...is, in many cases, also good for India
In the bad old days of restrictive industrial licensing and high import duties, since Reliance Industries Limited (RIL) seemed to be best able to persuade the government to liberalise some of the rules—to set up larger petrochemical units or reduce import duties on synthetic fibres, for instance—the old saw went “what’s good for Maker IV (RIL’s HQ) is good for India”. Naturally, that didn’t apply to everything, but in a similar vein, many of the issues raised by US CEOs, in and before the CEOs Forum with prime minister Narendra Modi and US president Barack Obama, are good for India as well—that’s the takeaway from Monday’s meetings. Take tax tangles and IPR, the two biggest issues raised by US CEOs. There is no Indian firm, particularly in the MSME category, that is not complaining of harassment by tax authorities, so anything that reins in arbitrariness by the taxman will benefit Indian firms. As for IPR protection, things were different when Indian firms were just ripping off US and European IPR; today, when Indian firms are also creating their own IP, strong laws benefit them. A Ficci paper by the Thought and Arbitrage Research Institute put the loss in 7 major industries—and this did not include pharma—due to counterfeiting and trademark/patent violations at R72,000 crore in FY12 and R100,000 crore in FY14. Indeed, this is why the industry ministry has put out a discussion paper on a modern IP law which includes having special IPR courts; and this is also the reason why in recent months the industry ministry has been trying to dissuade the health ministry from issuing compulsory licenses. The US insistence on scrapping Section 3(d) of the Indian Patents Act may hurt India as it will promote ever-greening of patents, but a better IPR policy—while retaining 3(d)—will benefit Indian innovators.
Similarly, in the case of the operationalising of the nuclear deal, as has been pointed out before, the unlimited liability clause was not just hurting US firms who were trying to build nuclear power plants, it was hitting Indian suppliers like L&T as well. If the Digital India initiative is to succeed, and this means very big business for US firms like Cisco and IBM in terms of equipment supplies, India needs to provide ubiquitous access to mobile telephony to all its citizens—that means getting the spectrum and M&A policy right; once again, something that will benefit US firms will end up benefitting Indian firms as well; as FE has pointed out in its Spectrum First series of graphics last fortnight, if the current spectrum policy is not changed, Indian firms will not have the money to bid for spectrum from next year onwards. Indeed, while the Hughes Network Systems proposal to build a Ka band satellite would benefit from the cell in the PMO that is to be set up to monitor all US investment proposals, the biggest beneficiary of this would be Indian broadcasters given the acute shortage of spectrum they face today. The larger point is that, in any area you can think of, no US firm is going to invest in India until the environment is safe enough for Indian firms to lead the way, whether that is in terms of access to fuel supplies, ability to buy land, suitable tax and IPR policies, M&A-friendly policies, a better-educated work force and so on. What’s good for America is, by and large, good for India.