It's MORNING EDITION from NPR News. I'm Steve Inskeep.


And I'm Renee Montagne.

Treasury Secretary Timothy Geithner is in India. He met yesterday with the prime minister, and today, Geithner is India's financial capital Mumbai, meeting with chief executives and entrepreneurs. Even though India has long been hailed as the next big thing and it's one of the world's fastest growing economies, many investors have been disappointed with opportunities there.

To talk about this, we called up the editor of the Indian newspaper, the Business Standard; Sanjaya Baru is in Delhi.

Glad to have you back on the program.

Mr. SANJAYA BARU (Editor, Business Standard): Oh, nice to hear you, Renee.

MONTAGNE: You know, let's begin with that. For years U.S. executives have been complaining about a lack of openness in India's economy and saying it's limiting what they can do there. What do you think? Are India's rules a turnoff for foreign investors?

Mr. BARU: Well, I dont think that's fair, actually. First of all, that history, I mean for the last 15 or more, we have been as open as any other modern economy. But they're a couple sectors in which we are not yet open. One of them happens to be banking, the second is retail. And after the global financial crisis, I think most people around the world are giving India a lot of brownie points for not having moved too fast in opening up on the banking sector.

We would have gone under, like many countries around the world, if we had been more open than we now are.

MONTAGNE: Well, you know, many of America's most famous brands are well established in India - McDonald's, General Electric, but there are other big companies that have...

Mr. BARU: Also Renee, Citibank. Citibank is in India. Merrill Lynch used to be here until it closed up. So there are, in fact, American financial institutions functioning in India.

MONTAGNE: You know, it seems like India is always being compared to China, with China being pointed to as the place to do business. I mean, emerging middle class, the 10 percent growth rate, hundreds of millions of potential consumers. Why do you think that though, because India itself is so huge and has a middle class and has a high growth rate?

Mr. BARU: First of all, you know, India is a free market democracy. And like in all democracies, we have our trade unions who make it difficult for investors. The Chinese dont have any trade unions so American companies find it easier to invest in China because they dont have to worry about trade union problems.

But the second reason I think, is that we have a private sector. India has Indian private companies like your General Motors, like your Ford, like your Rockefeller. China is not a democracy. Chinese government doesnt have to worry about local businessmen. The government in Beijing decides; everybody falls in line. So I think that's a fundamental difference between the way in which you would do business in India and the way in which you would have to do business in China.

But I think having said that, I have seen studies done at the Harvard School of Business which show that profitability in India actually is higher for American companies. You know, they make more money for a given amount of investment in India than they do in China. So, I think we have been very bad in getting this message across to more American companies.

MONTAGNE: Well, you know, all in all, observing from your position there as editor of the Business Standard, what do you think is the most important thing that would come out of this visit?

Mr. BARU: Well, I think we are certainly looking for more U.S. investment in India. There was a momentum to the India-U.S. relationship during the Bush presidency and that momentum had slowed down in the first year of the Obama presidency. And I think here in India we are waiting for the Obama administration to catch up and move ahead. And I'm really hoping that Mr. Geithner's visit will restore the momentum to the bilateral relationship.

MONTAGNE: Thank you very much for joining us again.

Mr. BARU: Thank you, Renee.

MONTAGNE: Sanjaya Baru is editor of the Business Standard newspaper. He's also a former spokesman for India's prime minister.

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