Why Islamic Banking for Indian Economy?

By Syed Zahid Ahmad

With suppressed desire by Indian Muslims to have Islamic Banking in India, and avoidance to cite taboo word 'Islamic Banking' by Raghuram Rajan Committee report on financial sector reforms, it has became more important that besides considering the religious, social, political and diplomatic dimensions, we must understand the economics of Islamic banking for Indian economy. Hope India will not miss the Islamic banking as its missed Globalization bus in the eighties and Asian Tigers including China superseded it. Recently Zee news, Financial Express and the Statesman dailies have projected high potentials for Islamic banking in India. Before it become a political agenda during coming elections, it is better to evaluate economics of Islamic Banking. After all the political parties need economic rationality to convince majority of voters that Islamic Banking is not being allowed to please Muslim voters but to genuinely boost faster and inclusive growth for Indian economy.
Silver Lining for Islamic Banking in India:
A few companies are already dealing big businesses in Shariah Investments funds. Many financial sector players eying upon trillion dollars Islamic investment funds. Eastwind launched Islamic Index; and Reliance Money and Religare have launched Shariah Complaint Portfolio Management Services. As a result Indian Stock market is observing some better trends in Shariah complaint stocks. With increased market of Shariah investments world wide, if China is going for Islamic banking to attract Islamic Investment Funds, why should India hesitate allowing Islamic banking with 150 millions Muslim who may help us pool around one trillion dollars Islamic investment funds from Gulf countries that too on equity base which may keep our national current account and fiscal deficit under control? The experience of Islamic banks of Malaysia and Britain may be interesting; as in Malaysia, the Chinese businessmen are the biggest customers of Islamic banking, in Britain also, Islamic banks are not for Muslims alone. Similarly Islamic Bank in India will not stand for Muslims alone but for all Indians.

Formal Sector Economic Agents
Under Islamic banking the formal sector economic agents like corporate firms listed with stock markets would be the first likely beneficiary of Islamic banking because their shares would be subscribed through investors at Islamic banks. All the companies listed in stock markets will have additional potential subscribers to genuinely subscribe their shares instead of mere trading stocks to gain for speculation.

Islamic Banking and Public Finance:
Islamic banking may further help us mobilize capitals on equity base to meet the investment needs for irrigation, dams, roads, electricity, and communication projects along with other infrastructure where public finance is insufficient and debt finance may be cause deficit to the government. With Islamic banking raising equity funds would be easier for banks. We must not forget that over 50% of our rain fed lands need irrigation which need equity finance to reduce the credit costs. The total investment in infrastructure, in 2006–07 was estimated to be around 5% of GDP. It has to be 9% of GDP by 2011-12, it means that we would require Rs. 2,07,291 crores in 2006-07 and Rs. 5,74,096 crores by 2011-12 to finance our infrastructure. The total investment amounts to Rs 20,56,150 crore for the 11th five year plan. Of which Rs. 14,36,559 crores is supposed to be met from Public Investment wile Rs. 6,19,591 from private investments. Islamic banking through promoting equity finance from national and international markets may reduce this burden effectively with keeping public finance well under control and probably we may need not to worry about fiscal deficit as well.

Since Islamic banks may also have managerial control over commercial financing, government might use banking units as source to mobilize taxes as well which might reduce mobilization costs for public revenue and increase margins for governments.

Islamic Banking and Indian Economy:
Viewing the probable multi dimensional positive impacts of Islamic banking on Indian economy, there are many reasons to smile for Islamic banking in India. It is helping our financial sector maintaining stability while helping real economic sector attain inclusive growth. The public finance would be much benefited through Islamic banking by generating investment funds on equity basis. Thus Islamic banking should be considered as a core economic need of the economy instead of viewing it as a religious matter for Indian Muslims. By any projections, it is expected that Islamic banking may help us mobilize business up to 5% our GDP with making due corrections in financial and real markets. Therefore it should be considered as a genuine economic need of the nation instead of considering it as religious, social or political issue. Hope all patriot Indians will flag green signal to Islamic banking as it is opening the doors towards faster and more inclusive growth – An approach to 11th five year plan of India.

