STEREOTYPES about India’s outsourcing being confined to back office operations have been eroding just as the passage of time and economic development has washed away many other misperceptions, especially in light of the growing number of global research centres being located in India, says Homai Saha, Ambassador of India to Slovakia. She says that her country’s outsourcing is no longer confined to simple outsourcing but is now based on innovation and added value. Saha does not look at future economic growth in India, which escaped relatively unscathed from the economic crisis, as part of a race with other countries but rather as a positive force that can lift up the almost 300 million citizens who currently are living below the poverty level.
The Slovak Spectator spoke to Ambassador Saha about her thoughts about India's economic development, global climate change, the business environment, and academic exchanges and their challenges.
The Slovak Spectator (TSS): By the end of last year, several economists posed the question: could India’s economy, which has emerged mostly undamaged from the global economic crisis, grow faster in 2010 than China? What, in your opinion, are the main challenges that India’s economy faces today?
Homai Saha (HS): India was fortunate in emerging relatively unscathed from the global economic crisis. Even in 2008, we saw growth of around 6 percent and in 2009 it is anticipated that the Indian economy will grow by around 6.5 percent. But the growth rate is also to be seen in terms of a drop from the growth rates of 9.6 percent back in 2006 and 2007. I would prefer to see growth in the Indian economy as a positive phase in terms of development and not in the sense of any competition with another country.
The Indian economy faces the challenge of bringing the economy back to the high annual growth rate of 9 percent so as to be able to pull up the almost 300 million who live below the poverty line and ensure that they are part of the development process. Growth has to be inclusive and must ensure that development is not confined to a group of people or just in the cities, but is also targeted at people in rural areas where 72 percent of our population lives. We also need to provide the people with high quality public services, better infrastructure and power for industry, security and the rule of law to all citizens with accountability and transparency.
TSS: What areas of the Indian economy could be attractive to Slovak businesses that might be planning to look a little further east than Slovakia’s eastern neighbour Ukraine?
HS: Slovak businessmen have recently started looking more positively towards India to diversify their trade options. While Slovakia is a country with major production centres for automobiles, India is a significant player in the global automotive supply chain and supplier of a range of high-value and critical automobile components to global automakers. We exported about $3.6 billion of auto components in 2007 and 2008. India is also one of the largest producers of bulk drugs and generics. We could be a source of relatively cheaper medicines for the public health system in Slovakia. India, as a major IT centre, can provide services to Slovak businesses and multinationals present in Slovakia.
We are also leaders in IT training institutes whose quality has been recognised the world over. In addition, there is an abundance of scientific talent in India which can be sourced by companies and research institutions in Slovakia. To give you an idea of the human resources – India has approximately 200 research and development centres which belong to multinational corporations. India’s Silicon Valley in Bangalore is fast becoming an important centre of innovation with major multinationals like Microsoft, Intel, Google, IBM and GE, to mention but a few, which have opened R&D centres in India. The common belief till now has been that India’s outsourcing is confined to simple outsourcing rather than outsourcing based on innovation. This myth is fast being eroded, as proved by the location of global research centres in India to make use of the talent available. To support these research institutions, India too needs to invest in its academic research institutions and engineering colleges to ensure that there is availability of well-trained manpower.
TSS: What do you see as being the main attractions of Slovakia’s business environment for Asian countries? Is there anything that you consider to be a hurdle in the way of these businesses?
HS: Slovakia is ideally located in Europe, with easy access to both west and east European markets. Its open economy, 19-percent flat tax rate, and incentives for locating production centres with FDI [foreign direct investment] make it an attractive destination for investment. Also the location of several multinational organisations in Slovakia, with the advantages of doing business with them, is clearly an attraction for India.
As you are aware, India’s trade with Czechoslovakia was the highest in the region. After the separation, we continued our trade contacts with the Czech Republic at almost the same level but the same was not true of Slovakia where in the first few years trade fell. It has started picking up since 2004 but the increase is nowhere near the potential.
So if you ask me if there is a hurdle in the way of business, I would say that our markets have grown far apart and there is insufficient knowledge of each other’s capabilities. Another reason, which I never tire of repeating, is that Slovakia had pretty much closed itself to Indian businessmen. It is only now, after Slovakia joined the Schengen region, that Indian businessmen have greater ease in coming here. Slovak businessmen, on the other hand, have always been encouraged to visit India and see the potential for themselves.
TSS: What are the main challenges that India faces in fighting climate changes? Your country was among the most watched players at the recent Copenhagen Climate Change Conference. How has your country responded to the outcome?
HS: India’s view is that the adverse consequences of global warming will impact developing countries like India most heavily. Let us be clear: the accumulated stock of GHGs [greenhouse gases] in the atmosphere is mainly the result of carbon-based industrial activity in developed countries over the past two centuries and more. We are fully committed to working with the rest of the world to preserve and protect our environment. This is our common heritage. The challenge for us is that India will continue to be severely impacted by climate change precisely at a time when we are confronted with huge development imperatives. For our part, we have therefore adopted and started to implement a major National Action Plan on Climate Change and eight National Missions have been set up, relying upon our own resources.
Our targets include installation of 20,000 MW of solar energy capacity by 2022, improving energy efficiency by 20 percent by 2020 and adding an additional 6 million hectares of forests.
