Restricting the Foreign Players

In India we are protecting the domestic players since our independence. The argument behind this was that we have not achieved the level where we can compete with the foreign players. If we look at 4-5 decades back then this argument can be accepted. But can this be accepted now? Not at-all. We are restricting the foreign players but they are invading through some other way. We are not allowing to Wal-Mart to open its store in India. But it has entered through collaboration with Bharti Group. We are restricting foreign banks. We are allowing only 15 new branches to open in a year to foreign banks. But they have found new way to expand themselves. They are buying out NBFC’s and doing their business. We want foreign money but don’t want foreign players to operate here and earn from India. SEBI is struggling for a long time with the Participatory Notes. Now there are plans to relax the FII investment so that foreign investor can invest in India without any hurdle. Every time we compare Foreign investment in India with China and compare it with the last year figures. First we have to check are we in the right track. We are asking for investment but our policies are so rigid that it makes difficult for investment. Vodafone got the clearance in its fourth attempt. POSCO is still struggling in Orissa.
We have to check what benefit we will get with this rigid policy. We are able to protect our seek PSU and some private corporate. If we look at Telecom sector we are now one of the growing country and adding highest number of subscribers in the world. The government run BSNL is loosing its business to private players because of political reason. There was unnecessary delay in giving the contract where the opportunity cost is very high compared to the cut in bid price for the tenders. The private players have become global players. They are in a position that they can stand in front of the private players. In fact entry of foreign player will make the industry more competitive and the customer will definitely get good service at lower tariff.
When we look at the big corporate they are buying out bigger players than themselves. The recent acquisition of Corus by Tata Steel and Novelis acquisition by Aditya Birla Group are few among them. Across all sector the acquisition is taking place. Be it IT, FMCG, Pharma, Beverage etc. So we are at our best stage. We have understood the business and are becoming global. So why are we restricting the competition? Recently Starbucks was not given the permission to operate in India. So it has dropped its plan for 2 years.
Let us have a look at the big corporate. They are expanding themselves globally and in various businesses. If for a moment we take both RIL and ADAG as one group ( which it was earlier) than there is hardly any business left for the combined group to do. They are almost in all business. Recently RIL announced that they will enter in to the fertilizer business as well. Tata Sons has more than 100 companies under its arm. Bharti is expanding itself into other businesses as well. In fact new and new players are emerging with a mission to get into all the business.
We should cheer for the courage and growth of these corporate as they are indigenous. But when they will grow a situation will come when there will be monopoly. I am giving a hypothetical example. Customer has to buy a Reliance Mobile to get Reliance DTH and he has to buy General and Life Insurance from Reliance. I will always pray this will not happen but the way we are restricting the foreign players it can also happen. So ultimately who is getting the benefit and who is at loss. The ones whom we are protecting are already in a stage where they don’t need protection and the citizens are at loss as they are paying more for a local service where they get world-class service and goods at cheaper rate.

I hope our policy will in near future will give fare chance to the foreign players to operate in India and the citizen of India can avail world-class products.