Date:02/05/2003 URL: http://www.thehindu.com/2003/05/02/stories/2003050203541200.htm

National

Bonanza likely for Indian corporates in Iraq

By Sushma Ramachandran

The new CII president, Anand Mahindra

NEW DELHI May 1. India's proximity to Iraq is likely to bring a bonanza for the corporates, which expect to offer the most competitive manufacturing capabilities, services and manpower for the post-war reconstruction effort.

Looking forward to these opportunities, the new president of the Confederation of Indian Industry (CII), Anand Mahindra, has commended the Government's diplomacy in not condemning the U.S. war on Iraq outright, since it is likely to yield rich dividends ultimately for Indian corporates.

Conceding that the lion's share of contracts will go to the U.S., he argues that Indian companies will be the most competitive, given the proximity to the region and their ability to provide quality at a relatively low cost.

In addition, he feels that the huge demand for manpower is going to be another opportunity for the country, with its large pool of skilled workers who will send remittances back home.

Speaking to The Hindu shortly after taking over as the CII president, Mr. Mahindra highlighted the growing competitiveness of the Indian companies with brands like Scorpio and Indica in the automotive sector now being quoted as examples of the way in which India can produce quality products at rock-bottom prices.

Describing domestic engineering companies as "sleek panthers" rather than the "lumbering beasts" of the pasts, he said the external world is recognising this fact.

He was also upbeat about the prospects of India becoming a major food exporter.

Mr. Mahindra's company, Mahindra and Mahindra, is already involved in a major food production project in Punjab, which is planning to grow durum wheat and barley, apart from other crops.

He said several companies have entered this sector and are identifying products needed abroad and then working backwards to provide farmers seeds, technology and finance, to produce crops as varied as maize and celery.

He dismissed reports of a rift between the apex industry association and the Government, even though the Finance Minister, Jaswant Singh, dropped out of attending the national conference at the last minute.

Not only had the most dynamic "change-makers" in the Government attended the conference, he stressed it was equally important for the CII to seek the cooperation of all other stakeholders in the effort to boost economic development.

In this context, he said the CII would now be giving a thrust to interaction with State Governments, as reforms at this level were the most effective.

The process has already begun with Chief Ministers of Punjab, Madhya Pradesh and Andhra Pradesh. On the Severe Acute Respiratory Syndrome, Mr. Mahindra felt there was a silver lining to the epidemic for the industry. Making the caveat that India like other countries had to be extremely careful about the far-reaching impact of the disease, he felt it could lead to a change in mindset, especially of investors who had focussed only on China.

It could bring about a realisation that man-made disasters are always possible and there could be a shift in investors' strategy from looking at just China to considering both India and China.

Apart from the potential of post-war Iraq projects, he said the economy would benefit greatly from the decline in world oil prices. The flow of oil from Iraqi oilfields was bound to keep oil prices low and at the macro-economic level, this was a much bigger gain than the possible loss to India from oilfields, where they were earlier seeking options.