作者：《第一财经周刊》记者缪琦 Author: Miao Qi, staff reporter of China Business News
In early 19th century, several engineers arrived in India for the first time in their life, with nothing but their core techniques. They soon found that everything here was in the control of the government, and “free development” was a mission impossible. But they also became fond of the unique fun of this market, and decided to stay. From the first studio to the first factory – although with borrowed money – they never thought that their endeavor would one day grow into the largest corporation group of industrial engineering of the world. Larsen & Toubro Limited (hereinafter referred to as L&T) tells a typical Indian story with every single step of its growth.
Starting with virtually no money, they initially got rich with their creativities and engineering techniques. Right now, L&T has become India’s largest company of engineering and construction, and it also specializes in the subfields of high-tech engineering, nuclear power engineering, equipment manufacture, service industry and information technology, etc. The annual sales volume of L&T has exceeded 15 billion US dollars, and it now boasts more than 100 thousand employers, and extensive businesses in over 30 countries around the world.
The Indian government has restrictions of FDI (foreign direct investment) in a score of industries, including agriculture, stockbreeding, mining, railway infrastructure and financial services. If Chinese companies are interested in investment in India, they have to found a joint venture with Indian companies before they are qualified for the bidding process. As a Indian company of international fame and well-rounded services, L&T soon becomes the partner of a number of Chinese companies who aspire to break into Indian market. The Indian Infrastructure Co., Ltd of Shanghai Urban Construction Group has recently founded a joint venture with L&T, and together they will take care of the railway project of New Delhi, capital city of India.
In a recent interview with China Business News, R. Shankar Raman (hereinafter referred to as Shankar), CFO of L&T, believes that India will obviously benefit from Chinese investors if they can bring funds and technologies together. He also believes that technology is the essential motive of FDI, and Chinese investors are supposed to give priority to technologies, rather than funds, when they decide to invest in India.
和中国企业好像“夫妻关系” We’re like “husband and wife”
Shankar defines the cooperation between L&T and Chinese companies as “encouraging”. He says that L&T’s importation of equipment from China amounts to 100 million US dollars. L&T envies the China’s powerful capacities of infrastructure constructions, and has gained a lot of technologies and experiences via mutual cooperation.
“India’s potential in infrastructure constructions in huge. China is a perfect example to show what infrastructure constructions mean to national economy, and India can learn from and even copy China’s successful mode. As India’s infrastructure grows complete and mature, the opportunities are also increasing for both countries,” Shankar thus tells reporter of China Business News. He also mentions that around 35% of the electrical power equipment in India is provided by Chinese companies, and L&T is regarded as a powerful competitor of them in this field.
Shankar has a very vivid comparison to describe their relationship with Chinese companies: “We are like husband and wife – we argue sometimes, but on most occasions we benefit from each other and love our cooperation.”
印度想像中国那样高速发展 India wants to copy China’s mode of rapid development
In Shankar’s opinion, India has two choices. It’ll take India 30 to 40 years if she decides to consummate her infrastructure constructions in petty paces in accordance with her own economic capacity, or India can copy China’s mode of rapid development. “If we want to copy China’s mode, we need rapid-growing economy like China. If we want to achieve that target, funds are must at this moment.”
From a global perspective, Shankar says, India is showing her hospitalities for foreign investors. India is attractive to foreign investors with her huge market, abundant young labor forces, well-educated talents, language convenience and well-rounded legal system. “Not every country can provide a sound business environment like India. No wonder the contact of senior leaders of both countries is becoming more frequent in recent one year or two.”
Shankar also stresses that China and India are very different countries, and it takes time and energy to learn the cultures and operation rules of each other. Likewise, it takes very long time for Indian companies to shine with their investment in China. “Chinese and Indian people need to communicate with each other more often. Let’s look back to the history of 16thcentury, China had very good channels of communications and exchanges with India. But their ties were weakened in decades ago, and now we are in urgent need of a change. Even closer ties are to be established between the two peoples, and our mutual trust will finally lead to strengthened business cooperation,” he says.
