Wednesday, June 24, 2015

Indian entrepreneurs in Africa-Hail the new breed of colonizers!

Indians are the latest colonizers in Africa, Ethiopia being the major destination for large Indian companies. The term "Colonizer" cannot be taken in a negative way because these investors from India do not own the land but take the land on least for 50 years at the rate of about Rs 1-2 crore per year. It must be remembered that Ethiopia was almost ruined by the communist rulers who had a stranglehold on the country without doing any thing to improve the lots of the people there. Now that progressive regimes have taken over the reins there, it has dawn on the country that it has neither the expertise or working population to realize the potential of the land to increase the GDP. What are these Indian agricultural entrepreneurs doing in Ethiopia which they were not able to do back home. Read further below to understand this phenomenon.   

"Firms from India have acquired over 600,000 hectares of land in the country, which is more than 10 times the land acquired by the companies in India under the 2005 Special Economic Zones policy. US policy think tank, the Oakland Group, says that Hyderabad-based Karaturi Global operates 300,000 hectares of land to grow palm oil, cereals and pulses, leasing the land for a mere 1.81 crore per year for 50 years.Apart from these, S&P and Energy Solutions operate 50,000 hectares of prime land to grow biofuels and edible oils, leasing the land for 2.2 crore per year for 50 years. According to the US think tank, BHO Agro PLC operates 27,000 hectares of land to grow cereals, pulses and edible oils, leasing the land for 93 lakh per year for 50 years. Exports to India from Ethiopia are primarily vegetable products which jumped from $2.7 million to $28.5 million between 2006 and 2012. Despite strategic holdings and the influx of food grains from those holdings, India topped the United Nations' 2015 World Hunger list surpassing China. This highlighted that despite the supply, problems persist with the delivery system, which cannot meet the basic needs of millions of Indians."

Whether one has to admire the initiatives of these entrepreneurs or frown on them for their "deserting" their homeland is an issue that does not deserve any consideration at all. India, despite the exhortation by the PM to promote "make in India", is not an investor friendly country and when it comes to land there is no rhyme or logic in obfuscating the issue causing considerable delays and hiccups for any entrepreneur to get into business. Look at the "circus" being played out in the open by various political parties to obstruct easing restrictions on land acquisition sending wrong signals across the world and how can one blame Indian investors looking beyond the country seeking greener pastures. When these entrepreneurs are being "finger pointed" for not being patriotic enough to send all their production back to India for improving food situation in the country is just plain non-sense! Industrial activity is not a charitable one and it presupposes that there is reasonable returns on its capital investment. Here also India investors cannot be expected to send their production to India as the dynamics of the market govern where it should be exported after meeting the local obligations under the lease agreement with the host country. Hail these new breed of Indian entrepreneurs who have the guts, gumption and courage to work in foreign soils under uncertain environments! 


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