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When Sunil Bharti Mittal launched his mobile-phone business in 1992, he also helped transform India from a poor rural nation to a global heavyweight. He also made himself into an international celebrity and one of the world's wealthiest people, with a personal fortune estimated at $7.9 billion. At 51, he is now branching out professionally, collaborating with Wal-Mart to open retail stores in India, and investing in education in villages (the Bharti Foundation runs 175 village schools). He plans to establish a soccer academy to help Indians compete in the World Cup, and works with the Carnegie Endowment for International Peace on climate change. In the aftermath of the Congress party's recent landslide victory in India's elections, Mittal spoke with NEWSWEEK's Vibhuti Patel in New York about the new government's challenges, what it expects from the West and its concerns about its neighbors. Excerpts:
What was the purpose of your March meeting with Tim Geithner and Larry Summers?
As the retiring president of the Confederation of Indian Industry, I led an industrialists' delegation to the White House before the new administration settled down and formed their opinion about trade with India. Our agenda was, India and the United States need to stay engaged. Political rhetoric about protectionism and voices against outsourcing to India weaken our hand in fighting those who oppose globalization in India. The response of [Treasury Secretary] Tim Geithner and [White House economic adviser] Larry Summers was very positive. We also met [Ambassador] Richard Holbrooke to discuss political issues and [president] Bob Zoellick of the World Bank.
What does India need from the United States?
We feel the United States is still not investing enough in India. India is a continent of consumers. IBM and Cisco are putting a major stake in India, but America needs to do more. We need foreign direct investment through joint ventures. Thanks to our open-door policy, it is possible to invest in most Indian companies. India's engineering talents, its skills, need to be used not just for the back office but for biotech and higher-end information technology. The rhetoric about the H1B visas and outsourcing is worrying. U.S. protectionism will have a huge negative impact in India, and it will pose a risk to global economic recovery. Investing in India and outsourcing some key jobs there is good for America. India's consumer class will lead to growth, so India is an important economic destination. And India is buying big-ticket items from America: Boeing airplanes, nuclear reactors, earthmoving equipment and high technology. Our countries have a special strategic partnership. Geithner and Summers reassured us that America will not let globalization suffer, that this partnership will continue.
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Prime Minister Manmohan Singh's liberalization policies empowered businesses, so are you celebrating the Congress party's electoral victory?
When Dr. Singh became finance minister in 1992, we were tiny minnows in our little business. What he did was let young entrepreneurs like us move ahead at a rapid clip. The turning point for the next generation of entrepreneurs breaking through the stranglehold of large traditional business houses goes back to that first phase of economic reforms. The last five years have been good for India's economy. The Congress victory establishes our stability. Now the P.M. can initiate policies that his coalition partners opposed. He can move ahead on economic reforms—not one-way traffic for the elite, industry and corporations, but inclusive growth that his government has long talked about and Rahul Gandhi [a member of Parliament, and son of Congress party president Sonia Gandhi and the late prime minister Rajiv Gandhi] promised in this election.
Do you think it will happen? Three hundred million Indians live in poverty.
This government will have to push for major social programs to ensure equitable distribution of wealth, education, agricultural reforms and infrastructure across rural and urban India. The economy will be driven by business measures in manufacturing services, agriculture and food processing. At the end of the day, a great economy is driven by businesses. That alone can ensure inclusive growth. Besides, India's youth is aspirational: they want a good job, a car, prosperity for the family. And they are a majority—we have 630 million working people; 50 percent of our population is under 20. They vote, so the government has to offer them a better life.
Businesses have long pressured the government for infrastructure and power.
And it has responded: the last plan had $495 billion earmarked for hard infrastructure. The next plan is expected to have $1 trillion. If the government spends $1.5 trillion in 10 years, we'll have fantastic infrastructure. As for education, we can't find a better leader than Dr. Singh. An academic at heart, he's focused on village schools, secondary and higher education. He'll push the skill-building agenda ahead with a forward-looking education leader. The head of the National Knowledge Commission has already produced a road map.
But India's economy has slowed down this year.
It was inevitable that India should suffer to some extent in a global meltdown, we are coupled to world financial markets. But we haven't been that badly hit. We still grew at under 7 percent last year; for a $1 trillion economy to grow at 6 percent is not bad. India did not lose growth, it just lost momentum. We have put $30 billion into the recovery, of which half will go to poor farmers in waiver of loans, a quarter into small-scale industries, the rest in social programs—and the dollar stands tall in India. The economy is reviving; we're already seeing signs of early recovery in cement and steel; telecom is continuing to do well. I think we'll soon come out of this crisis. The Congress victory has already made the stock market shoot up. Of course, India's stock market suffered: it had to come down; it was unreal. Some correction was necessary. Real estate in India was crazy, too—Bombay prices were as high as Tokyo's. That crashed; there had to be a reality check.
You are working on the not-for-profit climate-change group led by Tony Blair. How is India going to deal with its ecological problems?
We will work on that both globally, and specifically in India. Dr. Singh is very aware of this problem. I think India is being a responsible global citizen. We need energy to drive our economy. The United States' per capita consumption is 28 barrels of gasoline per year; China's is two; ours is half a barrel. We are a large nation, but we will participate as a responsible global player. Industry and manufacturing services will start working on a nonpolluting basis, but there are hundreds of millions of homes in our villages which use coal for cooking, and that's going to be hard to change. However, there is a heightened consciousness in India about this now. We have huge deposits of coal; we will have to capture the carbons and not release them in the air. These technologies have to be provided to India in a tried, tested, safe manner.
Is that a business you might get into?
Water-and climate-related issues are very exciting. I like transformational areas. But for the moment we've got a lot going on. Climate change as a participant of industry does interest me. I'd like to spend time on that. I'm trying to understand it more, to have a better appreciation of the issues which are pressing.
Would you comment on the current situation in Pakistan?
Pakistan's situation is hugely alarming for us. They are trapped in their anti-India mindset, unaware of the new reality that Pakistan does not matter for India. It is too small in terms of trade and economy but a big issue for us if it's torn apart. We want a stable Pakistan—and we want nothing to do with it. We're living in a very difficult environment. India is surrounded on all sides by strife and struggle: Nepal, Burma, Bangladesh, Sri Lanka and Pakistan—all our neighbors are troubled. India has to play a big role in the region. With this huge electoral mandate, the new government should be able to stabilize the South Asian region now.
And China?
China's progress can't be undermined, but it is India's turn now. India is a rising power; we will be No. 3 in the next decade: it will be China, U.S., India—in that order.
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