Chopra Speaks On GE, India's Place In The Global Economy

The President and CEO of GE India, Tejpreet Chopra spoke at a breakfast meeting at the Omni Los Angeles Hotel here, to Asia Society members and guests on Sept. 11. The head of the huge corporation who is responsible for directing GE’s strategies for growth in India held the rapt attention of the group of entrepreneurs, businessman, economists ,academicians and students with a fascinating overview of India’s place in the changing world scene, its spectacular economic growth in contrast to its grinding poverty and the role GE India plays in contributing towards globalization and meeting its social responsibilities. Chopra explained the reasons for the international interest in India which has resulted from its large economy created by its billion plus population of which 70% is aged below 35 which makes a huge consumer base. The fact that it is a democracy also inspires confidence in investors as there is transparency in transaction and policies. The liberalization policies of the Government introduced in the early 90s has transformed the middle class which has increased from a count of 15 million to almost 200 million today , a market which the world can no longer afford to ignore and from the 15th spot as the most preferred destination for foreign investment in 2006 it has leapfrogged into 2nd place now. These changes also bring about challenges , the biggest of which is inflation which is at 12.5%. Other problems include lack of infrastructure, the continuing emergence of inclusive growth , the increasing divide between the rich and the poor, the shortage of qualified and skilled people and the dramatic margin compression in profits because of increase in commodity prices forcing business to explore ways to maintain it at international levels. But what he said is really driving the country is a new class of entrepreneurs who move with unprecedented scale and speed because they now have the capital and the ability to go out to the world and buy technology and markets resulting in huge acquisitions and assets abroad. He cited Reliance which in a few years had grown from a textile company to a diversified group of over $75 billion which through its unique strategy has been able to reduce its costs to enable it to stay way ahead of international competition.. Another spectacular example is ICICI Bank. Others he spoke about were Suzlon which utilizes wind power at lower costs, the Tata Nano car will roll out cars at an unthinkable $2500. Another success story he talked of was Bharti Airtel which can serve 300 million subscribers with a 40% margin at a fraction of the cost of its international counterparts with far less bandwidth. In this context Chopra said GE is also seeking to redefine the way to established price lines which do not exist any where else in the world to remain ahead and competitive. They have restructured into four groups namely energy , technology infrastructure , financial services and Media & entertainment. Jack Welch’s foresight in creating an outsourcing business has resulted in 73,000 jobs. He also briefly described the innovations the organization has introduced in the manufacture of aviation and locomotive engines , new techniques of imagery for in the health care sector and the introduction of a portable ECG machine for use in rural India. The challenge he said is to find the way to make its range of products benefit the masses and improve their quality of life. Looking into the future he said GE , in the next five to eight years plans to invest $500 billion into core infrastructure, 30 into healthcare and 25 in financial services in India. In closing he added the business models being developed in India today would perhaps determine the way business is conducted and if one wins India , one will be successful globally. Being a democratic country he reminded listeners all projects in India are long term plays and it takes time to establish roots. To succeed today , he continued, companies require a local presence in India and depends on its domestic work force to come up with products and solutions for its specific market. At the same time he warned listeners that in the euphoria of the economic explosion in India one should not forget the crushing poverty that exists with over 400 million living on an income of less that $1 a day. Chopra’s address was preceded by a quick review of the recently released book “Doing business in 21st century India” by author Gunjan Bagla. He explained how Asia has been misunderstood by politicians and the press and referred to the derogatory remarks which are being made by politicians such as a large number of jobs are being sent abroad , particularly to India. On the other hand he explained, in a few nuggets that globalization has been good for the world and in reality has created and saved many jobs in the US. In a highly interactive Q & A session Tejpreet Chopra said in terms of corporate philanthropy , companies have started giving back by setting aside money for social projects and encouraging volunteerism. He was not in favor of the private sector joining hands with the establishment in the smaller social sector as progress would be slowed down by governmental administrative controls. He pointed out that since the credit and mortgaging concepts are fairly new in the country it has not been affected as badly as the US in the global economic slowdown . He admitted skyrocketing labor costs in the IT sector would result in low end jobs moving to Africa and the Far East and to sustain the labor force it was necessary to train it to rise up to take on challenges higher up in the value chain. Earlier Deborah Jordan , Executive Director of Asia Society Southern California welcomed the audience and spoke of the activities of her organization. The host of the morning was Navneet Chugh of The Chugh Firm who introduced the guest speaker in glowing terms. He also moderated the Q & A session after Chopra’s presentation.

Source: indiajournal.com Contributed by: DMSMedwire Research Team