India has already declared that even as it pursues its social and economic development objectives, it will not allow per capita GHG emissions to exceed the average per capita emissions of the developed countries. This effectively puts a cap on our emissions. We are willing to do more provided there are credible arrangements to provide both additional financial support as well as technological transfers from developed to developing countries.
The Copenhagen Accord recognises the principle of common but differentiated responsibilities and the respective capabilities of the signatories in combating climate change. It also recognises the need to limit the global temperature rise by 2050 to below 2 degrees Celsius above pre-industrial levels. It clearly sets out this goal in the context of equity and sustainable development. This ensures that in achieving this goal, the right of the developing countries to have an equitable share in access to global atmospheric resources cannot be ignored and is ensured. The Copenhagen Accord speaks of “cooperation in achieving the peaking of global and national emissions as soon as possible” but also recognises that the time frame for peaking will be longer in developing countries while poverty eradication is the overriding priority of the developing countries. The accord does not speak of a specific year for the peaking for developing countries, which is something the developed countries have pressed for. This is another area of success at Copenhagen.
Another accomplishment for us at Copenhagen is that under the accord, the developed countries have agreed to set up the “Copenhagen Green Climate Fund” to provide resources approaching $30 billion between 2010 and 2012 to support the adaptation and mitigation actions of the developing countries.
TSS: India provides two scholarships to Slovak students annually. How would you evaluate the interest of Slovak students in India? Where do you see more room for academic cooperation between the countries?
HS: Unfortunately, the academic scholarships have been inadequately utilised. My feeling is that there is hesitation among students in Slovakia about going to a relatively unknown country like India. The extreme weather is also a deterrent. We have two Indian students in Slovakia who have done remarkably well in their areas of research. A constraint on both sides is the lack of adequate stipends to make the experience of studying abroad more attractive. Finances are always the major bottleneck. Of course, if it is a labour of love then few people will be found. We also need to have more tie-ups between universities, but there again funding is an issue.
In addition to the academic scholarships, we give 10 slots under the Indian Technical and Economic Cooperation (ITEC) Programme under which students from Slovakia go to India for short-term courses like IT, proficiency in the English language, business training, accountancy, etc. These have been extremely popular and due to great demand we increased the slots from 5 to 10 in 2005.
TSS: Your embassy organised the Mahatma Gandhi essay competition. What was the main intention and how did schools respond?
HS: Let me first thank The Slovak Spectator for responding so positively and putting up the winning essays on your website, in the Spectator University section. This will act as an encouragement for the students. My intention in organising an essay competition on the Relevance of Mahatma Gandhi in the 21st century in the three International Schools in Bratislava was to provide an incentive for students to read about the life and ideals of Gandhi. It has been recognised the world over that Mahatma Gandhi’s methods were not relevant only for the time and situation in which he lived but are equally relevant in the present. Moreover, the United Nations recognised Mahatma Gandhi’s birthday, October 2, as International Day of Non-Violence. The schools responded very positively to the competition. We would like to work with them in future years to hold the competition so that the life of Mahatma Gandhi becomes a regular segment in their academic curriculum.
TSS: Any cultural event that involves Indian artists attracts a packed audience in Slovakia. What have been the most significant cultural projects that your embassy has supported? What is your perception of how the Slovak audience responds to Indian culture?
HS: The embassy tries to bring Indian dancers and musicians to Slovakia so that Slovak audiences are exposed to our cultural heritage. In the last two and a half years, we have brought three famous Indian classical dancers who have performed not only in Bratislava but also in Žilina and Banská Bystrica. Slovak audiences have been extremely receptive to their performances even though their exposure to classical Indian dance forms has been limited. Unfortunately, finance remains a major constraint and we are not able to bring as many artists to Slovakia as we would like.
TSS: What aspects of Slovak culture might be interesting for Indian audiences?
HS: Traditional folk dances of Slovakia would be of great interest to Indian audiences. As you know, we have a lively folk dance tradition in almost all the states of India. But equally ballet and modern dance is appreciated in India. In 2007, a modern dance group from Banská Bystrica visited India and their performances were highly appreciated.
TSS: India has been listed regularly among the top world tourism destinations. The Indian tourism authority has extended one of its major tourism campaigns. What was the reason behind the move? In what ways does the Indian government support tourism?
HS: India is an extremely diverse country geographically and ethnically. We have among the highest mountains in the world down to the beautiful beaches of Goa and Kerala. Our long history makes India an attractive tourist destination for those who are interested in history, architecture and historical monuments. The diversity of our people is of great interest to the photographer among tourists. There is adventure tourism. The India Tourist Office which is located in Frankfurt supports efforts by tour operators and individuals who would like to plan visits to India. It is also available to help travel agencies contact their counterparts in India so as to make their tour a truly memorable experience.
You have seen our Incredible India campaign. We had the Visit India Programme of 2009 to provide incentives for travel to India. This has been extended to March 2010. We need to position India as a global brand and also to promote it systematically as an engine for domestic growth and employment. For the promotion of tourism the government works with the private sector to provide the necessary infrastructure.
25. Jan 2010 at 0:00 | Beata Balogová