No visualization document for Islamic banking in India:
So far Islamic banking has been considered as a religious matter for Indian Muslims and thus it was denied with a fear of financial segregation, a threat of parallel banking system along with a hidden fear for SCBs to loose Muslim depositors. There has never been any public committee analyzing the impact of Islamic banking in India because Muslims of India were never so evocative about features of Islamic banking in India; while the other community had no background to conceive this concept to required level for projecting its utility for Indian economy. Though the concept of Islamic banking is driven by ethics of Islam, it has more economic rationality compared to its religious vigour which needs some genuine study by professionals having basic knowledge of Islamic banking with expertise on Indian economy because Islamic banking carries more advantageous features to boost real sector economy compared to financial sector.

Future leaders of Islamic banking in India:
There might be a prejudice among top bankers that since Islamic banking originates from Islam, Muslims might take a lead in Islamic banking and their supremacy in banking sector may not be sure after Islamic banking. However the reality may be far different from the fiction. Indian Muslims are hardly capable to hold major shares of Islamic banking business in India as they lack required infrastructure, financial depth, banking creditability to attract the general depositors and investors under Islamic Banking. Islamic banking is not a children's game. It requires even better professional expertise compared to conventional banking because it deals more with commercial projects than mere monetary credit and debit transactions. Indian Muslims may feel privileged in terms of Islamic ethics required for Islamic banking but they certainly lack professional efficiency to manage modern commercial banking on Islamic ethics. Our leading nationalized bank (SBI) is somehow reaching to that expertise which may be required to manage a complex banking project such as Islamic banking, but they have to hire services of experts on 'Islamic Banking'. The RBI code of conduct to SCBs putting thrust on SMEs is reflecting the need of advanced commercial banking in India which would be focus under Islamic Banking. The performance by SBI has been best among nationalized banks to lend commercial credits. But still majority of unorganized sector workers who are non-bankable due to collateral problems are actually needing equity finance instead of debt finance. All the difference among nationalized bank's operation and Islamic banking is the mechanism of credit and deposits. Under Islamic banking mechanism thrust would be on equity deposits and credits while interest charged would be replaced by profit margins on commercial credits and interest expended over deposits would be replaced by dividend on equity finance with deposits mobilized as equity deposits by banks.

It is expected that with introduction of Islamic banking in India, the first choice of depositors and investors would be nationalized banks as despite contradiction of interest, Indian Muslims have a confidence in nationalized banks. To ensure security of deposits majority of Muslims depositors would prefer to join Islamic banking managed by nationalized banks. However it is expected that Foreign Investors looking to invest in India through Islamic banking, would prefer to have services of foreign banks. As far Indian Muslims are concerned, they have to make hard efforts to find their place in managing Islamic banking in India because they lack required financial depth; infrastructure and more importantly they have poor credibility among the depositors and investors due to some past failures of financial institutions.

Islamic Banking for Inclusive Growth:
Besides religious, social, political and diplomatic reforms, Islamic banking is more desired for Inclusive growth of India. It is interesting to evaluate probable impact of Islamic banking in different segments of Indian economy. Islamic Banking is the only mechanism which seems capable to tame the liquidity and inflation problems along with allowing inclusive growth. The increased percentage share in GDP by agriculture or manufacturing industry, or per capita income growth is just not indicative of true inclusive growth. For real inclusive growth, we have to ensure increase in income and employment status of workers in all segments. Empirical evidences reveals that though India has registered better growth rate in recent years, the number of poor living below poverty line has increased. Our household consumption which has declined in recent years is driven by household income; while corporate savings reflects income of corporate sector which has increased. In fact with better GDP growth rate in recent years, our corporate sector has snatched the fruits of growth, while majority of work force have failed to enjoy the fruits of development.

