The business of diplomacy
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The support of the MEA is central to industry's overseas ambitions and activities
A column in this paper, C. Raja Mohan's 'The Male takeaway' (IE, December 11, 2012), makes a valid point regarding the increasing globalisation of Indian business and the risks Indian companies undertake in doing business overseas. It is important to converge the synergies between diplomacy and industry for advancing India's geopolitical interests.
In fact, in recent years, such coordination between the ministry of external affairs (MEA) and Indian industry has been greatly stepped up. Indian industry has always worked closely with Indian diplomats and the support of the MEA is central to industry's overseas activities. Industry is privileged to have received the fullest assistance from the MEA whenever required, and has benefited from the guidance and insights of diplomats in the ministry as well as in Indian missions overseas.
Today, the external engagement of Indian companies has gone up considerably as policies regarding overseas investments have been relaxed. Outward FDI (OFDI) provides us with proximity to global markets, access to resources, technology and managerial expertise, and opportunities for research and development. From less than a billion dollars of OFDI in 2000-01, Indian corporations invested as much as $18.5 billion at the peak in 2008-09. The cumulative overseas footprint of Indian companies from 2000-01 to 2011-12 was well over $100 billion.
The sectors of interest for Indian companies have cut across all manufacturing and services spaces. Manufacturing sectors, such as consumer durables and non-durables, agricultural machinery, organic chemicals, pharmaceuticals, etc have attracted high attention. In the services space, business services, IT and financial services have been the major areas of interest. In terms of geographies, Indian companies have not shied away from making the entire world their platform, taking particular interest in emerging markets in Asia, Africa and Latin America. However, the US and Europe have accounted for the lion's share of OFDI. In fact, Indian corporations have emerged as significant employers in these countries, helping to create and sustain jobs.