From Wealth Creators to Partners : Re- inventing the Role of MNCs in India’s sustained economic growth

The Confederation of Indian Industry (CII) is organizing the National Conference on MNCs in India under the theme of Partners in Sustained Economic Growth on 9 November 2009 at Hotel Hyatt Regency, New Delhi. The inaugural address will be delivered by Shri Jyotiraditya Scindia, Minister of State for Commerce and Industry, Government of India.

A resilient macro economy, expanding consumer markets and sustained availability of a large pool of skilled cost-effective human-power are a few amongst several specific drivers which have been instrumental in attracting MNCs to invest in India. Besides, there are also a host of business imperatives that are specific to each MNC which are driving it to be in India. This conference will identify India-specific as well as business-specific drivers, creating a compelling case for MNCs to invest in India from a long term perspective.

India’s ranking as a globally competitive destination has been improving through the last five years and FDI inflows have consistently accounted for less than 2% of India’s GDP during the last decade. India’s inability to fully utilize the MNC potential raises a plethora of questions. The panels will try to explore some of the most prominent issues facing MNCs seeking to develop or expand their presence in India. The panels will identify key MNC-specific areas requiring support from the government at the centre and at the state level. It will also suggest ways in which MNCs can continue to complement the growth agenda of the government to make the investment and growth climate more conducive for sustained investments from MNCs, stated Ravi Venkatesan, Chairman, CII MNC Committee and Chairman, Microsoft Corporation Ltd.

One of the major highlights of this conference will be the keynote speech by the globally-renowned management guru C. K. Prahalad, Paul and Ruth McCracken Distinguished University Professor of Strategy, Ross School of Business, University of Michigan and Arun Maira, Member, Planning Commission will speak on “Why India needs MNCs and why MNCs need India”.

Another highlight of the event will be the release of the Accenture Study titled Multinationals and India –A Plan for Progress by Jyotiraditya Scindia in the presence of Diego Visconti, International Chairman, Accenture.

The latter half of the day will also witness some more interactive sessions: There will be a session on the “Operating Environment for MNCs”. While India is an important market and resource base for MNCs and a logical investment destination, what key challenges do MNCs face in India and how do they go about mitigating these? This session will identify factors that make the operating environment appear daunting to investors and discuss approaches for addressing these.

Rapid globalisation and emergence of the Indian multinational have transformed the world into a global market place. However, tax authorities around the world are increasingly defending their national tax bases forcefully. An enhanced focus on tax issues, strengthening local legislation, higher compliance requirements and penalties for non compliance are the new order.

The Panel Moderator will be T N Ninan, Chairman & MD, Business Standard and the Discussion Leaders will be Sunand Sharma, Chairman and Country President, Alstom –India, Russell Parera, CEO, KPMG – India, Ajay Shankar, Secretary, DIPP, Government of India, Siddharth Lal, Managing Director, Volvo Eicher Commercial Vehicles, Shardul Shroff, Managing Partner, Amarchand Mangaldas, Ajay Dua, Chairman, AREVA T & D.

Another session will be on “Prospering in India – What lessons can we learn from MNCs that have cracked the code to the Indian Market?”. The session will highlight what we can learn from companies that have bet big on India and whose India revenues are a significant contribution to worldwide revenues, how they have evolved locally relevant business models? And how are they changing the rules of the game?

The Panel Moderator will be Paul Beckett, South Asia Bureau Chief, The Wall Street Journal and discussion leaders will be Ashish Bajaj, Managing Director GTS- South Asia, Citibank, Ravi Swaminathan, President, PSG Hewlett Packard–India, Anil Menon, President, SCC, CISCO, Mayank Parekh, SVP of Marketing & Sales, Maruti Suzuki Ltd, Sanjay Jain, Managing Director, Accenture, Ravi Venkatesan, Chairman, Microsoft Corporation India.

There is a sizeable and growing market opportunity in India with a large and diverse consumer market. Private consumption accounts for close to two-thirds of the country’s GDP. There is a mass market and rural opportunity, a large middle class with rising income and propensity to spend, an emergence of a wealthy class and youth and favorable demographics for long term growth, stated Ravi Venkatesan, Chairman , CII National Committee on MNC and Chairman Microsoft.

The Market which is still largely underserved in a number of categories, for example in health care, insurance, etc. has a large scope for a large increase in penetration, potentially very high returns and large Government investments in strategic sectors of the economy, like defence and security, healthcare and education, E-Governance, agriculture and food processing .

There is also a continued investment opportunity in the infrastructure sector, like Power, Urban/ Mass transportation and opportunity in ancillary sectors. There is also an opportunity to enhance competitiveness with India as a sourcing hub with large well educated work force at competitive costs (Offshoring models for IT/ services).

Cost pressures in the Indian market force companies to become more efficient to meet aggressive price points. Benefits from these help companies in other emerging or even developed markets. Indian companies across sectors have acquired the capability to work at efficient cost structures and low price points. MNCs can leverage these benefits through partnership (for example Auto/ Pharma sectors).This is particularly critical in a environment where natural resources are scarce, (for example increasing importance of small cars globally, where Indian industry has strengths).

India as an innovation hub is another success story of moving up the value chain, an opportunity to leverage Indian talent in R&D and innovation, Software and Pharma.
India as a base for leadership and managerial talent is another area which steers MNCs to India with a number of Indian managers who are today global leaders.

In terms of overall investments made by companies they are yielding returns. While gestation periods may be large, investments pay very high returns, namely Suzuki investment in Maruti whose India operations are one of the most successful globally for Suzuki.

Every MNC has a portfolio of products spanning across different segments and it is important that the MNCs get their product-market strategy right, thus emphasising the importance of identifying and choosing the right partners across the value chain from sourcing and manufacturing to marketing and distribution. For any more information ,please contact daniel.romans {at} cii(.)in or Geeta.arora {at} cii(.)in Tel no 011-24653006/24629994-Ext 379

Date : 6th Nov
Place : New Delhi

For further information, please contact:
Vikram Mahajan / Shine Kapoor
9810225845 / 9910941442
Vaishnavi Corporate Communications