News: "India needs to open up retail, media sectors"

(TH 01/04/2006) New Delhi : India will have to open up retail and media sectors before it can match China in terms of foreign direct investment inflows, according to the Editor of Time International, Michael Elliott.

Acknowledging India's "spectacular success" on the economic front in the recent years, he said it was nowhere near as welcoming as China for foreign investors. Citing the case of retail and media sectors, he said there are many potential investors but rules and regulations still make it difficultfor them to come to this country.

Mr. Elliott told The Hindu that at the same time the disparity in economic growth between the two countries was merely "the time factor," referring to the fact that China began its reforms 24 years earlier than India.

He said the issue of governance — of India having a slower democratic system was no longer viewed as a major factor.It could be argued that India's slightly slower pace of decision-making led to policies, which were ultimately more widely accepted.

Sceptical attitude

Mr. Elliott, who is notionally Hong Kong-based, but keeps shuttling between that city and London, said a key factor for the huge FDI flows going to China was the obvious and systematic effort made to attract foreign investment. India always had a sceptical attitude towards foreign investment. He felt India should "be more welcoming" in terms of rules and regulations.

If India wanted to follow China it needs to make changes in strategy.

Mr. Elliott also pointed out that there are several areas where India had moved ahead of China.

These included the fact that many Indian companies were well on the way to becoming branded global companies. There are only a few Chinese companies which have global positioning unlike corporates in India.