Business circles everywhere, including in the US, believe Prime Minister Modi is a man of history who faces a daunting agenda but has the chops to succeed. But what an agenda! It is reminiscent of 1964, the year the Business Council for International Understanding (BCIU), wanting to participate in India's success and promise, led a delegation of 30 corporations to spend a week in Delhi as guests of Prime Minister Nehru. The purpose was to create an efficient mechanism to facilitate US investment to India.
The executives concluded that massive amounts of political will would be required to address structural reforms but if even a fraction of them were accomplished, India would become among the largest -- maybe the largest -- economies in the world by 2000. Their advice to Government was simple -- do one big thing well. Attract investment in food and fertilizer, fast-track the process, consult with business and donors to get policies right and make the tough reforms. American companies would seize the opportunity, form joint ventures with Indian business people -- among the savviest in the world -- and participate in the ensuing decades of growth and progress.
Fast forward to today, and most business executives tell you that the Prime Minister's reputation for competent, businesslike management as CEO as well as his personal probity gives them confidence that he understands their requirements and value their stakeholder role. His energy and his experience in taking bold decisions and getting things done is terribly attractive and refreshing to investors, particularly after the disappointments in recent years.
The CEO of the largest PR firm in the world, Richard Edelman, captures these sentiments "...our clients are very optimistic about the prospects for India under Prime Minister Modi. They see a dynamic leader with experience in running a state who is committed to manufacturing and to free trade...".
Global business know the Gujarat success story and understood the 'irrational exuberance' coinciding with the Prime Minister's election. The irrational is assuming rational tones as he follows through with big steps like fulfilling his promise to dismantle the Planning Commission. Americans see two of its icons in his approach -- baseball legend Babe Ruth who used drama during a crucial game by famously pointing to where in the grandstands he would hit the ball and then did, and Ronald Reagan who summarily fired 11,000 air traffic control workers who illegally walked off the job. He had the authority, he used it.
The lesson, of course, is that more than anything, leadership matters. Tell your constituents what you'll do and why, and then do it. This is the brand of leadership the 1964 BCIU delegation had hoped for. And much of the world is on board with the Prime Minister's leadership agenda.
America sees it in the Prime Minister's dramatic regional commercial diplomacy. Take Australia, where no Indian PM had visited in 28 years. He vowed to complete a free trade agreement within a year - a process in the U.S. which can seem endless -- and triple bi-lateral trade by 2020. Modi is looked at as someone who believes in India. Sure, getting the agreement won't be easy -- he operates in a democracy -- but why not be bold?
For these and other reasons, American business is bullish, but now await the budget outcome, progress on the major reforms, changes in the cabinet and, importantly, how other foreign investors begin to fare under Modi. Will it be better, and when? Companies continue to see India as a 10-20 year project, requiring extremely careful partner selection and acquired sense of the business climate. There are lingering issues such as legal barriers to entry and weak dispute resolution mechanisms that once solved will help everyone. And the last few years have been painful.
As the delegation in 1964 reported back to the White House, India can be a natural partner to do great things together. So more than limiting their focus on perennial issues, let's hope the leaders use their time to be inventive. Can't more US and Indian firms work together in third countries? Can India teach the US how to finally adopt a cutting edge PPP framework? Will the two countries work together towards a clean growth model? Let's hope so; in the meanwhile, we wish the Prime Minister the very best. America really needs him perhaps as much as India may need America.