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Interview with Indian Ambassador Vikram Doraiswami by Fortune Korea

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1. Ambassador, it's been almost 1 year since you were appointed asIndian ambassador to Korea last April. What is your impression of Korea?

Despite being familiar with Korea and its culture for over 20 years, Korea has exceeded my expectations in almost every respect. The excellent physical infrastructure, the dynamism of the people, the pursuit of excellence, the quality of attention to detail in everything that Koreans do—these are all highlights of Korea for me.  On the other hand, I also find to my surprise, that Koreans are still sometimes a little under-confident about their remarkable country, their unique culture or about their place in the world. And personally speaking, I can see absolutely no reason for people to feel this way, given the impressive successes of the Korean people in such a short period of time.

2. Please tell me your priority you have dedicated over the last year as the ambassador.

Well, it has been a really busy year for us. Our Prime Minister has repeatedly underlined the priority he personally attaches to our partnership with Korea. And so he paid his first State Visit to Korea within one year of taking office, in May 2015. Based on the decision taken by our Prime Minister and H.E Madame President to upgrade our partnership to a Special Strategic Partnership, and the directions of our leaders, my colleagues and I have focused on three core areas of our work: enhancing the trade and economic relationship; increasing the strategic content of our ties; and building upon the goodwill and warmth our people share for each other. My effort is to ensure more India in Korea, and more Korea in India, for which we even have our own slogan, which is “HamkkeHamyeon, SeonggongHabnida”.

3. Korea and India upgraded the bilateral relations to a special strategic partnership through last year's summit talk. How does the Indian government evaluate the importance of Korea in diplomacy and economic cooperation?

I can do no better than to quote our Prime Minister’s perspective in this regard: he has repeatedly and publicly said that as early as 15 years ago, when he was Chief Minister of Gujarat state, he had taken the Korean economic development story as an example for India to emulate. Even today, our Prime Minister has underlined the importance of the India-Korea economic partnership for mutual benefit.

Overall, therefore, our Government sees significant potential in a partnership of equals between India and Korea, based on the complementarity of our respective strengths, and the specificity of our interests as fellow democracies who have a vested interest in contributing to a stable and fair regional and international order, based on the rule of law. We are happy to be expanding our partnership with Korea including through high-level dialogues, as well as through exchanging strategic perspectives, military-to-military cooperation, and enhancing partnerships in defence manufacturing. Indeed, we are looking forward to strong Korean participation in our Defence Expo (DEFEXPO) in the sunny State of Goa in late March, and the visit of HE the Minister of Korea’s Defense Acquisition and Program Administration.

In that context, we believe that our economic partnership should lead us to find strategic areas for us to work together including shipbuilding, automotives, renewable energy, infrastructure development in particular, creating smart cities and modern infrastructure, and in electronics hardware manufacture. Indian strengths in design, information technology and pure sciences, frugal innovation, and India’s vast market, low cost and skilled labour are all useful elements that can be combined with Korean skills in high quality manufacturing, application of technology and commercialization of technologies into market-friendly products to create win-win solutions for both sides.

The best sign that I can find of our interest in creating greater substance in our partnership is the agreement between our two countries that Korea will be the only Partner Country in India’s First Maritime India Summit, being held in Mumbai in the middle of April 2016. This event will feature opportunities in everything from shipbuilding to port development, fisheries to maritime universities, leisure and recreation to marina development. And it will offer Korean partners in all spheres an opportunity not only to showcase Korean excellence in this sector, but also the opportunities to become lead partners in one full segment of the Indian economy. I hope our Korean friends will take up this opportunity in a big way.

4. What kind of efforts should both countries make to improve the bilateral relations?

Bilateral relations between India and Korea have always been excellent in terms of the way in which we see each other. What we have lacked in the past has been the nature and quality of substantive content in our partnership. Fortunately, in the past few years, Governments on both sides have been strongly focused on the need to deepen and widen our partnership through the addition of substantive content.