Similarly the share of financial sector in GDP has increased in recent years. Since our SCBs extend debt finance, the credits extended by SCBs add interest as part of GDP cost which causes inflation. While under equity finance, credit cost being zero, the growth of credit share to GDP does not push cost of GDP, thus restricts inflation. Simultaneously the dividend shared by depositors on equity finance helps equitable distribution of income generated by financial sector. Thus instead of concentration of credit to corporate sector, the generated income is shared by household sector which increases level of consumption and pushes the economy on faster growth track. This basic difference between debt and equity credit needs attention of our financial sector regulators.

Their financial background (in lack of collaterals) of farmers and poor workers associated to unorganized sector manufacturing and retail industries do not encourage SCBs to extend more debt finances. With schemes of loan waiving, the debt market is more dried for SCBs in agriculture sector. Even the SHGs, JLG schemes of Micro Finance are failed to add livelihood stocks for poor and vulnerable. This low tendency of economic reforms by financial sector for majority of Indian workers is creating imbalance in growth trend. India's GDP is increasing with increase in number of poor living below poverty line. The fruits of growth are really not shared among Indian nationals, but among Indian sectors. This fact needs attention of policy makers and regulators to launch better financial instruments / banking mechanism to ensure worthiness of credit supply to the needy segment of our economy.

Insight on Islamic banking reveals its potential to build infrastructure for our agriculture sector where workers are incapable to add infrastructure due to poor financial risk capacity, thus suffers a lot in productivity and economies of scale. Islamic banking could also help our unorganized sector manufacturing and retail industries avail equity finance to arrange capital required to compete with formal sector industries. These financial needs could not be fulfilled without Islamic banking because the financial vulnerability and low financial risks capacity of workers requires equity finance instead of debt finance which is neither provided by SCBs nor by MFIs because all credits by SCBs and MFIs are interest bearing.

If Islamic Banking is allowed the inadequate labour capital ratio for informal sector workers associated with agriculture and manufacturing industries could be resolved through equity finance which might be a revolution is our agriculture and unorganized sector. With improved labour capital ratio, our poor and vulnerable workers associated with agriculture and unorganized sector might be able to compete with the formal sector workers with increased productivity. Thus Islamic Banking may financially empower over 90% Indian workers associated to agriculture and unorganized sector manufacturing and retail industries.

Islamic banking may induce our political leaders to substitute grants and subsidies with equity finance schemes through specialized financial institutions because equity finance allows access to credit without debts of borrowers. Equity Finance helps achieve self-reliability, required for growth, which never comes through grant and subsidies but with successful utilization of equity finance. The stabilization funds for poor farmers / artisans may be utilized to experiment such finance. Islamic banking may not be a religion based banking business, but it could well resolve our real economic problems.

Islamic Banking and Financial Inclusion:
Though we do not have any survey to compare community wise financial exclusion in India, the study of data available through Sachar Committee report reflects Muslims are most disadvantaged community in financial sector, and banking is inversely related to concentration of Muslim Population. Muslims have over 80% Muslims financial exclusion due to interest based deposit and credit schemes available with formal financial institutions and SCBs. Due to restriction on Islamic banking mechanism in India, financial sector was one of the most unfavourable sectors for Indian Muslims. This reflects participation of Muslim workers in RBI and SCBs as well because with population share of 13.47%, Muslims have 0.78% and 2.2% share in employment with RBI and SCBs. Similarly the participation of Muslims with specialized financial institutions and corporations like SIDBI, NABARD and NMDFC is miserable. Hard to believe that Institutions like National Minority Development and Finance Corporation (NMDFC) have no Muslim employee. This has excluded Indian Muslims from formal financial and banking sector in India and to get rid of interest with meeting the banking and financial needs, wherever Muslims are concentrated; they find practice interest free banking through societies and NBFCs. With inception of Islamic banking it is expected that Muslims will join Islamic banks which will remove their financial exclusion.

