Is Modi's salesman-like pitch in Malaysia any good for India?
The PM’s strategy consists of quoting Western entities from diverse fields to drive home his point.
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In keeping with the global trend in which presidents and prime ministers are increasingly acting as chief salesmen of their countries, Prime Minister Narendra Modi on November 21 put on his most charming visage to hard sell India in Malaysia. He did so at two different high tables in Kuala Lumpur: his opening remarks at the 13th India-ASEAN summit and his address at the ASEAN (Association of Southeast Asian Nations) Business and Investment Summit.
Notice his salesman-like pitch at the latter event where he wooed Malaysian investors thus: “We are at a take-off stage. I invite you to come and see the winds of change in India. Winds do take time to cross the borders. That is why I am personally here to invite you. When you come, you will get the wings of a new business environment. And once you are there, I assure you of my full cooperation.”
But what must be noted about Modi’s strategy is his quoting of Western entities from diverse fields – institutions, rating agencies and media outlets – to drive home his main pitch that India has been truly shining since he took over the reins of the country 18 months ago. It is his way of telling the world that the Western set-up, which is truly independent and his staunch critic, has now turned around and showered accolades on his government.
This reflected in Modi's stance in Kuala Lumpur. He said: “The IMF (International Monetary Fund) and World Bank have expressed even better hope for our economy this year and after. The Economist magazine this week stated that ‘India is in healthier shape than any other big emerging economy’. That is how we have jumped by 12 ranks in the World Bank’s 'Ease of Doing Business Report of 2016'. The industry is realising the benefits of these changes. The Index of Industrial Production in the current year shows a distinct improvement over the previous year. We are working in all ways to make India a global manufacturing hub.”
What is more, Modi did some chest-thumping in Malaysia by pointing out the following achievements of his government:
1. GDP growth is up and inflation is down.
2. Foreign investment is up and the current account deficit is down.
3. Tax revenues are up and interest rates are down.
4. Fiscal deficit is down and the rupee is stable.
5. The sentiments for private investment and inflow of foreign investment have turned positive. Foreign investment is up 40 per cent.
6. India has been consistently ranked as the most attractive investment destination by several global agencies and institutions. 7. India has also improved its United Nations Conference on Trade and Development (UNCTAD) ranking of investment attractiveness. Against 15th so far, India is now at the ninth place.
8. India has also jumped 16 places on the World Economic Forum’s global competitive index after five years of decline in the list.
9. Moody’s have upgraded the outlook for India.
Modi was also at pains to tell his ASEAN audience why and how India today is the most ideal investment destination. He pointed out that his government has allowed and enhanced FDI levels in key sectors including insurance, defence and railways and now FDI in most of these sectors have been put on the automatic approval route.
Besides, he pointed out his government has also rationalised FDI policies in many sectors, including construction, plantation and medical devices and has now allowed composite caps for foreign portfolio investors in all sectors where FDI is allowed. Earlier, portfolio investments had a separate cap.
Like a clever salesman, Modi also reeled out the following attractions of India as an ideal investment destination:
The licensing regime has been greatly liberalised and almost 60 per cent of defence items have been taken out of the licensing process. Retrospective taxation has been ended and capital gains tax for Real Estate Investment Trusts (REITs) rationalised.
Modi’s detractors may still pick holes in many of his averments mentioned above, but one remark by Modi will definitely provoke his political opponents back home. He said his government has introduced the Goods and Services Tax (GST) Bill in Parliament, aimed at creating a unified system of taxation in the country, and expressed confidence of rolling it out in 2016.
This is unlikely to happen anytime soon and may remain a political chimera for the Modi government.