Violence mars India’s investor-friendly reputation overseas

Font Size

Print

Feedback

Email

Discuss

Related Articles

HCL Info to distribute SanDisk products in IndiaHCL Info to distribute SanDisk products in IndiaReliance Capital to operate in MalaysiaIndian wins CFO of the year award in Dubai

Bruno Valanzuolo had met slain Graziano Transmission CEO LK Chaudhary several times at events held by the Italian Embassy in the Capital. As the implementer in chief of a 3-million euro Unido programme in India sponsored by the Italian government, Valanzuolo’s job is to create partnerships between Indian and Italian small & medium enterprises like the one Chaudhary was running, in the auto and leather sectors.

Valanzuolo spent Wednesday afternoon with a senior manager of an engineering construction firm from Turin, which builds plants for Fiat and its suppliers in Italy and India. The same firm had built the Graziano Transmission plant in Noida. While the manager from Turin didn’t seem to be aware of Chaudhary’s murder yet, Valanzuolo says the “unfortunate and scary” incident could have repercussions on foreign players’ willingness to come to India. “It’s definitely not a good advertisement for India,” he says.

The Noida incident is not the only trigger for a fear psychosis, though it’s a compelling one for companies considering investing in India as well as deputing foreign workers to train Indian counterparts. On Wednesday, in New York, US-India Business Council president Ron Somers said apart from the incident in Greater Noida, the attacks on churches in Karnataka and Orissa as well as the Singur episode “would affect” foreign investments.

BMW India president Peter Kronschnabl has been getting calls from across Europe since Chaudhary’s murder on Monday. “It’s obviously not a very positive news. However, I don’t think companies that have decided to invest in India will change their decision.” But new foreign investors would certainly add a fresh red cross against India’s name on their investment destination list.

The timing couldn’t have been worse with the global economy already under turmoil and Unctad predicting that investment flows to emerging markets would slow down. But then militant trade union leaders have a knack of timing it horribly—Datta Samant brought Mumbai’s textile industry to a halt in 1982-83 when the industry was already in turmoil and ensured its demise in the process. Similarly, he led a strike at the Premier Auto plant just when it had launched the Uno and Peugeot cars in an attempt at turnaround. In recent years, the auto sector seems to be attracting the most labour trouble, though the reasons have changed.