The Indian Muslims have a share of 7.4% in saving deposits while just get 4.7% of credit in terms of PSAs. If we consider this as a standard proportion in national aggregate deposits with and credits maintained by SCBs, Indian Muslims annually loose around Rs. 66,700 crores because Muslims have a credit deposit ratio of 47% against national average of 74%. It shows that Muslims of India loose around 27% of their deposits by not availing as credits. After Islamic banking this deficit may be removed to curb financial loss to Indian Muslims because with 31% Muslims living below poverty line and 40% Muslim workers as own account workers, the deficit of credit is like economic assassination of the community. Muslims avail just 4% and mere 0.48% credits from special financial institutions like NABARD and SIDBI respectively because there also the community has to indulge in interest which is strictly prohibited in Islam.

The schemes launched by RBI, NABARD, SIDBI and Ministry of Finance for financial inclusion focus on providing access to credit and other financial products. As allowing access to Mutton shops for non vegetarians cannot yield inclusion of non vegetarians to mutton retails, interest based banking system will not help attaining target of financial inclusion for Indian Muslims, because interest is so strictly prohibited for Muslims that it is more acute than prohibition of muttons for vegetarians. The operation of Islamic banking will allow the Muslims to work with majority community in banking sector and it would definitely help us build civil society economy.

Introduction of Islamic banking in India may please 150 millions Indian Muslims, the second largest community of India who are somehow uncomfortable with use of word Islamic terrorism. Moreover with introduction of Islamic banking, Indian government will certainly gain diplomatic advantages to make financial dealings with Muslim dominated nations especially to attract trillion dollars of equity finance from gulf countries. This is more important after Lehman fall because it reflects US crisis and need of alternative sources for FDI required for Indian Economy. After US, Gulf Market could only be targeted (through Islamic banking) because other countries like China are not exporting financial resources.

Business of nationalized banks would be increased:
So Indian Muslims are looking for Interest free banking to avail much needed credits for development which is possible through introduction of Islamic Banking in India. This may add at least approximately 60 millions Muslims to formal financial sector. Through this financial inclusion of Indian Muslims to formal sector Islamic Banks, it is expected that Indian nationalized banks may see additional savings worth 1,00,000 crores and credit worth over Rs. 2,00,000 crores which may help banks to gain higher rate of profits compared to their SLR. After successful operation of Islamic banks by our nationalized banks, private banks may also enter into dealing with Islamic banking

Stock Market Capitalization
Since Islamic banking focuses on equity deposits and finance, it is expected that Stock market will be the most preferred avenue for investments by future Islamic banks of India because currently it is our stock market which is attracting new investments under Shariah Finance schemes. With advanced art of technology for investment with liquidity and profitability, it is expected that majority of deposits with Islamic banks in India will be preferably canalised to stock market. It would be the safest and fasted mode of deploying equity funds. Thus Islamic Banks may add additional 6 million new D mat accounts with expected capital gain of Rs. 60,000 crores from domestic market and around 1 trillion US $ through Islamic Banks managed by foreign bankers in India.

Nandan Nilekani confident of changing India with ideas

New Delhi (IANS): Can ideas change a nation? Co-founder of Indian software giant Infosys and author Nandan Nilekani believes that they can, even if it takes a long time for them to become embedded in the collective psyche of the country.

"The process of change has to start somewhere. Rome was not built in a day. People will have to make it happen. They can start building on the broad based concepts of democracy, information technology, population or demography, globalisation, English and ideas. No country in the world has all these six things together. It is unique to India," Nilekani told IANS in an interview.

He was in the national capital on Monday for the launch of his book "Imagining India: Ideas for the New Century," which has been published by Penguin India. The book is the first in the series of Penguin's "Allen Lane - The Imprint of Ideas". The imprint, launched in 1967, is named after the founder of the publishing house.

"Imagining India" probes India's growth story over the last 60 years, examines the central ideas that have shaped modern India and offers perspectives on the past, present and the future.

Nilekani writes about how India's early socialist policies, despite the good intentions and idealism, stifled growth and weakened democracy.

