as power production, telecommunications, oil and natural gas, roads and highways, and ports. 

These industries offer very attractive opportunities for investment and for doing business in India.

The third question is Where to do business in India?  India is an expansive country with enormous markets and a talented workforce.  It seems to me that a prudent approach to investment in India is to understand the Indian market at the local level.  Good understanding of the different localities is a prerequisite for success.  We all know about Mumbai, Bangalore, and New Delhi.  We also know about the ambitious plans for the economic future of these important cities.  But India is much more than just these three cities; its one billion plus population is distributed over a very large country; there are many other important cities.  With so many possibilities, it is critical to choose carefully and to connect with local business and economic leaders to learn about the economic priorities and business culture of each region, and to devise appropriate strategies for engaging each geographic market.

This point is related to the final question of How to do business in India?  My advice to investors who are considering doing business in India is to take some time to study the history and culture of the country and especially the region in which you plan to locate.  Many things that initially appear confusing often are better understood in historical context.

India is an enormous country with many different cultures, languages, traditions and practices.  It is important to understand the local culture and its business environment.  I always make this point by citing to my friends an Arabic saying:

       “He who does not know the falcon would roast it.”

Having good knowledge of the local market is essential to success.  And, as in any country, sound planning, patience and commitment are critical components of a thriving business venture.  India is a fast growing economy.  A fast growing economy offers opportunities but also presents challenges.  Meeting these challenges requires flexibility and the ability to deal with the occasional frustrations that may result from the unique nature of the market.

I am greatly encouraged by the commitment and efforts of the Indian government and the Indian business community to address the concerns of investors about doing business in India.  One initiative I encourage the Indian business community to consider is the creation of a center, or centers, that provide foreign investors with counseling and market intelligence that is critical to doing business successfully in India.  In the UAE, we have a large group of Indian businessmen who provide this information informally.  In fact, my interest in the Indian economy has come mainly from interactions with my Indian friends; but not every person is so fortunate as to have colleagues to provide guidance in their home country.

Distinguished Guests, Ladies and Gentlemen:

This forum provides an extraordinary opportunity to reflect on the considerable successes India has achieved and the vast potential and promise of this great country.  India’s continued progress and prosperity, its functioning democracy, its vibrant institutions, its commitment to basic human rights, its respect for the rule of law, and its focus on improving living conditions for its people command our respect and admiration. Today, on this occasion, I express my best wishes to the people of India for a successful future and state my strong belief that India will always take its rightful place among the nations of the world.

We in the United Arab Emirates are committed to strengthening our relationship with India.  We hope that events such as this one will help strengthen ties between our two business communities and will provide all of us who are interested in India with the knowledge and resources we need to pursue opportunities in the vast, rapidly growing and highly competitive Indian market.

Thank you again for the opportunity to address you this evening. I wish all of you, and the people of India, continued success, prosperity, and progress.

Thank you.