除了钱，印度最期待中国技术 India is expecting the technologies of China, not only money
Shankar believes that it’s a perfect time now for Chinese companies to invest in India. With the communications between senior leaders of both countries becoming more often, the negative factors of their bilateral relationship is left in the past, and they are working towards a pragmatic end of economic and commercial cooperation.
The FDI of Chinese companies in India only accounts for a small part of the total number India receive. Shankar believes thatIndia will obviously benefit from Chinese investors if they can bring funds and technologies together.“I think thattechnology is the essential motive of FDI, and Chinese investors are supposed to give priority to technologies, rather than funds, when they decide to invest in India. The Indian government welcomes the importation of your technologies.” Through his observation, most Chinese companies value the huge potential of product sales in Indian market, but FDI is not too much concerned.
Shankar also suggests that Chinese companies find trustworthy local partners before they come to India, which he sees as the key to success. “To achieve perfect localization in India, Chinese companies need an “Indian face” to communicate with local governments, institutions, communities and residents. Language barrier is not a problem for funds and technologies, but it is a must for localized operation.” He studies the successful cases of foreign companies who invest in India, and finds that most of them found the right partners here, and then started their localized operation in steady paces.
投资印度未来的三块蛋糕 Three pieces of cakes for investors who eye on India
Right now, Indian Prime Minister Modi is making great efforts to boost infrastructure constructions in India, and Shankar regards that as a piece of cake for investors who eye on India. Apart from infrastructure, abundant business opportunities also lie in the fields of urban constructions and energies. For Chinese investors, it is by no means an easy task to have a bit of the cake.
Shankar understands that transportation is the primary choice when people talk about infrastructure constructions: highway, high-speed train and subway, etc. The funds of these projects usually come from three resources: federal government of India, commercial banks, and large companies like L&T. But there are too many restrictions for funds of commercial banks, which usually come from individual savings with terms of 3 to 7 years, but the investment period of infrastructure constructions usually lasts for 15 to 20 years. In light of that, the government is considering including enterprise investment of social insurance, whose period of investment return is relatively longer. He suggests that China companies find reliable long-term fund support before they consider investment in infrastructure constructions.
The investment opportunities are also huge in urban constructions in India. Shankar introduces that upgrade is an urgent issue for many small and micro towns and villages of India, and the “Smart Cities Mission” also calls for hundreds of millions of US dollars to finish the transformation program. Besides, urban constructions include infrastructure programs like hospitals, schools, office buildings, churches and temples, and abundant opportunities lie within. In a word, opportunities are everywhere in the fields that can improve the living standard and quality of Indian people – water, electricity, transportation, residence and “Internet of Things” (a.k.a. “Smart Cities Mission”).
Apart from that, you cannot ignore the huge opportunities brought by energy. Inspired by the global influence of “Made in China”, the Indian government encourages domestic manufacturing industry with the initiative of “Make in India”. To boost the manufacturing industry in India, India demands a well-operated electrical power system and adequate power supplies. In the past decade, China-made equipment swarmed into Indian market, and now nearly half of electrical power equipment in India is provided by Chinese manufacturers. Besides, India is in urgent need of oil and gas resources by importation, and seawater cleaning program and circulation of water resource also demand more input. Solar power generation is also a program strongly promoted by the Indian government, and the costs are gradually reducing.
“Who would expect the omnipresent high-speed railways and trains decades ago? But China managed to do so. It’s a great lesson for India, as engineering construction is of vital importance for us in the future,” Shankar says.
The middle-aged Indian also confesses that we can expect more for the efficiency of the Indian government. “I hope that the Indian government has quicker decisions for programs of infrastructure constructions, and makes sure that they are executed without delay. After all, India is a large democracy, and the government has no right to act at its own will – but negotiations mean costs of time.
（感谢中国工商银行孟买分行的帮助。） (Special thanks to the Mumbai branch of Industrial and Commercial Bank of China)