The book analyses how the country's overwhelmingly young population has now become its greatest strength - and how IT is refashioning not just India's businesses, but also its governance and everyday life.

Nilekani does not stop at listing the ongoing processes of change, but plunges deeper into the heart of Indian real polity to debate about caste, politics, labour reforms, infrastructure, environment, markets and higher education.

"It is all about ideas. Ideas happen not because of diktats, but because society starts believing that the ideas are the best for them".

"For instance, the idea of English in India began as a language of outsourcing by the British - forging a collective linguistic unity. But post-Independence, it became the language of imperialism. The same language, however, came back in the globalised era as the language of outsourcing," Nilekani explained.

India Inc sees a silver lining in cloudy skies, waits for rebound

INDIAN IT industry will see growth slowdown this year, but companies feel they will be in a position to take advantage of the next growth cycle, said industry leaders on Sunday.
    Speaking at the India Economic Summit, organised by the World Economic Forum and the Confederation of Indian Industry (CII), Infosys Technologies executive cochairman Nandan Nilekani said the growth witnessed by the IT sector in the last 4-5 years won't be replicated this fiscal, owing to the current economic slowdown. Infosys, which recently revised its full-year guidance downwards, would go ahead with its planned recruitments, he added. The country's second-largest tech firm plans to hire 25,000 people this fiscal.
    "There's a global scenario which is unprecedented and it'll have an impact on everybody. But time and again, the industry has demonstrated that it's resilient enough to deal with the harsh challenges," said Mr Nilekani. Referring to the 2001 dot-com bust, Mr Nilekani said that the current economic situation is not as profound. "At that time, we not only got out of the situation but took various learnings from it. As of now, the companies are just waiting for the downturn to subside and are getting ready to take advantage of the next growth cycle," he said.
    Satyam chairman Ramalinga Raju said the ramifications of the economic crisis were not fully understood yet governments across the world are pro-actively taking measures to control it. "I don't think everything is understood yet about the crisis. I think the significant moves by various governments in a concerted way will have a positive effect. If the economic outlook improves, sentiments would also improve across industries. So far, our assessment of what we may expect from the year has not changed," he said.
    Satyam revised its dollar guidance for the year downwards last month on account of rupee depreciation and volume reduction. It expects FY09 revenues to be about $2.55-2.59 billion against a previous guidance of $2.65-2.69 billion. Indian IT association Nasscom, which had given a guidance of 21-24% growth for the current fiscal, would soon review the forecast. A downward revision is considered likely.
    Mr Nilekani, whose book Imagining India: Ideas for the new economy would be launched soon, said that the current crisis has shown that there needs to be a focus on basics. "We should learn from the mistakes that developed nations such as the US, Europe and Japan have made and see how technology can be used for transformation. There's a need to look beyond the divides of caste, creed and religion, and emerge as an integrated nation," he added.
    Infy offers sabbatical
    to 50 employees
NEW DELHI: Infosys CEO S 'Kris'- Gopalakrishnan on Sunday said the company has offered a one-year sabbatical to up to 50 employees in a year to work with NGOs. The company's total employee strength is over 1,00,000 and only 0.05% of its workforce will be able to avail this scheme annually. "Up to 50 people in the company can take the sabbatical in one year. We did this six months ago. It wasn't introduced now but it got linked (to the slowdown). It's not our way of managing utilisation," Mr Gopalakrishnan said. A few days ago, a business daily had reported that the country's second-largest IT services firm had been encouraging it staff to take a sabbatical. Those on sabbatical will get 50% of their salary, while drawing some amount from the NGO as well.

‘India’s equity market is on fire right now’

In an interview, Jeffrey Joerres, the chairman and chief executive officer of Manpower Inc, USA, outlines his views on India's future growth direction and the risks involved.

