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BW Businessworld

India’s FTA Debacle

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Jeff Bezos does not laugh. He guffaws. often unexpectedly, at his own statements. But that’s how he kills stress, says the founder and CEO of the world’s largest e-tailer, Amazon.com.
 
His Buddhaesque face and a warm handshake are in stark contrast to the menacing, monstrous boss he is made out to be. It is hard to believe that a man of such warmth could, at times, send blunt, almost humiliating messages to employees. 
 
For all his quirks, Bezos is like no other CEO. Having founded Amazon 19 years ago, he pioneered an industry in e-tail, then an e-reader ‘Kindle’, and now, he is working on drones for delivery. By the time he hangs up his boots — if at all — Bezos could well be nudging Steve Jobs for the title of ‘the world’s greatest tech entrepreneur’.
 
My colleague Chitra Narayanan and I caught up with Jeff Bezos — a fierce rival, a feared boss and one of the most enigmatic characters in corporate America and the world — to dive deep into his mind to know how he leads.
 
In our second cover story this issue, just as the government is set to announce the new Foreign Trade Policy, we turn the spotlight on India’s free trade agreement (FTA) debacle. Senior editor Joe C. Mathew examines why a vast majority of India’s 16 critical trade agreements have had an unintended effect — increasing forex-guzzling imports at a rate far higher than exports. This has widened the negative trade balance with FTA countries to $14.3 billion, which is 7.5 per cent of India’s negative trade balance in 2012-13.
 
Clearly, successive governments planned this trade liberalisation very poorly. To some extent, India seems to have rushed into signing FTAs fearing isolation as more and more countries became members of regional trade agreements. But the bigger worry is that we are currently in active negotiations with more than 20 countries and trade blocs for similar agreements. 
 
Hopefully, we won’t repeat the mistakes of the past. But for that we must be aware of the mistakes we have made. The negative impact of FTAs is now under investigation by a parliamentary committee on commerce.
 
Meanwhile, despite the mess in India’s power sector (shortage of fuel, mounting debt, unviable projects and loss-making distribution companies), the interest in power generation hasn’t waned. Instead, Gautam Adani, Anil Ambani and the Tata Group are engaged in a game of one-upmanship over who will be India’s largest power generator.  They continue to commit thousands of crores to building large greenfield thermal power projects. Read senior editor P.B. Jayakumar’s account of this game of musical chairs on page 64.
 
On another front, even though DTH is growing at a faster rate than cable TV, the latter is the latest hotbed of dirty politics. Read senior associate editor Gurbir Singh’s story on how politician-backed cable TV networks are muscling in, sacrificing the very fundamentals of business ethics.
 
(This story was published in BW | Businessworld Issue Dated 03-11-2014)


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