Politicking out of way, its time to build legacy

Written by fe Bureau | Mumbai/New Delhi | Updated: Nov 8 2012, 09:06am hrs
Barack ObamaNewly re-elected President Barack Obama celebrates on stage
Barack Obamas re-election as President of the US could lead to the Congress delaying most of the fiscal tightening scheduled for year-end, making an agreement on deficit reduction unlikely before mid-December. While equity markets could retrace some of their gains if the automatic tax hikes and spending cuts that effect in January popularly called the fiscal cliff are not prevented, captains of Indian industry believe the legislative logjam might end sooner than anticipated. Without a timely agreement, $570 billion of fiscal stimulus could be pulled out and lead to fall in US GDP growth of 3% in 2013.

There is a status quo and we are hopeful that their approach will be more pragmatic, said Infosys executive co-chairman Kris Gopalakrishnan. We don't think there is any impact of the elections and it was rhetoric as seen in the past.

The second term of a US president is the more fascinating one, said Mahindra Group chairman Anand Mahindra. With politicking out of the way, its time to build the real legacy.

India Inc has been wary of Obamas rhetoric against outsourcing, but for second term, concerns seem to have given way to hope. This is a good development for India, Godrej Group chairman Adi Godrej said on the sidelines of the World Economic Forum on India.

Between two large economies, there will be issues and concerns. Outsourcing is also a concern and I hope it will be addressed soon, said Godrej.

For many, Obama's stance against outsourcing hardly moved beyond the rhetoric. It is on expected lines but there was some heat reported in the last few days. I think it will be good for India. There will be continuity, said Sunil Bharti Mittal, chairman, Bharti Group. When asked about concerns over outsourcing he said: I have heard this in the previous election. We saw Clinton go very heavy on outsourcing and we did not see anyone of these impacting our outsourcing business or relationships.

The antidote to all concerns seems to be growth. Now the focus will be on driving economic growth, which will lead to increased prosperity and greater job creation in the US, as well as act as a catalyst for growth across the world, said N Chandrasekaran, CEO & MD, Tata Consultancy Services, which got 53% of its Rs 48,900 crore fiscal 2012 revenues from the US.

Moreover, companies like TCS, Infosys and Wipro have tweaked their recruitment strategies in the US to favour more American nationals. Technology will play a strong role in driving the next phase of growth and Indian IT companies will have opportunity to play a significant role to partner with US companies to achieve this. This will lead to further job creation in the US and other parts of the world, he said.

Offering a different perspective, Bajaj Auto chairman Rahul Bajaj said: Mitt Romney would have been better for India as they are little bit open. Obama is more protectionist and we hope that it will change.

One of the highlights of the first phase of Obama's presidency was the Patient Protection and Affordable Care Act, popularly called ObamaCare, requiring most Americans to have health insurance. While there is criticism that this favours big insurance companies and further drives up cost, this continues to open new opportunities to generic drug manufacturers from India. It (Obama's re-election) will be positive for affordable healthcare in generic drugs, said Kiram Mazumdar-Shaw, CMD of biotechnology firm Biocon. In the US, over 75% medicines are generic. So, the Indian pharmaceutical sector is going to gain in the US.

Kamal Sharma, MD of Lupin, which gets over 36% of its revenues from the US, said: Since the Obama administration is committed to expanding the scope of affordable drugs for Americans and reducing healthcare expenditure, we believe generics manufacturers will undoubtedly stand to gain over the long term. The widening of coverage will benefit both brands as well as generics businesses in the US market.

Amid arguments that China benefited more out of bilateral ties with the US under Obama, the Indian industry was hopeful of a strengthening of ties with India as well. A historic second term for Obama augurs well for the now-established Indo-US strategic and economic partnership, said RV Kanoria, president of FICCI. He said the industry looked to strengthen co-operation in higher education, defence and homeland security, agriculture and nuclear sectors.