Indian age.. take it now

Observation

The Eurozone calamity needs to be solved in quick time, for India’s sake. America is India’s biggest trading partner, but that market is already under a squeeze and is redesigning alignments, specifically observing the Eurozone crisis. In the long run, the eurozone crisis, if not contained quickly, could spell a bigger disaster for the Indian economy – especially in the export and forex trade sector – than the sub-prime issue in the US ever did.

India is  staring at a multi-billion dollar deficit funding through FII, and FDI. Money has gone to dollar-backed units and intends to stay there for the unforeseeable future. Whatever the return in India, corporate India should be aware of the international exchange regimes that are taking a big beating today.

Conversely, though, if big moneybags decide to launch into M&A’s in the Eurozone at this point, there seems scope for good deals. These will, of course be at limited corporate levels, with the overall scenario remaining gloomy. In that case, though, the cost of money will also come into account. With the impending rise in rates in India, funding will be expensive. Eurozone banks are anyway wary of forwarding loans and even credit rating agencies will now be under strict commission watch.

Domestic demand could land in diminishing a utility basket, and one day saturation would be stifling. The windows of export bring in fresh technology and views, they are the wings of serious and fast growth. If India are a services based economy on the whole (agriculture apart), there is sense in tailoring economic policies to wards that.

Services, of course, are a bigger name for intrinsic technology that drives it. 3G for telecommunications, for example. There is the royalty factor in such tech imports that make already slim margins (because of low tariffs) loon slimmer still.

Way to go, of course, is a nice mix of both.

Government policy towards R&D is limited and undefined. There should be major incentives towards this so that bigger corporate entities can really get set the ball rolling in inventing, instead of re-stamping existing product profiles.

This is to develop the original demand base into a better appreciator of technology. The eurozone is a solid base for hot and changing technology in the world. This, probably is the time for tech tie-ups, for collaborations that would bring to this part of the world services and technology associated with them that could yet again change the face of Indian commerce.

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I was reading about the relevance of G20 somewhere, and someone said it has become no more than a talking shop, with no real issues being settled. The basic decision making body is still G7, and one even suggested a smaller group of representatives from the US, the eurozone and China, to handle exchange and currency issues worldwide.

In this I see a lack of Indian initiative. For two decades this part of the world and this domestic demand has been rising, taking in its stride all the recessions and such around in the ‘developed’ world. India has failed to get the best benefit out of such a loyal domestic demand. It has failed to tell the world – especially during these severely depressed times – that there is a price in being able to access this happy market.

Somewhere the arrogance of China has won, in the face of meek Indian protestations.

Lets think aloud.