India’s Port of calling: Role of Palate, Place and People: A potent recipe to cook FDI
Ahmedabad, 2 July 2012
When I humbly embarked upon writing this series, never did I think I will come this far. All thanks to messages, comments, suggestions which made me ponder and rethink again. In my second article (Two states Different Approach to FDI), I had mentioned it would be interesting to see Gujarat in the mirror of TamilNadu. I tried to dwell upon points which normally get overlooked but are very obvious to one of the most important stakeholders of economic growth- The Foreign Direct Investors.
Having analyzed the historical backdrop of economic growth, nature of industry, importance of eco-system of these two leading states, it’s time to look at soft infrastructure.
Let me take you on a hypothetical ride with a CEO or senior executive of global company who has been mandated with investment decision. Let’s assume you are one and are at Chennai. The day typically starts with meeting Govt officials. As you jump in your car at every bump or sudden brakes, you wonder, is this the right place in invest? The Govt. official will give you a rosy investment picture as if you are the only one missing boat while your mind is still trying to be at terms with the fact that does this official not know his infrastructure is in extremely pathetic shape? In between you will get anxious that in spite of all the cripples may be after all this is all not bad place, but somehow the attitude of the govt official will make you wonder and feel like finding truth by yourself. Again you are on bumpy ride before; you are in few established Industrial estates to see existing factories. You figure out that in your investment plan you have to budget for the extra facility of power backups and water harvesting. While you see neat and clean shop floors and disciplined labours, moment you come out, you are again fraught with nightmare of traffic and non-existence of roads. Next day before you leave sightseeing is also planned.
Just 50 KM down Chennai there is UNESCO world Heritage site of Mahabalipuram. The weather normally is harsh and it tires down visitors unless it is fag evening. It is no running away from Chennai’s harsh hot and sultry weather even on weekends. Momentarily you do get mesmerized by the wonderful stone carvings from 7th century but heat takes it own toll and you feel fatigued.
However just adjacent to the coast there is Radisson Blue property. This sprawling resort hotel has a charm of its own due to its proximity to Bay of Bengal beach facing bay bungalows, poolside villas and aura of tranquility, as you walk through them, your mental fatigue starts waning. One of its restaurants – The Wharf, located right on the shore, offers a breathtaking view and beautiful ocean breeze. The natural sounds of the ocean, makes you relaxed instantly. The serene but musical movements of waves just have magical effect. The breeze cools you down and with few beers you feel in holidays at Mediterranean. The catch of the day (the fresh fish from ocean) is usually served with Naan, Black Daal and other international cuisine at not so expensive rate. You joyfully start contemplating your experience in Chennai, while chaos on roads, with discipline in factory is fighting in your mind, the serene beauty of mischievous water, cool breeze, stupendous food and chilled beer makes you forget the difficulties of Chennai and mind starts counting positives. So what if there are power cuts, its everywhere in India. The roads are chaotic but we can change the shift. By this time you have already made your mind.
Even though it may look stupid, but quite a lot if not always decisions are taken keeping in view human comfort of relaxation as a prime reason. It is all the more important if you are planning to make a strategic decision to put up factory which could be integrated with global supply chain.
To have an urbanized lifestyle is a bare minimum requirement to attract FDI. This has been proven in the cases of East Asian growth model and that’s what grossly missing in Gujarat’s case. Efforts are being made to correct this. GIFT city I thought was the right step in that direction ironically there was an article in ToI “Whose GIFT is anyway” ridiculing the whole reason for GIFT. I wish so called MSM journalist who have wonderful understanding of Progressive Gujarat widen their views and look beyond seeking some instant gratifications. Anyways, let us move on to Chennai saga.
If you dribble down the history of Chennai in 90s, it was still a big village. Unlike swanky skyscrapers of current Gurgaon or urbanised landscape of Mumbai or Westernized pub culture of Bangalore, there was hardly anything for foreign expats in Chennai. To imbibe new technologies human interactions is a must. Expats did not prefer to come to Chennai to stay longer, Indian companies had to send their people abroad but there were limitations in terms of knowledge transfer. The companies will have to bear tremendous HR costs in terms of “Hardship incentives”. Persuading expats to be stationed in Chennai was challenge as there were very few spots of Oasis where expats could feel relaxed.