Given the current economic climate, where do you think are the opportunities with respect to India's future growth?
    Well, there are many opportunities. One of the most impressive things about India right now is that it is still in growth mode. When we look across the world, there are not many places that can claim the kind of GDP growth that is happening in India.
    Where the real opportunities are is to keep that momentum going — whether continuing to bring in foreign direct investment or what the governments need to do. Also, the real opportunities are in making sure that the great brains and all that intelligence and some of those things that really define India are maintained within that environment of some great growth opportunities.
What do you think are the major global shifts which could present a risk to securing India's future growth?
    There are some things that are really important to India's future growth. While there are some risks and clearly we are seeing some of them right now — some of the financial and liquidity risks and it seems as though India has been able to take care of much of that — what might not have been considered a risk three weeks ago, now looks like a risk. But having said that, there are still some regarding infrastructure and other things, as well as really being able to being able to take advantage of the opportunity that these are presented within these downturns
    Also equity markets are equity markets. And the equity market in India is on fire right now. What can happen is that companies can equate their worth and expenses based on equity markets and most likely the equity markets, regardless of what the Indian government is going to do, can fizzle out a little based on what is happening in the world. This is clearly a risk for India.
Which industry sectors will shape India's future competitiveness?
    India is really off to a great start when you look at industry sectors. What happens in many countries is that they don't have what is called in many circles as a clustre. When you look at IT and engineering and some of the infrastructural gains that have been made even in manufacturing, energy and telecom, all of these allow for India to clustre around some industries that have global importance.
    So be it a domestic national issue to be able to solve or a global issue, India is very well positioned to take advantage of these because they have the university and educational systems and these clustres that have global interest which should drive them well into the future.
    Courtesy: World Economic Forum press office

INDIA DECODED

'Create a broad route, not a narrow staircase'

Asha Rai & R Edwin Sudhir | TNN

    Nandan Nilekani's eagerly anticipated 'Imagining India—Ideas for the New Century' was handled by New York literary agent Andrew 'The Jackal' Wylie. It was snapped up by Penguin India, with Nilekani receiving the biggest advance ever paid to a non-fiction writer in India. So what's all the fuss about? Nilekani tells us. Excerpts from an exclusive interview:
Q. Why a book on ideas? What makes you uniquely positioned to write on the subject? A. Several motivations. My job required me to meet a lot of people around the world. They would ask questions about India and its contradictions: 'How did you launch a space programme amid so much poverty? How can you have the IITs when there is so much illiteracy?' I didn't have answers to all that. So, I thought if I do this book, I will also get some clarity about what's going on.
Q. You say on the very first page that you are 'unelectable'. Was that a motivation?
A. That is correct, in a sense. I mean, what is my contribution to change? It can come only in the realm of ideas.
Q. How did you go about writing the book?
A. Though it seems a bit odd to say it, I thought of writing it like a software programme. When you write a large software application, you divide it into sections. Then you design the modules. I applied the same concept. I said, 'I have these 18 ideas', and I saw a pattern in the ideas in terms of the maturity in the Indian psyche.
Q. Why hasn't our politics embraced reforms more deeply and openly as you point out? A.Our reformers have been reticent because the connection between reforms and why they are good for the people has not been established. A lot of people continue to promulgate bad ideas. Half-reforms are worse than no reforms. In half-reforms, those who are better equipped to deal with opportunities take full advantage of them. The trick is to expand the opportunity for everyone. The whole idea is to create a broad route rather than a narrow staircase for people.

I mean, what is my contribution to change? It can come only in the realm of ideas
—Nandan Nilekani

Obama appoints fourth Indian into his 15-member transition team

Indian-American management expert Anjan Mukherjee has been roped in by US President-elect Barack Obama into his transition team, the fourth person from the community to be part of the 15-member high-profile group.

Mukherjee, a Managing Director of Corporate Private Equity group at Blackstone, has been appointed as one of the team leads in Economics and International Trade.

His appointment has been the latest one as three other Indian-Americans - Sonal Shah, Preeta Bansal and Nicholas Rathod - have already been inducted into Obama's team.

Mukherjee has been involved in the execution of a number of investments in a wide range of industries.

