Foreign investors are rediscovering that the road to riches in India runs through powerful local partners
The dilemma lives on. Last year Ford announced that it would become a minority shareholder in a carmaking joint venture with Mahindra, a large industrial group. Firms that have resisted such tie-ups can struggle. General Motors threw in the towel in 2019, as part of a shift to focus on its American and European operations. Amazon, which has ploughed $6.5bn into its Indian operations, has yet to make money in the country. Walmart’s $16bn purchase in 2018 of a controlling stake in Flipkart, an Indian e-commerce firm, has been similarly hard work. As foreign entities, Amazon and Walmart must contend with a tax on transactions, limits on the size of their inventory and on sales of their own brands, as well as frequent visits from competition authorities.
A popular alternative is to operate a listed Indian subsidiary, like Suzuki or a number of big Western corporations, from consumer-goods titans (Unilever, ColgatePalmolive and Nestlé) to industrial giants (Bosch and Siemens). Even that does not guarantee peace of mind, however. After a protracted legal battle with India’s taxman, first over a capital-gains levy related to its $11bn purchase of an Indian mobile business, then over allegedly unpaid fees related to its spectrum rights, Vodafone Idea, India’s third-largest wireless carrier, was ordered by a court to pay $6.8bn in back taxes and fees. In an epic tale of value-destruction, the company now teeters on the brink of bankruptcy, weighing on Vodafone Group, its British corporate parent.
一个常见的替代策略是在印度运营上市子公司，例如日本铃木公司或一些西方大企业——从联合利华、高露洁棕榄和雀巢等消费品巨头，到博世和西门子等工业巨头。但即便这样也不是就高枕无忧了。印度第三大无线运营商“沃达丰Idea”（Vodafone Idea）经历了与印度税务机构旷日持久的官司——先是关于它以110亿美元收购一家印度移动通信公司的资本利得税，然后又是未支付频谱使用费的指控，最后被法院下令补缴68亿美元的税款和费用。经历了如此漫长而悲壮的价值毁灭故事，该公司现在濒临破产边缘，也拖累了英国母公司沃达丰集团（Vodafone Group）。
The contrast with Jio is stark. The Indian champion has managed to snap up mobile spectrum at low prices and extend promotional rates. Given Facebook’s fruitless efforts to gain regulatory approval for a payment feature in its ubiquitous WhatsApp messaging service, the social network may have quite reasonably decided that teaming up with Jio is a better bet.
Time will tell if Western investors’ latest dalliances of convenience pay off. The lot of Reliance businesses’ partners has not always been easy. India’s securities regulator has ordered Reliance Industries to compensate minority shareholders in Reliance Petroleum, an affiliate for a series of transactions between the two entities that, the regulator says, disadvantaged the outside investors. The case is pending. Reliance Industries denies any wrongdoing.
As good as Jio looks on paper, it must still show it has what it takes to run a modern tech behemoth. Ventures such as Jiomart (e-commerce) and JioMoney (finance) have yet to live up to the hype. Until they do, Jio’s nationality may remain its chief attraction.■