Corporate India Favours George Bush
Economic Times
October 30, 2004

New Delhi: Who is India Inc cheering for? Bush, the known face, has the advantage of being the incumbent. And, outside of the US and English speaking world, if there's any country that knows Kerry as well as his countrymen, it's probably India.

To India, he is the face of the anti-outsourcing noise in the US.

So, no points for guessing who did the local corporate heads prefer when ET asked them to cast their votes. A cross-section of honchos came up with a resounding thumbs up for the Republicans.

Outcome of the outsourcing debate is on the top of everyone's mind here which gives a huge head-start to Bush. Kerry is a historically, India-friendly Democrat but that it seems has provided little comfort.

"Bush's stand on outsourcing is well known. It provides for a win-win situation for both corporate India and corporate America. Studies have shown that the benefits of outsourcing accrue to both developed and developing nations. As a matter of fact, the developed nation accumulates nearly two-thirds of the economic benefits, while developing nations accrue about one-third. While Kerry initially opposed outsourcing (a stand he seems to have taken once again), we are sure that should he become president he will have a broader understanding of the situation." Ficci secretary general Amit Mitra told ET.

The real reason for India Inc's Dubya vote lies in Kerry's domestic focus as opposed to Bush's more global agenda. Says P D Narang, group director, Dabur India: "Bush has as a more global focus. He has managed, for instance, to bring Pak president Pervez Musharraf on track and if he comes back Indo-Pak relations will improve. Bush is also more rational on outsourcing while Kerry's focus is too insular including sanctions on countries that don't sign the CTBT."

Even if US elects Kerry, there is optimism here that economic considerations, lobby groups and the famous American capitalistic might will prevail once the rhetoric noises fade out.

Giants like GE, Microsoft and the rest have huge stakes in India which the US government will find hard to ignore. Jagdish Khattar, MD, Maruti Udyog articulates this saying: "John Kerry might tinker with the (H1-B visa) quotas but the US is a competitive, open market and the advantages of outsourcing would be brought home to him by the people concerned."

While opting for Bush, most CEOs agreed that irrespective of his political posturing on campaign trails, the new denizen of White House will, in his own interests, mostly maintain status quo.

"We are just looking at a pro India stance of the US government irrespective of whether Bush or Kerry wins in the presidential elections. The main issue nowadays is of economic nationalism and of protecting our own turf. US is doing the same and our stance has to be on similar lines," said RPG Enterprises vice chairman Sanjeev Goenka.

The looming oil price threat seemed to have played on several minds. Says Anand Mahindra, vice-chairman and MD, Mahindra & Mahindra: "As for the oil price curve, that has as much to do with demand as with supply. With both China and India firing on all cylinders, the energy balance in the world has changed forever. And on the supply side if Iraq is being viewed as a destabilising force, nothing much is likely to change on that score because Kerry is as committed to the US engagement in Iraq as Bush."

He further added that "politically, the Democrats will resonate better with the Indian government while economically the Republicans resonate better. But both Bush and Kerry are now of the view that India is a power that cannot be ignored."

There's also quite a section of the blue-chip brigade that with the Senate and the House of Representatives playing huge roles in decision-making feels there's little to choose between the two candidates.

Rajat Jain, CIO of Principal MF feels that the stock markets will be largely unaffected by the outcome of the US presidential elections as policy-wise they are unlikely to be on different war-paths.

If Kerry wins, the BPO and IT stocks may take temporary beatings on the bourses in the short term but that is not a big worry to the men on Dalal St. Both are likely to back further liberalisation, said SBI MF CIO Sethuram.

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