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Selling India Inc. at Davos

January 30, 2006

The country's top ministers and policymakers made many lucrative contacts among the foreign power brokers on hand at the global economic conference

At Davos on Thursday night, the high and mighty had a choice of events: a speech by U.N. Secretary General Kofi Annan or the popular annual jazz dinner. Not bad. But about 700 participants at this year's World Economic Forum gabfest opted for another venue at the Central Sporthotel in Davos Platz. The event? India's Republic Day celebration cocktail.

There they were, the important and influential from former U.S. Presidential candidate John Kerry to PC master Michael Dell to the chief executives of Citicorp (C ) and UBS (UBS ). Panitchpakdi Supachai, the former World Trade Organization chief, was amazed. "Just five years ago, the India reception attracted 50, maybe 60 people. But look at it now! India is doing so well now, it doesn't need our help any more."

DISCO TO BREAKFAST. Indeed, India has been helping itself quite effectively at Davos this year. Sessions on the country were filled to overflowing, from the "Emergence of India" and "New Energy for India's Reforms" to the session on India's and China's oil and gas needs and the discussion on Indo-U.S. relations. So were the social events, like the Republic Day celebration and the disco night at the Copacabana club on Jan. 27, where 300 lingered until 4 a.m. to hear Indian DJ Aqueel play Hindi pop.

The last day of the conference began with a packed breakfast at the Hotel Belvedere where India's top ministers and bureaucrats talked about the importance of foreign direct investment and ended with a rocking Bollywood gala soiree.

That's only the official Davos program. More important was what happened on the sidelines. In a shrewd move to build bilateral ties with countries that matter to India, like Japan, the U.S., and Brazil, India's ministers went to work as salesmen, meeting top businessmen and officials and extracting promises of investment, particularly in infrastructure -- the first time Indians have focused on what investors regard as the biggest hurdle to foreigners coming to India.

"STORY OF THE PAST." Commerce Minister Kamal Nath met with his American trade counterparts like Deputy Secretary of State Robert Zoellick and U.S. Trade Represntative Rob Portman. Nath's meeting with Michael Dell resulted in a coup: In the next two months, Dell will begin building a large PC manufacturing facility in India -- the country's first by a multinational. Nath's job, he says, is to explain to the world about the "10 paradigm shifts taking place simultaneously in India. Outsourcing is a story of the past. We now want people to see India as a manufacturing base, as the youngest nation with fortunate future demographics."

Finance Minister P. Chidambaram scored a key success by luring Japanese business to India -- a commercial alliance of great importance to Tokyo, because of Japan's growing fears and suspicion of China. On Jan. 26, Chidambaram hosted eight Japanese businessmen, including the chairmen of Toshiba, Nomura Securities, and Sumitomo. Also present was the chief of Japan's external trade organization and a young member of the Japanese parliament.

The result? A promise by Japanese companies to look anew at India's power sector and a commitment to conduct a study on investing in the new dedicated rail-freight corridor connecting Bombay, Delhi, and Calcutta. "We will build our infrastructure with Japanese help," said Chidambaram.

VISIBILITY AND ALLURE. Other officials were hard at work, too. Montek Singh Ahluwalia, the senior-most policymaker in India's government, wined and dined informally with policymakers and bankers, like the head of JP Morgan Chase (JPM ), while Ministers Oomen Chandy of Kerala and Vasudra Raje of Rajasthan met with investors from the technology, tourism, and education sectors.

Indian businessmen, of course, have been using Davos to network with their peers and customers for years. This year, however, India's visibility has given them more allure. Chief executives like Yogi Deveshwar of agro conglomerate ITC, Nandan Nilekani of Infosys (INFY ), and Ajay Piramal of pharma major Nicholas Piramal slept less than four hours a night, packing in over a dozen side meetings along with their obligatory session appearances at the conference. If the payoff comes in a burst of foreign investment, it will be well worth the sleep deprivation.


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