From Davos, India attracts the attention of global investors

Leaving aside the bloviating at the World Economic Forum in Davos, the event often reflects at least what is happening in the world of politics and markets.

This year’s edition was particularly interesting given Russia’s invasion of Ukraine, rising interest rates and, of course, the ongoing COVID-19 pandemic. This year’s buzzword seemed to be “de-globalization”, a slight surprise given that this trend has been going on since at least 2016, when Donald Trump was elected President of the United States and the United Kingdom voted for it. Brexit.

I would say it’s less de-globalization than realignment. Technology, culture, sports, transportation and more make globalization irrevocable. But alliances and priorities are shifting, accelerated by Russia’s ill-fated foray into Ukraine and China’s policies on (non-)protection of intellectual property, cybersecurity and its handling of the pandemic.

All of this means that Russia – and to some extent China – is no longer the crowd favorite on the world stage. Unsurprisingly, the two countries had zero and very limited presence in Davos respectively this year, with Russians banned due to sanctions while Chinese were hampered due to onerous quarantine protocols.

Enter India.

‘India Davos 2022’ magazines are seen at the India Lounge during the 2022 World Economic Forum (WEF) in the alpine resort of Davos, Switzerland May 25, 2022. REUTERS/Arnd Wiegmann

India has had a strong presence in Davos for decades, with CEOs and senior officials making the pilgrimage to this small Swiss mountain town. And although Prime Minister Narendra Modi did not attend, half a dozen senior officials did as well as “at least 100 Indian CEOs”. according to commercial standard.

During the World Economic Forum, most of the stores in Davos are converted into mini promotion centers by giant companies like Google, Meta and Cisco, or countries like Indonesia, Poland and Namibia, among others. India, however, made the biggest splash this year.

Indian companies like Wipro, Infosys, HCL and others were present on the Davos Promenade, as well as Indian states. I counted six on The 28 States of India – Telangana, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Madhya Pradesh, plus central government – ​​taking over local stores.

Temporary offices from several parts of India are seen on Promenade Street during the World Economic Forum (WEF) in Davos, Switzerland May 22, 2022. Picture taken May 22, 2022. REUTERS/Arnd Wiegmann

Temporary offices from several parts of India are seen on Promenade Street during the World Economic Forum (WEF) in Davos, Switzerland May 22, 2022. Picture taken May 22, 2022. REUTERS/Arnd Wiegmann

(Sidenote: The most talked about showcase was “The War Crimes House of Russia,— which showed scenes of wartime atrocities — in what had been Russia House in earlier years.)

But back to India. Given the paucity of Russian and Chinese entrants – and with around 10% fewer Americans as well – perhaps that attendance was simply a matter of India maintaining a strong performance while others recalled. . Some insiders, however, thought there was more to it.

“I think it’s a bit more than that,” a prominent Indian business leader told me in the convention center.

“India correctly senses, I believe, that there is an opportunity to strengthen its presence, not just as a domestic market story, but as an integral part of the global supply chain. They see the world worried about China and they say we can fill the void. China has eclipsed India, but perhaps not as much in the future.

Indian media intensely covers Davos action – Business Standard publishes a calendar Indian events, for example – and sometimes a bit chauvinistic. “This year may well be the ‘India Everywhere’ moment again”, read the Economic Times. “Not only is India part of the global conversation, especially given its readiness to engage with pressing challenges facing the world, but India’s participation could be the third largest in the annual meeting of the World Economic Forum in Davos.”

And that hindu time“The Indian contingent at this Swiss ski resort is brimming with confidence when it comes to sharing their story of fighting the COVID-19 pandemic and attracting more investment…”

Dr Nirvika Singh, co-director of the Center for Analytical Finance at UCSC, offered this view: “It is part of an overall strategy to project the achievements of the Indian government and a strategy to attract foreign investment,” he says. .

“It’s the proverbial full-court press.”

Of course India faces significant economic headwinds like any other country. After Walmart and Target recently sneezed, the Indian tech giants Wipro and Infosys have caught a cold.

Then there are the difficult relations between India and Russia. Embarrassing because India failed to condemn Russia’s invasion of Ukraine or impose sanctions, angering the US and Europe. Indians will tell you that it is easy for Western powers to complain, but that Russia and India have long-standing ties.

Russian President Vladimir Putin shakes hands with Indian Prime Minister Narendra Modi before their meeting at Hyderabad House in New Delhi, India, December 6, 2021. REUTERS/Adnan Abidi

Russian President Vladimir Putin shakes hands with Indian Prime Minister Narendra Modi before their meeting at Hyderabad House in New Delhi, India, December 6, 2021. REUTERS/Adnan Abidi

India has moved closer to Russia for several reasons. On the one hand, as a counterweight to China which shares a sometimes difficult border with India, and on the other hand because of the support of the American army to its great rival, Pakistan.

It is therefore not surprising that Russia has been the main supplier of military equipment to the Indian armed forces, which, given Russia’s track record in Ukraine, does not seem so smart. But India was seeking to wean itself off the Russian war machine (as it is), even before the invasion of Ukraine. The Wall Street Journal reports that “India’s reliance on Russian arms has declined from 69% of Indian arms purchases in 2012-2016 to 46% in 2017-21”.

Some also cite Indian purchases of Russian oil as another contributing factor, but this may be a red herring as the Journal also reports that although India has doubled its imports of Russian oil this year, it “still does not rank among the top 10 importers of Russian energy”.

“The Russian invasion of Ukraine put India in a position where it had to choose between condemning Russia and protecting the partnership with the United States,” said Dr. Ashley J. Tellissenior fellow at the Carnegie Endowment for International Peace.

“In private [Indians] expressing great dismay at the invasion, while continuing to build a relationship with us, and encouraging us to understand their constraints as to why they cannot openly cross swords with the Russians. India has struggled to manage these two relationships simultaneously, but so far it seems to have succeeded.

It’s complicated, but not enough to deter the dozens of Indians who work in the rooms in Davos.

“The Indians sell hard”, notes the Indian entrepreneur.

The Chinese, sitting at home in Beijing, should take note.

This article was featured in a Saturday edition of the Morning Brief on May 28, 2022. Get the Morning Brief delivered straight to your inbox Monday through Friday by 6:30 a.m. ET. Subscribe

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