On his visit to Kuala Lumpur to attend the ASEAN-India summit, > Prime Minister Narendra Modi was in familiar form , pitching India as an investment destination to the East Asian countries. Taking credit for turning the Indian economy around since his government “took office 18 months ago”, Mr. Modi > outlined his plans for economic reform , which he said was a “way station on the long journey” to the transformation of India. He also offered specific opportunities to ASEAN countries on investing in infrastructure in India, particularly in Metro Rail systems, housing, road, rail and waterways. While Mr. Modi’s oratory skills are powerful, it is time to wonder whether his audience, only too eager to invest in India last year, is still listening as keenly to his message. A year after they called India an ‘emerging tiger’ too, the narrative has shifted. To begin with, several of the promises Mr. Modi gave at the > ASEAN-India summit are reiterations of promises he had made a year ago, and many are beginning to wonder if some of them, like the promise of the Goods and Services Tax (GST) legislation, can be kept, given his relations with the Opposition in Parliament. Mr. Modi has been keen to emphasise that a liberalised IPR patents regime is just around the corner, more in line with what the U.S. and the EU countries have been demanding, but it is unclear if this would militate against India’s Patents Act that is > in line with the TRIPS agreement . Finally, many of the commitments he has given, like the plan for a mammoth increase in renewable energy to 175GW, will require at least $200-$300 billion in funds and debt payments, which are yet to be clearly sourced. The Prime Minister’s well-honed pitch now needs some pace on the ground, so that the reality begins to match the rosy picture he has been painting.
While he is quite right to quote recent endorsements from the > IMF , >the World Bank , and even The Economist magazine, the Prime Minister must acknowledge that India is not as full of promise for fund managers, some of whom are already turning conservative on the India market, that exports have declined for the past ten months, and there is a decrease in the growth of domestic demand, particularly rural demand. Meanwhile, even as India “acts East” in order to sew up the India-ASEAN FTA on services and investments, ASEAN countries are themselves “looking East” much more, with the launch of the >Trans-Pacific Partnership with the U.S ., that India is not a part of. It is also time to note that the global narrative has changed as well, with the OECD now revising its world GDP outlook on the back of what it calls a “dramatic global trade slowdown”, especially in emerging markets. At a time like this, it is important that India shifts its focus from marketing to delivery, and shores up its image as a credible market and investment destination, where its word is matched by deed.