He has received a BA from Harvard University where he graduated magna cum laude as a Harry S Truman Scholar and an MBA from Harvard Business school.

Before joining Blackstone, he worked with Thomas H Lee Company and Morgan Stanley & Co. He has also worked at the Department of Education (in the Fund for the Improvement of Postsecondary Education) as well as the Brookings Institution.

Obama is the first African-American to win the US presidential elections. He will take over as the 44th president of the US on January 20, 2009.

The Indian-American community overwhelmingly supported Obama in the November 4 elections and are said to have voted for him by more than a two to one margin.

http://www.hindustantimes.com/StoryPage/Print.aspx?Id=5528cbf8-03a5-4e85-b88c-e1ea99e0fed5

© Copyright 2007 Hindustan Times

THE FUTURE OF BIOPHARMA IN INDIA IS BRIGHT’

ONE OF THE LEADERS IN THE BIOPHARMA WORLD, UCB IS DEEP INTO RESEARCH ON VERY CRITICAL HEALTH ISSUES. IN A CHAT WITH NARENDRA KAMATH, CHARLES-ANTOINE JANSSEN MANAGING DIRECTOR OF UCB GROUP IN INDIA UNDERLINES THE COMPANY'S OBJECTIVES AND GROWTH PLAN

    ET: What initiatives are you working on to take the benefits of Biopharma to the people in this country?
CJ: UCB is working extensively on epilepsy di-stigmatisation with various NGOs and numerous doctors. We feel that benefits of modern epilepsy treatment is not reaching many patients due to wrong beliefs about this disease. We have also recently started assessing the needs of rural India and how we could make a difference in making more high quality drugs available to the most remote parts of India.
    The pharma industry in India has not always been very environmentally friendly. In addition to new water purification systems in our Vapi factory, we are also proud to be the first pharma co in India to have off-set all our CO2 emissions. We are also contributing to the development and trying to make available to Indian patients, their families and doctors, highly effective and innovative medical solutions.
    In January 2008, UCB opened a primary care healthcare center in Killai for patients affected by the Tsunami. UCB has committed to fund and supervise the management of this center for 5 years. We also donate our products on various occasions to parts of the countries that are in special need such as during the recent floods in Bihar.
What do you think is the future of Biopharma in India?
The future of biopharma in India is bright. We aim to combine the best Western science and Indian wisdom. First of all, there is a large talent pool of world-class doctors and scientists, some returning from Europe and the US. There are clear benefits for Western pharma cos and biotechs to do research, development, development services, manufacturing and admin work in India. Finally, as income levels rise, health infrastructure improves and heath insurance increases its penetration, the Indian pharma market will benefit
How has the journey been so far here? What obstacles, if any, have you faced in functioning in India?
The journey has been very rejoicing and interesting. Rejoicing to see so many colleagues work enthusiastically in building relationships with doctors and patients, in producing high quality medicines and in providing better and better solutions to our UCB colleagues in the West.
    Despite numerous changes in UCB India's objectives and ways of working, we have faced a fairly limited number of obstacles. The main obstacle faced at first was maybe due to the excessive respect for their superior that many Indians seem to have. Often my colleagues understood the ground reality better than I did, but would not tell me I was wrong. Hopefully, these days are now far behind us as we work as a close knit team pursuing the realisation of UCB India's vision and mission.
Which are your most ambitious researches that are taking shape currently?
Because of its unique combination of research skills in short and long molecules i.e. chemical and biological compounds, UCB is designing new synergistic approaches to drug design and drug development. More and more of this is likely to take place in India in the future as we find partners who are willing to
work beside us for the long-term and share our patient-centric state of mind.
With the entire Biopharma sector in India expecting to clock a double digit growth, where do you see UCB group in the near future?
In 2008, we except UCB India to grow its topline at a double digit rate, most probably quite faster than the market average. In 2009, we plan to grow faster than in 2008, as a result of organic activities, new product launches and partnerships. We will contribute to the development and will make available to Indian patients and doctors highly effective and innovative medical solutions. We will nurture and expand our employees' competencies and help them to realize themselves.

