The Hindu : Front Page : Gurgaon incident will not impact FDI inflows: MNC survey

Online edition of India's National Newspaper
Monday, Aug 01, 2005

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Gurgaon incident will not impact FDI inflows: MNC survey

Special Correspondent

NEW DELHI: An overwhelming 80 per cent of the CEOs of the multinational companies, polled by the ASSOCHAM Business Barometer (ABB), say that the Gurgaon incident involving labour clashes at the Honda facility will not have any impact on the confidence of foreign investors in India.

Most of them including a vast majority from the Japanese firms based in India responded to the ABB poll saying that Gurgaon-like incidents are not peculiar to India and such skirmishes can happen anywhere in the world including the most advanced industrial economies and that they do happen.

As many as 73 per cent of the 150 CEOs said the incident was blown out of proportion and was given extra mileage.

The overexposure to the scuffle between the police and the labour in the Delhi suburb could have damaged the country's image as an investment destination but for the Government's intervention at the highest level, they said. "The unfortunate Gurgaon incident was an isolated case and cannot be seen as a pattern as is clear from the informed perception of the MNCs including those from Japan, some of whom have been operating in India for the past 50 years," said ASSOCHAM president Mahendra K. Sanghi.

Although over 50 per cent of the corporate heads believed that India has its institutional mechanism in place, as demonstrated in the past six decades, at times events overtake the system. They underlined the need for strengthening the mechanism at the operational level.

"The institutional mechanism to tackle Gurgaon-like situations has been more on paper than showing the real impact at the operational level." This was the common refrain in the nationwide ABB poll that was conducted three days after the unpleasant incident.

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