|Mr Singh is a Board Member of The Euro-India Centre|
The following paper was presented during the session "NRI/ PIO Business
Networking for Trade & Investment and Contribution of Indian Diaspora
Dear Mr. Prasad, GOPIO Belgium President, distinguished guests and dear friends.
It is a great privilege to address such an august gathering and it is a great pleasure to talk about such a contemporary topic under the auspices of GOPIO. The best compliment that I came across for what GOPIO is doing came from an Italian journalist covering this event. She told me that she would like to replicate GOPIO networking concept for the Italian Diaspora and would seek advice from PIO’s, without ofcourse consultancy fees. So compliments to Mr. Thomas Abraham and his team. However before proceeding further, I would like to thank GOPIO organizers and particularly Mr. Sunil Prasad who kindly provided me the opportunity to share with you my own perspectives on the role of European PIO’s and how the goals of GOPIO and The Euro India Centre converge for a common good.
The Euro-India Centre is a France based young Euro-India initiative but with an old cherished idea. It is the idea of building upon the historical ties that have existed between the old continent and an older sub-continental civilization for centuries. These ties existed much before the humanity discovered the word colonization. These will exist long after we have forgotten this word. At Euro-India Centre we have started working in that direction. I will talk to you about that a bit later. First as an Indian based in Europe, please allow me to talk about India and PIO’s.
India has been designated as one of the biggest emerging markets with tremendous potential for further development, enormous opportunities for investment and interesting possibilities of attractive returns.
All very true but now let us see how PIO’s and particularly European PIO’s are participating in this endeavour.
As per the well-known statistics and as also mentioned in GOPIO’s own Concept paper, the Indian Diaspora is 21 million strong; it is geographically spread in 110 countries; it generates USD 160 billion or something to that effect.
So a mere 2% of Indian population earns almost one third of India’s total GDP.
My first emphatic reaction to above is – Impressive indeed especially when seen in the context of the highly flattering PIO success stories and how the PIO community has helped raise India’s profile.
My second but a provocative reaction is, ‘so what’.
Now let us look at the ‘so what’ in perspective in terms of the FDI flowing into the country. The size of the Indian economy is in the range of about USD 500 billion and the current FDI is about USD 5 billion i.e. 1% of Indian economy. Out of this USD 5 Billion, as per GOPIO Concept paper, Indian Diaspora invests about 10% i.e. USD 500 million. So purely arithmetically speaking, PIO contribution as FDI is 0.01 % of the Indian economy.
Let us also look at it another way; in terms of the Indian requirement of the most important infrastructure – power generation. An amount of USD 500 million can perhaps build a 500 MW power plant. Now India’s total installed commercial power generation capacity is about 130,000 MW for the population of a billion. At a per capita level, even to reach the current level of China, we have to increase the power generation three times and very many times to come anywhere near the level of the developed countries.
The International Energy Agency estimates that India will require upto USD 665 billion investments in power sector between 2001 and 2030. This averages about $ 22 billion every year. And this is only in one sector. There are other equally important sectors for investment in a big and developing country like India. So once again we need to see the figure of $ 500 million in the perspective of massive Indian requirements.
So here is the moral of the story. Just as a 500 MW is a drop in the ocean of India’s power requirements, so is the 500 million USD investment for a nearly USD 500 billion economy. On one hand, the Indian Diaspora’s is generating equal to 33% of this Indian economy, on the other its actual contribution to the Indian economy is less than 0.01%.
But as the French would say “Ce n’est encore fini”.
As per the published statistics, the big chunk of the investment in India comes from U.S. based PIO’s. So a big part of this drop in the ocean is coming from outside Europe and not from European PIO’s. Shall we say this is our first obvious conclusion?
Next, as per the Federation of Indian Chamber of Commerce and Industry, the Indian exports to the European Union in percentage terms have actually declined from about 29% to a little over 21% during the last decade. The imports have more or less remained stagnant during the same period.
It has also been observed that exports to U.S have been increasing consistently. I believe that we can ask ourselves what we in Europe are doing? Comparatively much less. Shall this be our second conclusion?
Thus so far we have reached two conclusions. One, that irrespective of the accuracy of the above figures, the global PIO community’s contribution is rather modest in the overall perspective. Second, that within this limited figure, the European PIO’s contribution has not been very significant, at best.
However it is not my intention to go into the reasons behind this situation. That is not the focus of my talk. What is clear however, is that our contribution or involvement can, has to and must increase out of Europe.
Now I will like to talk about another aspect.
The focus of our investment generally remains in IT, Biotech, manufacturing or similar sunrise industries where the returns can be quick. But should this be the lone reason for us to invest in India? Should these be the only areas for us to invest in?
I raise these questions to ourselves in the background of the specific initiatives that are interesting examples of what PIO’s can do in terms of investing in India.
There are cases like the U.S. based ex-IIT students who have committed to raise substantial amounts to improve the working of their alma-matter. Others have actually opened educational institutions or hospitals in their places of origin in India. Many have set up their back offices in India. Many have taken upon themselves the promotion of Indian products in Europe. Still others are facilitating the interaction of European companies with their Indian counterparts.
Some of the Indian Educationists have created a niche for themselves in the European academic institutions. In turn this has facilitated noticeable increase in the number of Indian students to come to Continental Europe for higher and specialized studies. Still lot of work remains to be done.
Indeed the investment can take many forms and there are many types of examples in different fields where PIO’s can invest not only to have a return but also to fill a social need. It can be education, health, infrastructure and many others.
So all in all for European PIO’s, it is time to catch up particularly with those from U.S.
The first step is symbolized by the kind of gathering we have today, a gathering that promotes networking between the PIO’s from all over but particularly among those based in Europe. GOPIO must be complimented for this initiative that has brought about so many PIO’s together here today. But we need to reach out to another big segment, that of the Euro-Indians.
Now who are the Euro-Indians? We call our members not Europeans, not Indians but simply Euro-Indians. These can be Indians or Europeans as long as they share the ideal of promoting interaction between Europe and India. At the Euro-India Centre we are very pleased to complement GOPIO’s efforts in this direction – GOPIO among Persons of Indian Origin and the Centre among Euro-Indians. Our seriousness for this endeavour can be gauged by our presence here, perhaps the largest group besides ofcourse the GOPIO itself: Ms. Neena Gill from U.K, Mr. Amal Mukhopadhyay from Germany, M/s P.K.Das, Wahid Saleh, Raghu Kolli all from Holland, Sanjeev Rao and myself from France and Michel Sabatier a French from France being present but virtually.
It is in this background that I would like to talk about the Euro India Centre, what it has undertaken to accomplish and how it is going about it. Unfortunately it will not be possible to make a power point presentation on the Centre due to some technical bug in the facilities here. So let me explain the contents of the slides.
Ladies and Gentlemen, I thank you for your patient hearing and would once again like to congratulate the GOPIO organizers for this successful function and would like to thank them for giving us this opportunity.