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March 24, 2000

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The Rediff Business Interview/A J Patel

'Business houses in and outside US will look more seriously at India'

A J Patel, chairman, Odyssey Enterprises Inc, and a member of Clinton's entourage to India, is optimistic about the US and other nations taking renewed interest in India as an investment destination. He says that certain bureaucratic hassles need to be ironed out for free flow of funds.

Patel is better known as the 'spirit of Indian entrepreneurship' in the United States for his meteoric rise and contribution to the American economy.

Email this report to a friend Patel was among those Indians who was deported by the Idi Amin regime in Uganda. Patel landed in the US in search of a 'decent life'. Thus, in 1981, Patel joined US company Paper Material Corporation which manufactured packaging materials for the infotech companies in the US.

Patel's explicit intent when joining the company was to buy it out in ten years. So he did, but within seven years of joining. Today, Patel is the chairman of five companies which manufacture packaging material for infotech firms and is based in the Silicon Valley.

He is also on the board of directors of five Internet start-ups and is one of the founding members of The Indus Entrepreneurs or TiE, an influential pro-India lobby in the US.

Patel is now in India as part of President Bill Clinton's entourage. In an interview with Neena Haridas, Patel spoke on the direction Indo-US trade relations are likely to take in the wake of Clinton's visit.

How much of the 'Clinton Effect' do you see happening on the trade front?

Bill Clinton is here in India because he saw that 60 per cent of the H1B visas that the US government issued every year were for Indians -- especially in the Silicon Valley. He knows that Indians are the brains in the Silicon Valley.

You see, he has realised the value we add to the American economy. And the President's acknowledgement of this fact will make all business houses in the US and outside US look more seriously at India. I think the Clinton visit is going to have far-reaching impact on trade relations.

But Clinton's visit is only one step. We will see a lot more interaction between the people of the two nations now. I say people, because it is not going to be just two governments talking to each other.

When an NRI plans of investing in India, what are the problems that you face and have you been able to suggest a solution to this during this visit?

Yes, we have to go through a lot of hassles when we come to India with intentions of investment.

Red-tapism is the first in the line. There are umpteen licences that one has to take for setting up any kind of business here, and for that there are double the number of bureaucrats. Now compare this with, say, Hong Kong -- one can get a licence in 20 minutes! The other problem is, of course, infrastructure. There is total chaos as far as power, telecom and transportation et al are concerned.

We believe the problem lies in government interference. We, the Indian American community and the US business delegation, have told the government that the wisest thing to do will be to keep out of the way of business. The more restriction and rules you lay down the more difficult it will be to attract investment.

Being part of the American business community and having interacted with Bill Clinton and his team, do you think India has been sincere in its reform process?

We believe that India has been sincere to the spirit of reforms. But it has been far too slow. It started ten years ago, and there are sectors that need further liberlisation. The American community, too, believes that India needs to move faster on the reform path.

The big complaint in the American community is that of government interference. We have only one message -- government should keep out of business. What India now needs is economic freedom.

Thankfully, the movement has begun -- I just hope it doesn't take another 200 years for it to happen like it took for political freedom.

Everybody talks about Indians' expertise in infotech and how it will be the driver of economic growth. Do you think infotech alone will be enough to sustain this big a country?

First of all, let us accept the fact that we are not manufacturers. We are not capable of making anything brilliant in the consumer durables industry or construction and selling it to the developed world.

The East Asians have made an art of this. But Indians are good in information management. In the current world economy, this is what will bring in growth. Since we have an edge over others in this new economy, we should make the best out of it.

The old economy is over -- it is the Internet, the cyberspace that is the future. Other knowledge-based industries like pharma and biotech will also see India leading the world.

Do you intend to invest in India?

Not really. For one, I am part of the old economy, which is on its way out, and I have no wish to make more money. But I will help the young entrepreneurs with ideas to make it big in the United States through The Indus Entrepreneurs, an association aimed at promoting people from the Indian subcontinent in the United States.

How much does the American economy depend on Indians?

There are about 2 million Indians in the US and are growing in number. Among all ethnic communities, Indians are most influential at the government level. They also have the highest per capita income -- even in comparison to their US counterparts.

The wealth generated by Indians account for 0.5 per cent of the total American GDP. Now that is big. Obviously, US realises this. And which is why Clinton is in India now.

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