tMichaelB is the web site for Tom Bengtson, who writes about business, religion, family and politics.

Tuesday, October 23, 2007

Do they really want us?

While we are being greeted warmly, I am picking up little undercurrents which give me some skepticism about the prospects of conducting business in India. On Monday, a local business official expressed indifference toward on Minnesotan’s concern over high import tariffs, and yesterday a key government minister expressed little interest in helping a group of Minnesota business leaders bring their products and services to India.

About 20 members of the Minnesota trade mission delegation visited the Ministry of the Environment & Forests on Tuesday. Several delegates represent companies that produce products that could help India reduce pollution and waste, or otherwise operate in a “greener” fashion. Minnesota State Senator Satveer Chaudhary opened the meeting, while Steve Riedel, Minnesota’s international trade representative, following up. We were fortunate enough to meet with Meena Gupta, the Minister of Environment & Forests. She was accompanied by an aide R.H. Khwaja, who was educated at the University of Minnesota.

Mark Aulik, president of a Jordan, Minn.-based company that helps meat processors render typically unusable animal parts, asked for help bringing his product to India. Sam Roy, president and CEO of EPS Technologies of Mankato, Minn., sought direction for his effort to bring technology to the country which would help increase the efficiency of diesel engines in trucks and busses. “We want to know how we can get our technology to your country. Can you give us a clear vision?” Roy asked.

Minister Gupta’s answer was disappointing. “We are the ministry of the environment,” she said. “You need to visit with the ministry of commerce … This ministry will not be able to give you an answer.”

I thought it was an odd response to a group of influential business leaders who had traveled half way around the world to explore business potential in India. Even if she really couldn’t help, I am surprised that she didn’t offer a more politically accommodating response. Her blunt answers really did not make anyone feel particularly welcome.

Aulik, who has spent considerable time traveling around India, offered a suggestion about pollution control laws that Gupta utterly rejected. He suggested that the country’s current pollution standard on waste water from factories is so stringent that no one tries to meet it. He said he had tested drinking water from the tap in several Indian locations and found that even that water did not meet the requirements for industrial waste water. Aulik said that if the municipalities can’t even clean up the drinking water to meet industrial pollution standards, how can companies be expected to meet that standard?

Aulik suggested lowering the standard to something more attainable. “If people worked toward an attainable level and accomplished even half that goal, it would still be a significant improvement over current conditions,” Aulik explained.

Gupta outright dismissed the suggestion. “It would not be very politically acceptable to lower the standard,” she said, ignoring the practical implication of her position.

Also, when Boris Miksic, president and CEO of Cortec Corporation in St. Paul, explained an agreement his company just reached with an Indian state to sell biodegradable plastic bags there, Gupta showed little interest.

And, Carmine D’Aloisio, a member of the U.S. Embassy staff in charge of commercial affairs, commented that prohibitively high tariffs keep a lot of environmentally sound technologies from being imported into the country. Again, Gupta offered no response.

Gupta’s indifference matched the attitude that I picked up from Phiroz Jandrevala, head of the Confederation of Indian Industries. In a luncheon presentation on Monday, Jandrevala seemed to offer a particularly callous response to a question about high tariffs which make it difficult for many American companies to bring products into India. He essentially told the business audience to pass the cost on the buyer. He refused to acknowledge a problem with the level of tariffs. While high today, he noted tariffs were much higher 60 years ago.

Perhaps the responses from Gupta and Jandrevala are a sign of the country’s success. So much foreign business investment is pouring into the country that they don’t need to concern themselves with barriers that might be making it difficult for small and medium size companies to do business here.

In my mind, the jury is still out about whether India is a good place for American companies to do business. On the one hand, there is definitely opportunity here, and the initial country reaction to newcomers seems welcoming. But, on the other hand, when you start considering specific details, some business and government sectors do not appear overly excited about the prospects of foreign companies setting up shop here.

No comments: