11 ms·

U.S. Tech Giants Bet Big on India, and Now It’s Changing the Rules

41 points by r_singh 7y ago

sairamkunala 7y ago
https://www.morningstar.com/news/dow-jones/201912036105/us-tech-giants-bet-big-on-india-now-the-rules-are-changing https://www.morningstar.com/news/dow-jones/201912036105/us-t...
icsllaf 7y ago
Well it worked for China, they now have large corporations of similar (enough) caliber to their Western counterparts creating a lot more jobs than if Amazon or Google were allowed to run free. It's hard enough to compete against these established Tech Giants if they just come in and buy all the domestic companies. Not to mention the companies are starting with a massive head start.
- vezycash 7y ago
  > Well it worked for China What worked for China was acting a fool for a few decades. No rules, no regulations, nothing. Like a boa constrictor, staying motionless, allowing its prey to feel completely relaxed, then slowly but surely, tighten its grip until it's too late for the prey to escape. With its proximity to China, India could have had China's business.
  - elfexec 7y ago
    Goodness, you can count on the weirdiest analogies on social media when it comes to china. But I guess it's par for the course in any trade war. What china did was nothing special. It wasn't revolutionary. It was what every industrial power today did - from the US in the 1800s to germany and japan and the asian tigers like south korea and taiwan did. Protectionism + foreign investment + manufacturing. The united states created the blueprint for success in the 1800s. All the smart nations have copied it and gotten successful. One of the first things the US did was to place tariffs to protect local industry. And for 100 years, protectionism was how the US rose from a relatively insignificant nation to the largest economy in the world. https://en.wikipedia.org/wiki/Protectionism_in_the_United_States https://en.wikipedia.org/wiki/Protectionism_in_the_United_St... Without the tariffs and protectionism, the US industries would have been owned by britain, france, etc. Or maybe it was like a boa constrictor. I don't know.
    - raverbashing 7y ago
      A lot of countries apply protectionist measures and have stagnating industries, protectionism is not enough to win the game.
    - true_religion 7y ago
      US tarrifs were originally intended to hurt Britain, as the US had recently rebelled against them. The tarrifs then increased during every war the US had with Britain. It’s no surprise that the US talks of trade wars, due to the way its history of tarrif is entangled with warfare, and dislike of the nations a tarrif is aimed against,
      - bernawil 7y ago
        It was quite literally a rallying point for Lincon and a reason for the civil war. Southerners wanted free trade to export tobacco and cotton. Northerners wanted tariffs and protection for their industries (both to make their factories more competitive against European manufactures as to get cheaper raw materials from American farmers).
    - NicoJuicy 7y ago
      He's addressing the issue that China joined the WTO, but is not following up on their promises since >20 years.
    - zzzzzzzza 7y ago
      you are wrong on foreign investment.. what you mean is domestic bank credit (see size of china's banking system)
DeonPenny 7y ago
I feel this isn't going to work well the second time. Automation right around the corner and India isn't willing to do the things china was allowed to do.
- r_singh 7y ago
  > India isn't willing to do the things china was allowed to do Care to a elaborate a bit please?
  - pcr0 7y ago
    * Banning major search and social websites (Google, FB, Twitter) * Mandatory censorship of information (Google before leaving, Bing) * Foreign ownership limits (aka forced intellectual property transfers) * Capital outflow restrictions * Heavy subsidies allowing local firms to sell products at below cost (e.g. steel, bicycles)
- elfexec 7y ago
  > I feel this isn't going to work well the second time It worked a second time and half a dozen times more just the past 100 years. Japan, Germany, France, South Korea, Taiwan, etc all used protectionism to develop their local industries and companies, just like the US did in the 1800s and like China did most recently. Protectionism is required to protect young local underdeveloped industries and companies from wealthier foreign companies. Every major industrialize power used protectionism to get to where they are at today. https://en.wikipedia.org/wiki/Protectionism_in_the_United_States https://en.wikipedia.org/wiki/Protectionism_in_the_United_St... It isn't a secret. It's a well established fact by now. > Automation right around the corner and India isn't willing to do the things china was allowed to do. Rather than automation, it's india's politics and the mindset of a large portion of their elites. If you want to understand why india won't be successful, just look at the members of the british commonwealth. You'll see that india is still in it. If the political elite of india, for whatever reasons, still think being part of the british commonwealth is a good idea, it is obvious they are not going to do anything to truly improve india - especially things that might hurt their former colonial masters and the west's interests. You'll never see the US in the british commonwealth with the english queen as our head of state. I'm sure you'll never see china in it either. The elites in the US and china has some national pride needed to improve their nations. Also, india doesn't have the "political center/authority" with which to enact painful reforms internally to industrialize and to ward off external pressure from the west. The problem with India is that they lack the nationalistic aspects of Japan, Germany, France, South Korea, Taiwan, etc which allowed these nations to protect their local industries and develop. And any attempts towards a nationialism in india would led to some internal friction, but more importantly, the west will stoke divisions within the population and amongst the elites to destabilize india and get it back under control. India has a lot of potential but without a strong political center/authority, it can never fulfill its potential. And you only really need that strong political center/authority to provide internal stability and protect from destabilizing foreign interference for a decade or two to help your local industries and companies to develop and industrialize. Otherwise, your country will be bought up by capital rich companies and countries. Who knows if Modi is the man for the job. Given india's history, I won't be holding my breath. Also, in case you think protectionism doesn't exist in the US, China, Japan, Taiwan, South Korea, etc. look at what is happening with huwaei and the trade war. Look into the protectionist policies of every major industrial nation. It's strange how the wealthy nations love protectionism for themselves but want open markets for poor nations.
m0zg 7y ago
Nothing a billion dollars in bribes couldn't alleviate. Which is why India is "changing the rules" in the first place. Look at how much their civil servants make, and then look at their lifestyles, and it'll all be clear as day.
- tsjq 7y ago
  your comment nailed it.
  - m0zg 7y ago
    Coming from a high-corruption country myself (Russia) the pattern is easily recognizable. It's also recognizable in the US, but people here seem to still believe, at least to some extent, that the politicians have something other than their own self interest in mind. A perilous belief, guaranteed to be proven wrong.
    - throw51319 7y ago
      What's the pattern? People enter "public service" and then become rich or their lifestyle inflates to imply that? At least in the US we can easily find out this information and vote on it.
      - JackRabbitSlim 7y ago
        Obama was the "Poorest" president in 50 years at only something like 4 Million to his name when he took office. It's also interesting to note he is from the most corrupt district in America. He is still a good example. Do you remember all the freely available information that showed Banks, Oil companies and massive corporations all spent considerably more on Clinton's 2016 campaign, yet somehow the media tells us Trump is "Big businesses" guy those companies worked hard to get into office? Easily verifiable to you right now. Are you going to go check my work? Opensecrets.org Cognitive dissonance is never so strong as when we are telling ourselves it's not cognitive dissonance.
      - m0zg 7y ago
sandGorgon 7y ago
One of the thoughts in India is that all these regulations can be read to favor just one gigantic entity - the Reliance Jio group..who is going to reap the benefits of this protectionism. But no other startup probably is (because all startup fundraises originate in the US)
- lafka 7y ago
  Care to elaborate? I keep hearing that along with similar things like "once Ambami/reliance adopts $xyz-tech everything will shift there". Due to its size Reliance is obviously in a position of power but do you see them lobbying for control in sectors outside telecom? Didn't read article due to paywall
- jagannathtech 7y ago
  invoking Reliance is just a convenient boogeyman. can see plenty of domestic and govt investment in local startups.
Mbaqanga 7y ago
Wow! Amazon and Walmart have captured 80% of online retail sales in India. Modern colonialism.
netcan 7y ago
I expect we're going to see more of this over the next 5-10 years, especially in the digital economy. In the 70s, where a country was protectionist about cars, that probably meant fewer, worse and more expensive cars. Same for steel, dishwashing soap, telephones and shoes. Trabants instead of Toyotas, and less of them. Protectionism came with a high efficiency cost, and that meant poverty. Today's digital economy can be very different. The relationship between incoming revenue and outgoing expenses is often arbitrary and that means efficiency is squishy. If Toyota had to operate on half it's current budget, Toyota would produce half as many cars. If Facebook had to operate on half (or less) of it's current budget, they "produce" the same social media (or advertising) "product." The cost of protectionism in this environment is totally different to steel, cars and ikea furniture. If Facebook and twitter cease to exist, the "supply" of social media experienced by the public isn't a problem... at least not for long. An ecommerce business is not a social media business, but it is further along that spectrum. So is a smartphone business, financial services business, online ad platform and many of these "digital monopoly" sectors. The protectionist proposition is just more attractive, with the big, immediate, obvious costs removed. Protectionism has always been popular, politically. It's nationalistic, and that's popular with the public. It puts a lot of policy making power in politicians hands and that's popular with politicians. Business tends to like it, domestically. Opening trade was, imo, and contrary to popular opinion, a forced hand. It was never ideological. Ideologically, it's unpopular. The "stable state" is protectionism. Protectionism was just very costly in the 70s, 80s & 90s... so it died down some.
- rat9988 7y ago
  >and that meant poverty. It doesn't mean that at all.
- fsloth 7y ago
  Asian economies such as Korea grew precisely due to government enforced industrialization programs. Protectionism is excellent for an economy's 'bootstrap' phase where you wish to create some sort of viable industry where none existed before. To make this long term tenable, you have to then slowly pull back and return to a more market based approach.
roenxi 7y ago
Reflect for a moment on the system we currently use for big corporations which has a lineage roughly dating back to the East India Company in 1600. The reason we still use them is because they proved so devastatingly effective at draining wealth from exotic foreign lands that nobody could do without them. The free market is best for maintaining general prosperity; it gives individual people the freedom to make what they think is the best choice. But there are probably military implications to letting key infrastructure for social and economic organisation enter the control of US corporate giants.
Sam_Harris 7y ago
paywall
tsjq 7y ago
Share paywall bypass please !

41 points by r_singh 7y ago

https://www.morningstar.com/news/dow-jones/201912036105/us-tech-giants-bet-big-on-india-now-the-rules-are-changing https://www.morningstar.com/news/dow-jones/201912036105/us-t...

icsllaf 7y ago

Well it worked for China, they now have large corporations of similar (enough) caliber to their Western counterparts creating a lot more jobs than if Amazon or Google were allowed to run free. It's hard enough to compete against these established Tech Giants if they just come in and buy all the domestic companies. Not to mention the companies are starting with a massive head start.

vezycash 7y ago
> Well it worked for China What worked for China was acting a fool for a few decades. No rules, no regulations, nothing. Like a boa constrictor, staying motionless, allowing its prey to feel completely relaxed, then slowly but surely, tighten its grip until it's too late for the prey to escape. With its proximity to China, India could have had China's business.
- elfexec 7y ago
  Goodness, you can count on the weirdiest analogies on social media when it comes to china. But I guess it's par for the course in any trade war. What china did was nothing special. It wasn't revolutionary. It was what every industrial power today did - from the US in the 1800s to germany and japan and the asian tigers like south korea and taiwan did. Protectionism + foreign investment + manufacturing. The united states created the blueprint for success in the 1800s. All the smart nations have copied it and gotten successful. One of the first things the US did was to place tariffs to protect local industry. And for 100 years, protectionism was how the US rose from a relatively insignificant nation to the largest economy in the world. https://en.wikipedia.org/wiki/Protectionism_in_the_United_States https://en.wikipedia.org/wiki/Protectionism_in_the_United_St... Without the tariffs and protectionism, the US industries would have been owned by britain, france, etc. Or maybe it was like a boa constrictor. I don't know.
  - raverbashing 7y ago
    A lot of countries apply protectionist measures and have stagnating industries, protectionism is not enough to win the game.
  - true_religion 7y ago
    US tarrifs were originally intended to hurt Britain, as the US had recently rebelled against them. The tarrifs then increased during every war the US had with Britain. It’s no surprise that the US talks of trade wars, due to the way its history of tarrif is entangled with warfare, and dislike of the nations a tarrif is aimed against,
    - bernawil 7y ago
      It was quite literally a rallying point for Lincon and a reason for the civil war. Southerners wanted free trade to export tobacco and cotton. Northerners wanted tariffs and protection for their industries (both to make their factories more competitive against European manufactures as to get cheaper raw materials from American farmers).
  - NicoJuicy 7y ago
    He's addressing the issue that China joined the WTO, but is not following up on their promises since >20 years.
  - zzzzzzzza 7y ago
    you are wrong on foreign investment.. what you mean is domestic bank credit (see size of china's banking system)

DeonPenny 7y ago

I feel this isn't going to work well the second time. Automation right around the corner and India isn't willing to do the things china was allowed to do.

r_singh 7y ago
> India isn't willing to do the things china was allowed to do Care to a elaborate a bit please?
- pcr0 7y ago
  * Banning major search and social websites (Google, FB, Twitter) * Mandatory censorship of information (Google before leaving, Bing) * Foreign ownership limits (aka forced intellectual property transfers) * Capital outflow restrictions * Heavy subsidies allowing local firms to sell products at below cost (e.g. steel, bicycles)
elfexec 7y ago
> I feel this isn't going to work well the second time It worked a second time and half a dozen times more just the past 100 years. Japan, Germany, France, South Korea, Taiwan, etc all used protectionism to develop their local industries and companies, just like the US did in the 1800s and like China did most recently. Protectionism is required to protect young local underdeveloped industries and companies from wealthier foreign companies. Every major industrialize power used protectionism to get to where they are at today. https://en.wikipedia.org/wiki/Protectionism_in_the_United_States https://en.wikipedia.org/wiki/Protectionism_in_the_United_St... It isn't a secret. It's a well established fact by now. > Automation right around the corner and India isn't willing to do the things china was allowed to do. Rather than automation, it's india's politics and the mindset of a large portion of their elites. If you want to understand why india won't be successful, just look at the members of the british commonwealth. You'll see that india is still in it. If the political elite of india, for whatever reasons, still think being part of the british commonwealth is a good idea, it is obvious they are not going to do anything to truly improve india - especially things that might hurt their former colonial masters and the west's interests. You'll never see the US in the british commonwealth with the english queen as our head of state. I'm sure you'll never see china in it either. The elites in the US and china has some national pride needed to improve their nations. Also, india doesn't have the "political center/authority" with which to enact painful reforms internally to industrialize and to ward off external pressure from the west. The problem with India is that they lack the nationalistic aspects of Japan, Germany, France, South Korea, Taiwan, etc which allowed these nations to protect their local industries and develop. And any attempts towards a nationialism in india would led to some internal friction, but more importantly, the west will stoke divisions within the population and amongst the elites to destabilize india and get it back under control. India has a lot of potential but without a strong political center/authority, it can never fulfill its potential. And you only really need that strong political center/authority to provide internal stability and protect from destabilizing foreign interference for a decade or two to help your local industries and companies to develop and industrialize. Otherwise, your country will be bought up by capital rich companies and countries. Who knows if Modi is the man for the job. Given india's history, I won't be holding my breath. Also, in case you think protectionism doesn't exist in the US, China, Japan, Taiwan, South Korea, etc. look at what is happening with huwaei and the trade war. Look into the protectionist policies of every major industrial nation. It's strange how the wealthy nations love protectionism for themselves but want open markets for poor nations.

m0zg 7y ago

Nothing a billion dollars in bribes couldn't alleviate. Which is why India is "changing the rules" in the first place. Look at how much their civil servants make, and then look at their lifestyles, and it'll all be clear as day.

tsjq 7y ago
your comment nailed it.
- m0zg 7y ago
  Coming from a high-corruption country myself (Russia) the pattern is easily recognizable. It's also recognizable in the US, but people here seem to still believe, at least to some extent, that the politicians have something other than their own self interest in mind. A perilous belief, guaranteed to be proven wrong.
  - throw51319 7y ago
    What's the pattern? People enter "public service" and then become rich or their lifestyle inflates to imply that? At least in the US we can easily find out this information and vote on it.
    - JackRabbitSlim 7y ago
      Obama was the "Poorest" president in 50 years at only something like 4 Million to his name when he took office. It's also interesting to note he is from the most corrupt district in America. He is still a good example. Do you remember all the freely available information that showed Banks, Oil companies and massive corporations all spent considerably more on Clinton's 2016 campaign, yet somehow the media tells us Trump is "Big businesses" guy those companies worked hard to get into office? Easily verifiable to you right now. Are you going to go check my work? Opensecrets.org Cognitive dissonance is never so strong as when we are telling ourselves it's not cognitive dissonance.
    - m0zg 7y ago

sandGorgon 7y ago

One of the thoughts in India is that all these regulations can be read to favor just one gigantic entity - the Reliance Jio group..who is going to reap the benefits of this protectionism. But no other startup probably is (because all startup fundraises originate in the US)

lafka 7y ago
Care to elaborate? I keep hearing that along with similar things like "once Ambami/reliance adopts $xyz-tech everything will shift there". Due to its size Reliance is obviously in a position of power but do you see them lobbying for control in sectors outside telecom? Didn't read article due to paywall
jagannathtech 7y ago
invoking Reliance is just a convenient boogeyman. can see plenty of domestic and govt investment in local startups.

Mbaqanga 7y ago

Wow! Amazon and Walmart have captured 80% of online retail sales in India. Modern colonialism.

netcan 7y ago

I expect we're going to see more of this over the next 5-10 years, especially in the digital economy. In the 70s, where a country was protectionist about cars, that probably meant fewer, worse and more expensive cars. Same for steel, dishwashing soap, telephones and shoes. Trabants instead of Toyotas, and less of them. Protectionism came with a high efficiency cost, and that meant poverty. Today's digital economy can be very different. The relationship between incoming revenue and outgoing expenses is often arbitrary and that means efficiency is squishy. If Toyota had to operate on half it's current budget, Toyota would produce half as many cars. If Facebook had to operate on half (or less) of it's current budget, they "produce" the same social media (or advertising) "product." The cost of protectionism in this environment is totally different to steel, cars and ikea furniture. If Facebook and twitter cease to exist, the "supply" of social media experienced by the public isn't a problem... at least not for long. An ecommerce business is not a social media business, but it is further along that spectrum. So is a smartphone business, financial services business, online ad platform and many of these "digital monopoly" sectors. The protectionist proposition is just more attractive, with the big, immediate, obvious costs removed. Protectionism has always been popular, politically. It's nationalistic, and that's popular with the public. It puts a lot of policy making power in politicians hands and that's popular with politicians. Business tends to like it, domestically. Opening trade was, imo, and contrary to popular opinion, a forced hand. It was never ideological. Ideologically, it's unpopular. The "stable state" is protectionism. Protectionism was just very costly in the 70s, 80s & 90s... so it died down some.

rat9988 7y ago
>and that meant poverty. It doesn't mean that at all.
fsloth 7y ago
Asian economies such as Korea grew precisely due to government enforced industrialization programs. Protectionism is excellent for an economy's 'bootstrap' phase where you wish to create some sort of viable industry where none existed before. To make this long term tenable, you have to then slowly pull back and return to a more market based approach.

roenxi 7y ago

Reflect for a moment on the system we currently use for big corporations which has a lineage roughly dating back to the East India Company in 1600. The reason we still use them is because they proved so devastatingly effective at draining wealth from exotic foreign lands that nobody could do without them. The free market is best for maintaining general prosperity; it gives individual people the freedom to make what they think is the best choice. But there are probably military implications to letting key infrastructure for social and economic organisation enter the control of US corporate giants.

Sam_Harris 7y ago

paywall

tsjq 7y ago

Share paywall bypass please !