Make in India may be wooing businesses, but Jim Rogers gives Modi a hard lesson

Prime minister Narendra Modi’s call to Make in India is finding favour with more and more business honhcos with Toyota Motor Corporation Chairman Takeshi Uchiyamada and Swedish telecom gear maker Ericsson CEO Hans Vestberg calling on Prime Minister Narendra Modi on Wednesday.

Vestberg also announced a plan to invest $15-20 million to set up its second manufacturing facility in India in Pune.

Also a report in The Economic Times said Jeffrey Immelt, the CEO of global conglomerate General Electric, is also planning a visit to India to meet the prime minister. Immelt is also likely to announce a plan to manufacture in India, said the report.

Earlier this month, in a big boost to Modi’s Make in India campaign, Foxconn, the Taiwanese maker of iPhones, had announcing a $5 billion investment in Maharashtra.

Clearly, with the slowdown in China, companies seem to be making a beeline for India to cash in on the cheap labour cost here.

Mr. Hans Vestberg, Group CEO of @ericsson called on PM @narendramodi. pic.twitter.com/BC4B68wVFF

— PMO India (@PMOIndia) September 2, 2015

Mr. Takeshi Uchiyamada, Chairman of the Board of Directors, @ToyotaMotorCorp met PM @narendramodi. pic.twitter.com/FelmR0q2el

— PMO India (@PMOIndia) September 2, 2015

A PTI report citing a Toyota Kirloskar Motor (TKM) statement said Uchiyamada discussed the growing Indo-Japanese bilateral ties as well as the company’s plans to grow in India. In his meeting with Modi, the Toyota chairman highlighted the company’s commitment towards the ‘Make in India’ campaign. Toyota began operations in India in 1997.

Toyota’s interest to popularise hybrid in India in terms of environment and energy saving was also discussed in the meeting, the statement said.

Meanwhile, Ericsson’s Rs 132 crore Pune unit, announced prior to Vestberg’s meeting with the PM, will become operational around June-July next year. It will be used as an export hub for the company.

Ericsson will be making telecom equipment at the plant which will be exported to about 180 countries. The company already has a manufacturing plant in Jaipur but it is used mainly for domestic markets.

It will also double its employee base in India over the next few years from the current 21,000. Vestberg said from 2010 to 2015, the company has added 15,000 employees. The addition of staff will be for services segment which is growing at a rapid pace for the company.

The company yesterday also bagged a four-year 4G network rollout contract in Delhi from Bharti Airtel and signed another four-year agreement with Airtel to expand its 3G network across eight telecom circles in the country. This is Ericsson’s first 4G network using LTE-FDD technology in Delhi.

Meanwhile, GE’s plans for India also seem to be big. According to a person quoted in the ET report, Immelt is keen on take advantage of “the wave of innovations” happening in India now.

“So has everything been perfect here? No, but am I discouraged about what ultimately GE can do to be successful here? I’m not discouraged. I think the people are fantastic here. Our GE team has such talent here that it is equivalent to talent in any place in the world. Will I put more capital here? I would say yes,” Immelt had told the ET in an interview before the Lok Sabha election in May 2014.

Even as Immelt and a few others seem to be holding faith in Modi’s Make in India campaign, there are a few others who have been irked by the slow pace of reforms.

According to a report in the Mint newspaper, high profile investor Jim Rogers has exited all his holdings in Indian markets as this government has failed to live up to investors’ expectations.

In a hard-hitting interview to the newspaper, he said, “I am sure Modi is a smart guy, he enjoys good press, and he makes a lot of friends for India. But I, as an investor, after almost a year-and-a-half, have decided to move on to other places, partly also because stock markets are not going to be particularly good for the next year or two.”

Rogers, who had bought into India story after Modi assumed power, had in April said that he was becoming disillusioned with the Modi government as it has done nothing but talk.

“So far, the new government has done nothing but talk, and it is a shame because Modi had experience; he said he knew what needs to be done. He campaigned for many months saying he knows how to fix India, but he has done very little,” he told the same newspaper in an interview .

With inputs from PTI