That Oasis however played their role perfectly. “DAHLIA” on Busy Street of Nungambakkam is the oldest running Japanese restaurant outside Delhi in India. The owner came to Chennai for export of Tuna fish and decided to settle down. The Japanese gentleman and his partner persisted till now. It made sure any Japanese investor came to town went back happily and those stationed in Chennai found it as a place to unnerve their tiredness over Japanese music and Japanese TV program. It also attracted expat Indians who had exposures to wonderful fish delicacies such as Sushis and Shashimis. TN also had prohibition like Gujarat and Dahlia also faced difficulties, but they made sure they remained authentic, even by walking fine line. The rule of Global business is to be consistent and they followed it to the T. The sheer authenticity of this restaurant made it a must visit place for many expats.
Probably more decision on investing in Chennai happened in this humble restaurant over chilled beer and Raw fish then in Industries department of TamilNadu. I don’t think that Dhalia owners intended to contribute in this count, but their adherence to quality and consistency played surely an insignificant role. Located in dingy complex on road, Chennai’s investment history has lot to thank this restaurant. The shop is humble but the contribution to attracting FDI is huge and considerable.
When will Ahmedabad get its own DAHLIA is a question worth asking? Forget about alcohols, Gujarat does not have any good international cuisine restaurant worth its salt. If you have to invite guest over three days, you struggle to find where to feed or entertain.
Besides Dahlia and Wharf, there are many specialty authentic global cuisine restaurants in Chennai such as Akasaka, Arirang, Yamamoto and few more Chinese and Authentic Korean cuisine not to mention amazing Italian in Hyatt. Chennai has solved problem of Palate. When will Gujarat learn?
1200 years back when Parsis descended to Gujarat’s shore, the far-sighted King Jadav Rana not only welcomed his guests but respected their culture and tradition. And in a very rare and magnanimous gesture he agreed the conditions of Parsis that they will be allowed to build their holy place and that no non-Parsi should enter that area.
May be a time has to come to be little more sympathetic and magnanimous to foreigner’s cause too. If Gujarat has to take a leap further, making urban Gujarat thriving with best of the world is indeed a need of an hour. If Govt has to give Viability Gap Funding (VGF) for hospitality and restaurants serving authentic food, it would still be worth an investment which can return in multi fold.
The Biodiversity thrives not only because of just one kind of large tree. The tree requires water body, birds to help re-germinate seeds. Could place grow without people? Many readers have commented on TN’s superior human resource angle. I would like to draw attention to one another angle of human efforts to build brand Chennai.
AOTS stands for Association of Overseas Technical Scholarship. The 1959 program of Japanese Scholarship invites engineers and technicians from developing countries to Japan for training. Besides rigorous on the job training they are also groomed on the TQM and other important cultural aspects. Globally there is countless AOTS Alumnus. None impressed me more than their Chennai chapter. Led by passionate leader, they have built many Japanese sympathizers among common citizens. While the objective of returning alumni is to spread their learning, the Chennai chapter has done this in force multiplying manner. The leader and his team have helped translate tones of Japanese Quality control documents in to Tamil. They would also volunteer to help any company who wants their employees to learn about Japan, Japanese or Japanese ways on quality. Humble man is still available to teach and share his experience with Japan. And there are many like him. Both his prodigy as well as people doing similar thing, is great service to thriving manufacturing industry in Chennai. The force multipliers like him only augment and compliment efforts of passionate entrepreneurs and ultimately are responsible for building brand Chennai.
Since 1970, Gujarat University and Otemon University of Japan are having uninterrupted student exchange program. The oldest and longest running program between two nations. The legacy notwithstanding, Gujarat has yet to produce a tiny bit of Chennai counterparts. Or it is in the making. Only time will tell.
The idea of bringing above point was to put a mirror in front of citizens that it is not only Govt’s job but citizens also have to play their role. As I write I learn Gujarat CM and his team are on their way to Japan on the invitation of Japanese Government. In the midst of high profile MoUs and meeting of senior leadership, I hope some agenda is spent on building soft infrastructure for the state.
Will be traveling for a month, and hopefully will try to write next in the series. Tentative title on “King of Governence v/s order of chaos”. Do come back to share, comment and participate.
Entire series:
Part 1:India’s port of calling: Credible Gujarat and Diligent TamilNadu
Part 2:Two ports, different paths: How to attract FDI
Part 3:India’s port of Calling: Importance of prolific ecosystem and lessons for Gujarat
Part 4:Tale of Two Industries: Lessons for Processed Gujarat from Discrete TamilNadu
Part 5:India’s Port of calling: Role of Palate, Place and People: A potent recipe to cook FDI
| << Previous Post |
Very good article again..
Somindu,
You and millions more like you in India needs to understand an underlying fact that FDI is borrowed money which India has to return with all the earning made using that borrowed money. In simple term it is just “UDHAAR”
If we have to change our food dishes and life style so that we can get “UDHAAR” from foreign investment institutes and companies, then as a Indian I would say stuff with your money and off!
