European leaders are keen to see how PM Modi interfaces with the US establishment: Erik Belfrage

European leaders are keen to see how PM Modi interfaces with the US establishment: Erik Belfrage
European leaders are keen to see how PM Modi interfaces with the US establishment: Erik Belfrage
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The News Minute | September 25, 2014 | 01:06 pm IST

Erik Belfrage is a go to person. Ministers and CEOs, bankers, financial experts and diplomats call him at 3.a.m. to bounce ideas off from. Having spent 25 years as an advisor to one of the largest financial and industrial groups in Sweden, Belfrage is as much at home in Bangalore as he is in Tel Aviv, Washington or Geneva.

Now President and Chairman of the Board of Consilio International AB in Stockholm (Sweden), he shared his views on Indian Prime Minister Narendra Modi’s visit to America, the importance of China in the world, where Europe fits in the equation and what the world expects from India with Chitra Subramaniam, Editor-in-Chief of The News Minute (TNM). Excerpts:

Indian Prime Minister Narendra Modi will travel to the United States this week. How does Europe see this visit?

It is a very important meeting for us Europeans for two reasons. One, we don’t really know how the new Indian Prime Minister will engage with the US establishment and what those dynamics will be. This visit will help us understand that better.

The second big item for us is the Trade Facilitation Agreement (TFA) which is stuck and we hope India will agree to come on board. It is not in anyone’s interest including India’s to be isolated and hopefully it will not come to that.

Don’t you think India has a point on TFA?

Yes, they do and I remember the same types of issues come up constantly. It is important to make the difference between what is useful and what can be misused. Of course we can go ahead without India through other mechanisms, but that will be long-drawn and unhelpful for all.

Chinese President Xi Jinping visited India recently. What are the Chinese looking for in India?

The visit was a classical movement. There is a new Prime Minister in India and so the head man from across the border comes calling and makes all the right noises about economic relations.

The visit was vitally important for Xi Jinping to see first-hand what the possibilities of an anti-Chinese scenario developing with the strengthening of Indo-US relations and how to calibrate their own policy vis-à-vis the Americans.

I know there are tensions at the borders and there are incidents going on. There will be no fundamental change between the two countries as there’s no love lost, but there is also respect and both countries can co-exist in the region.

Prime Minister Narendra Modi wants to replace red tape in India with a red carpet for investments. What are some of the first things investors in India expect?

Pardon me for being a bit cynical here, but we’ve heard this many times for many years. When Prime Minister Manmohan Singh took office, he and his ministers said the same thing – terrible red-tape, corruption etc. While everybody applauds the new Prime Ministers and we are registering a more nationalistic tone, money is not going to come rushing into India. European and American companies are ready to test the waters again.

How does the world of international business view India? Manufacturing hub, back-office, or something else?

What I am hearing is that companies are extremely happy with the manufacturing capabilities and capacities in India, but these get stuck in red tape and issues. The back-office story is fading into the background and this is where there’s a huge opportunity for Indians and European as we see India as a market.

Here, there’s a parallel with China which was earlier thought of as only a manufacturing hub, cheap labour etc. till we realized that it was a huge market.

If all goes as promised, I see European and American companies coming in, establishing brands, creating access, getting loyalty – normal business practices in short.

What is your advice to international business people and investors looking to invest in India? 

That they absolutely need to deeply understand the Indian culture, their thinking and their way of taking decisions. You need to be very present in the country and if you are a large European company coming to India at least 5-6 times a year is a must.

In two words, working in India requires presence and understanding.

Chitra Subramaniam launches a new series of conversations and interviews with national and international business, political, cultural leaders and innovative thinkers.

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