What Obama's win means for India

NEW DELHI: With Democrat Barack Obama winning the White House, India is hopeful that its multi-faceted ties with the US, revolutionised by a landmark nuclear deal during the Bush tenure, will acquire new force.

"The real strategic partnership between India and the US will begin with a new government in Washington and New Delhi next year," Lalit Mansingh, former ambassador of India to the US said, soon after it became clear that Obama had rewritten American history by becoming the first African-American to win the White House.

Trade and investment, defence and agriculture - all those areas which were sidetracked by nuclear deal would now come to the fore, said Mansingh.

"Indians should celebrate change in the political structure of the US. Obama's presidency begins a new chapter in America's political history, a new chapter in America's engagement with the world and a great opportunity for India to combat terrorism in its region," said Chintamani Mahapatra, professor of American studies at Jawaharlal Nehru University.

"I visualise a very bright future for India-US relations. He would be the first Democratic president in the White House after Bill Clinton who began the path-breaking turnaround in India-US ties during his visit to India in 2000. He will build upon that legacy," Mahapatra said.

Less than a fortnight ago, the 47-year-old Obama had promised to make strong strategic partnership with India a "top priority" of his presidency and described New Delhi as "a natural strategic partner" for Washington in the 21st century. Obama, who liked to keep Mahatma Gandhi's portrait in his Senate office, is also known among Indian-Americans for his fondness for Indian dal.

Experts and diplomats see Obama's promise to restore America's moral standing in the world, especially in the Muslim world, that was damaged by military intervention in Iraq and his more nuanced policy on combating terrorism working to the advantage of India in the region. This will deflect some of the hostility the US attracts among India's 140 million Muslims.

"Bush was more muscular in his approach to what he called the Global War on Terror. Obama is likely to broaden the alliance against terror and use a combination of diplomacy and force that may be better suited for India's interests in the region," said Mahapatra.

Agreed Mansingh, "Obama believes in exercising smart power. Obama will be less inclined to use military force."

The 94-page Democratic Party document entitled "Renewing America's Promise" adopted at its convention in Denver eschews using the phrase "Global War on Terror" and focuses on ending the war in Iraq, stablising Afghanistan and "combating violent extremism".

Obama has, in fact, accused Pakistan of misusing funds for the war against terror and allegedly using it to fund militancy against India - remarks which were hailed in India's diplomatic and strategic circles.

With the global financial crisis affecting emerging economies like India, Obama's advocacy of a stricter oversight on the financial institutions and greater state interventionism also inspires greater confidence in this country, said Mahapatra.

Not all are so enthusiastic about the Obama presidency in India though. The diplomatic establishment and strategic circles are treading cautiously, especially after Obama's recent remarks on Kashmir, which they see as a throwback to American postures 10 years ago.

In an interview last week, Obama had said: "We should probably try to facilitate a better understanding between Pakistan and India and try to resolve the Kashmir crisis so that they can stay focused not on India, but on the situation with those militants."

"It is ill-advised and outdated and reflects his advisers have not kept up with the times," said Arundhati Ghose, a former Indian diplomat who represented India in the UN, while advising a wait and watch policy towards the Obama administration.

K. Subrahmanyam, however, counseled that India should not overreact. "Obama is a flexible intellectual. Let's wait and watch".

Another issue that is causing concern in India is Obama's incentives to American companies who don't outsource jobs. "This is certainly going to affect us if Obama's policies turn protectionist. Given the financial meltdown, there is a greater likelihood of protectionism," Ghosh said.

Mansingh also sees a potential pitfall in Obama's strong views on non-proliferation and Comprehensive Test Ban Treaty (CTBT). "India will be under enormous pressure to sign the CTBT," pointed out Mansingh.

Ghose, however, thinks India need not worry much on this count as the nuclear deal has been sealed and New Delhi will not mind coming on board after the US and China does so.

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