If you want to do business in my country/area, sell things I want. Speak language which I speak. You will change, not us! Our lifestyle may change with time but only because we want, not for anyone else.
If Tamils are ready to bend over backwards to get FDI, Congratulations to them!
Not going to happen in Gujarat!
Ultimately it is going to happen everywhere.
Just take small examples – how KFC, Dominos, Mcdonanlds and other brands are finding their way in and are also expanding – why?
Because they are finding takers and buyers.
First point -
FDI is not Udhar, it will benefit thousands of people in terms of employment (agree it will also impact lot of people – but ultimately it will balance out). Consider this, if Mukesh Ambani invests in Gujarat then it is not Udhar – it is an investment, and profit earned through this investment will be invested somewhere else – who doesnt want to expand.
Second point -
With FDI a player like Walmart, Costco and other brands will play a vital role to eliminate middle level brokers and with bulk storage and buying capacity they will bring prices down.
Third point -
No company will invest millions of dollars in India if they dont see a market for that, every company would do a thorough resarch that means chances of failure for them is less.
This is just my view and no offence to anyone.
Om Sachdev,
No offence taken. I respect your perspective.
I am not against chance of lifestyle. It may chance with time but not because someone wants to sell a Japanese cuisine, all Gujaratis should start eating it. Well it mighbt attempted but works only if it serves what buyers want to taste.
FDI is different than Mukesh Ambani’s money. FDI has its own advantages but it can jeopardise country’s economy with a little uncertainty about country’s projected returns. FDI and FII investors are opportunists who will invest anywhere in the world where they get best returns. FDI returns go out of this country. They use various tax relaxation advantages and pay very little tax on their returns.
If you see recently FII pulled out big money from India in last two months, as a result rupee climbed down to 50Rs to 57Rs a dollar. FDI and FII has its advantage if those availability of funds can be used in building sustainable businesses so that business can survive even after funds are pulled out. As I understand, India has done very little of that. They rather have over-inflated prices of everything without much improvement of underlying substance or the quality of final products.
Middle level brokers will not be eliminated with big brands, they will be just replaced by big names. It is Indians’ illusion that they will be better off by replacing local traders with foreign multinationals. They are right for initial period only. Later on, it will be much harder to fight a cartel of multinationals and their organised corporate exploitation. If you don’t believe me, research about British dairy farmers exploitation by super markets. Producer and Customer both are going to be strangled by these big retailers.
Well said Om. Gujaratibhai, reading your comments it seems you have not understood the article well. I dont have dog in this fight,but i am amazed at the author’s ability to view things from different angle. He is not suggesting to force all Gujjus to adopt a different lifestyle, he is just saying how important it is to understand global values. Living in Bangalore, I can say Chennai is still way behind in the globalized lifestyle compared to here. Still those few spots are doing wonder for Chennai.
Also it will be in your interest to understand difference between FII (which is what Chidu and congressi want to cover for Black money) v/s FDI (which NDA tried hard to bring in). Unfortunately current FDI debate in India is only about retail. And that could be
coloring your views as you only focus on Retail issues.
If you read the series carefully, its about how to increase FDI in Manufacturing and increase global trade share for India.
To Somindu, cant wait for next one. Title looks very interesting.
Prithvesh (one of the millions)
Gujarati … I believe than you always have daal-bhat as your food all the time and never tested any coke, burger, burrito, pizzas, pasta etc etc etc … So narrow thinking. The place where I live have all different type of cuisines from all over the world and people love it. Evey body feels home.
Meanwhile FDI is not “UDHAAR”.
Example: Nissan manufacturing in Chennai is not only for domestic consumption but they make so many auto-parts that are being used now in all Nissan cars world-wide. I have Nissan Altima and I am proud of the fact that half of its part are made in India.
Please don’t sing this Swadeshi tune, if it was still then we would be using bullock-cart as you know none of these inventions are Indian.
jasonsaps,
Use your brain and stop judging me. I am not playing swadeshi tune.
First of all read the whole article above before commenting. You may understand the reason for whatever I said.
I eat what I enjoy eating. I may eat daal-bhaat or whatever and drive a bullock-cart But if you judge me by my food or my vehicle then I guess its not me who has narrow thinking.
I agree with the fact that India gained by getting that Nissan plant as a lot of unemployed people got jobs in it. Though it really amazes me that buying a foreign car makes someone think foreign.
If you have a logical argument, go on and I will reply. There is no need to be personal.