To do so, we need to change our perspective of what can be done. In our Embassy, for instance, we are happy to go beyond information provision to business facilitation, within the limits of our capacity. In that sense, we are ready not only to canvass Korean businesses regarding opportunities for trade, investment and joint venture partnerships in India, but also to canvass in India to try and find suitable partners for our Korean friends.

Similarly in the sphere of people to people ties and culture, we are not only happy to clear as many impediments to better contact—for instance, both Governments agreed last October to triple flight services between us, concluding some 12 years of stalemated negotiations—so that our cultural similarities can be rediscovered, and the vibrancy of our traditions can be celebrated afresh.

In other words, I strongly believe that the sky is the limit in terms of bringing our two countries closer together, and my colleagues and I are focused on doing the best we can to make this happen. We hope that in this endeavor, our Korean friends will work with us shoulder to shoulder.

5. Recently, India's economic growth has drawn a lot of attention as the Chinese economy has slowed down. Among emerging nations, India has presented the most impressive growth rate. What are the key elements behind it?

Well, I would prefer to look at the Indian economy on its own, and not on a comparative basis. But of late, the pace of India’s economic growth has indeed been more in line with the vast potential that the country has. Building off a platform of the world’s largest youth population and a vast market, the key factors that have facilitated faster growth in recent years include a stable Government with a clear mandate, the determination of our Government not only to remove existing structural obstacles to rapid economic growth, but also to enhance the ease of doing business, because the Government recognizes the important role and contribution of foreign and Indian private sector businesses in creating jobs, developing new products and delivering growth.  In this context, the disentangling of regulatory obstacles to rapid infrastructure upgradation has also been an important element in underpinning faster growth rates.

Our States have also assisted strongly in this process, not only in competing to offer better conditions for Indian and foreign businesses to work from their territories, but also through the creation of sector-specific and country-specific industrial clusters, the establishment of smart cities and new business infrastructure.

Another factor in this regard has been the expansion of financial inclusion through one of the world’s largest banking expansion programmes. Through this, some 200,000 new accounts have been created each day at its peak period, creating a vast class of people with more money to spend on goods and services.

Finally, the slowdown in the price of commodities has also meant a mitigation of the significant bill we pay for importing most of our energy supplies. A favourable fiscal situation has also meant beneficial fiscal policies being practiced by our Reserve Bank as well.

6. Many observers analyze that India's economic growth has been accelerated by 'Modinomics', Prime Minister NarendraModi's economic reform. Please tell me your opinion on how Modinomics has changed the Indian economy.

To my mind, the most important aspect of the Prime Minister’s vision is his sense that the focus of the State should be on creating opportunities for employment-centric growth through facilitation of productive business, based on a transparent system of fair competition. On the other hand, his focus is equally on using the State’s resources and capacities to provide millions of our most underprivileged citizens not just the basics of sustenance, but also the means for them to have a fair chance to improve their own lives. In that sense, he sees the role of the State differently from many leaders, just as he sees the market as being more than just a platform for economic activity.

7. Do you think that India will keep the pace of rapid economic growth? If yes, what kind of efforts will the Indian government make to maintain the rapid growth?

If you look at the last twenty five years or so of India’s recent history, even in difficult local or global circumstances, the general trendline of India’s economy has been favourable. On top of this basic momentum that is latent in our economy, the determination of our current Government is a strong factor behind my personal conviction in the prospects of strong growth in India. Naturally, one cannot discount the pressure that may be created by externalities and unforeseen pressures, but I would continue to be optimistic about the trendline for the Indian economy in the next few years at least.

Our Government remains committed not only to maintaining the current growth rate, but also to realizing the ambition of boosting growth higher to the double-digit range. Towards this end, we are working to simplify tax procedures, to incentivize manufacture in India, and to upgrade roads, railways, ports and airports, and India’s many cities, all of this being, to the extent possible through employment-centric schemes. This is why our Government has rolled out nationwide campaigns to facilitate these transformations including the Make in India campaign (manufacture), Digital India campaign (IT and electronics), Start Up India (new entrepreneurship), and even the Clean India campaign, aimed at transforming public hygiene and facilities across India’s vast landmass.