Hey Somindu!
A chance that I stumbled upon this post of urs! Im glad i did!
We gujarati’s have been reading for years on (almost a decade) how it had been lagging behind; hiw Ahmedabad has been left behind Bangalore and Hyderabad and all! So since childhood I’ve been very attached to this issue of competition of cities.
Having lived in Ahmedabad for years since birth (and Im a proud Gujju), and having seen the huge infrastructure upgradation Ahmedabad has had over the past 5years made me feel it’s a force to reckon with.
But my recent two-month stay in Gurgaon made me realise Ahmedabad has still a very long way to go and the big lacuna is the culture..culture of corporate..culture where one has the oasis (as u say) where anyone from India/abroad would feel at home) are missing!
Cities in gujarat have been very non-cosmopolitian.. and I must say this! I want Gujarat to be no.1..it’s my dream..but I also feel challanged that Tamil Nadu has already overtaken UP and AP and is now the seecond biggest economy in India after Maharshtra! Gujarat is still at 5th!
Thanks for the post! I’d sure be following it! Maybe it’ll help me in debates in my course of Masters in Urban Planning!
Gujarati…you are ignorant. FDI is NOT borrowed money. It’s called investment, which another country / firm makes in order to earn profits operating in India. First, get your freaking stats and concepts straight.
FDI is Foreign Direct Investment. It’s like capital invested in the country to operate it’s business and derive profit.
What an inspiring stroy of AOTS and their contribution. I do agree with food comments. Though i also feel Chennai is much more conservatiive in many sense than Gujarat.
gujarati,
u r not getting somindhu’s point. if u think FDI is udhhar then u dont know economics. his points are just about having enough facility for foreigners to make them feel home. this is not about u changing ur way of life. u can live how u like, but if u be rude to ur guests then no guests will come to ur place. simple!
In that case, should Gujarat have prohibition lifted ? Not that, I am against it.
FDI is a UDHAAR with a hope that UDHAAR will be transferd to someone else and we will never have to return that money.
FDI stays UDHAAR, unless that foreign investor becomes Indian in future or some Indian buys out that debt.
Agree with pb here.
Dear Gujarti,
As an NRI, I respect my culture and am more comfortable wherever I am allowed to keep it my way. Same applies to foreigners in India. What Somindu is pointing out is creating such oasis within. If you are afraid it will hurt local culture,
then is it a problem of outsiders or insiders? Think about it.
And your argument on FDI should become Indian. Do you even know that Maruti is classic example of sucecess of FDI in India. Remove it from history and show me automotive base of India?
Kinjal
ALL MY GOOD FRIENDS MANY WONDERFUL COMMENTS, & I CAN CLEARLY SEE THEY ARE ALL FROM THE BOOTOM OF YOUR HEART. MAY I SAY A FEW WORDS.FRIENDS INDIA IS NOT JUST A SINGLE COUNTRY ITS “AHUGE CONTINENT” 120 CR PEOPLE. 28 STATES OUT OF WHICH MANY ARE VERY HUGE.
IN THIS GLOBALISED WORLD WE HAVE ALL TO LIVE TOGETHER, WITHOUT SACRIFICING OUR CULTURE, RELIGION MOTHER LANGUAGES, & YET WE SHLD BE ABLE TO TALK ENGLISH, SOME FOREIGN LANGUAGES, & MAKE INDIA A GREAT TOURISM CENTRE ALSO. SMALL THAILAND GETS MORE FOREIGN EXCHANGE BY TOURISM THAN BIG INDIA. FDI IS GOOD IF WELL CONTROLLED.
AS MY FRIEND SAYS TODAY WE MAKE 25 DIFF CARS IN INDIA WITH EVER SO MANY MODELS. WE EXPORT QUITE A LOT NOW. SO INDIA IS GETTING ADVERTISED. AS LONG AS WE ARE ABLE TO BALANCE OUR ECONOMY WITH EXPORTS & IMPORTS, BALANCE OUR FOOD HABITS, & RETAIN OUR CULTURE TRADITIONS, OUR HINDU DHARMA, WE WILL BE A GREAT COUNTRY.
OFCOURSE NOT UNDER THIS CONGRESS BUT WITH A TRUE HONEST P.M , MY PICK IS “THE ONE & ONLY ONE SHRI NARENDRA DAMODARDAS MODIJI”. THANKS MY FRIENDS
The world is a Global Village and there is no more room for a Swadeshi movement India has had an average GDP growth of 8 % over the last
decade and has more than doubled its per capita income in this new century .
It could not have achieved this without FDI and latest technologies .