8. After the inauguration of Prime Minister NarendraModi, foreign companies' interest and investment in India have grown further. How is the Indian government trying to improve the investment environment for foreign firms?

The focus is on making it easier and more cost effective for foreign partners to do business in India. On the one hand, the Government recognizes that regulations and tax provisions in India in the past have not always made it easy to do business in India. Therefore, our Finance Minister and his team have been working over the past nearly 20 months to simplify and facilitate a fair and transparent tax regime. This remains a work in progress, but many new steps have been taken to make such processes simple and transparent. Efforts are also on in many States to simplify labour laws and to make acquisition of land and other key capital inputs easier and transparent.

At the same time, to encourage businesses to take the plunge and enter the Indian market, the Central Government and State Governments are building attractive sector specific incentive packages for manufacturing and investment. These include measures such as cashback schemes for exporters, tax rebates, cash incentives for manufacturing, preferential purchasing policies for those making vital components in specific sectors and so on. In fact there are specific packages for specific sectors of business, and additional packages that are being offered by various State Governments to make investment in their States even more profitable.

To make all of this intelligible to the individual businessperson, dedicated facilitation units have been set up at the Central Government level (InvestIndia: a facilitation unit set up in joint partnership between one of our major Chambers of Commerce and the Government) and also in individual States. The intention is to make it easy to find openings, partners and to offer single window clearances for foreign business partners. Indeed, for Korean businesses, Prime Minister has specifically offered the establishment of “Korea Plus”: a unit that will be staffed by Indian government and private sector individuals and Korean officials, based in Delhi, and only serving Korean businesses. We are currently waiting for the final appointment of a Korean Government official for Korea Plus to start working.

These incentives are working, as can be seen by the decision of companies such as GM, Ford, FoxConnetc to start manufacture in India, as also other major investment announcements in the last one year.

9. What kind of area does the Indian government attract the foreign investment into? Whereas, which field do the foreign companies have interest in?

We are open to investment in all sectors—Korean partners are welcomed in all areas of business including Electronics hardware, infrastructure and construction, automobiles and auto components, defence hardware, shipbuilding and ports, railways, chemicals, garments and textiles, renewable energy, power systems, generation equipment, pharmaceuticals, food processing etc.  For Korean businesses, there is practically nothing that I can think of that would not be open.

Foreign businesses have shown particular interest in areas such as electronics, automobiles, aviation, renewable energy and infrastructure (including smart cities).

10. Some Korean companies Such as Samsung, Hyundai Motors and Posco have already made an entry into the Indian market while a growing number of Korean companies have interest in the Indian market. Please give your advice to be successful in the Indian market.

As you probably know, Samsung, Hyundai Motors, and LG are household names in India as they are market leaders in almost every segment of the consumer goods market. They have brought Korea itself an excellent reputation for quality, price competitiveness and value for money, but also for being best in class in terms of technology available at each price point. This has been the case since these companies came to India in the mid 1990s—before they went elsewhere in Asia even, incidentally. What Korean readers will be fascinated to know is that these companies became successful only because they recognized the uniqueness of the Indian market and adapted remarkably well to it. Even POSCO has been very successful with the opening of a cold rolled steel mill in western India last winter.

While I am not an expert on business strategy, I would say that the lessons that can be learnt include: recognition of the value of indigenization of value-point, technology friendly products for the local market; understand that in India, it cannot be one-size-fits-all: diversity of language, tradition and environment require to be used as a strength. Additionally, like in Korea, there is great value in forging local partnerships, especially as this facilitates an early introduction into the operating practices of Indian businesses as well. In India, patience is a virtue, as is the value of finding win-win openings for business.

*Thank you for your answers.