Pepsico CEO calls out India's poor investment climate
According to Pepsico Chairman and CEO Indra Nooyi, India had gone from a 'must-invest' market to a 'must-deal-with' country. This is the ambivalence many overseas investors feel for India, as it had become tarnished by allegations of rampant corruption, retrospective changes in legal processes, stalled policy reforms and its current economic slump.
Other factors facing the investor in India include uncertainties in tax policy, poor infrastructure and lack of clarity.
According to the Indian born Nooyi, "Must-invest means it's a destination and GDP is growing. 'Must deal with' means there are infrastructure issues, the taxation policy is not clear or transparent. So people are saying, 'Do I have to deal with India?'."
Nooyi had held the top position at Pepsico for the last seven years and still has faith that the country has one of the strongest markets to date. Just recently, Pepsico announced an investment worth USD5.5 billion in India up until 2020.
She also met with Finance Minister P Chidambaram last Monday. She added, "There have been issues in India. No questions about it... Our hope is that the system will right itself."
When asked about about the elections and if the leader should have secular credentials, she responded by saying, "I am not into the political aspect of India, but I just think India has beeen a secular democracy forever and all that we want as investors in India is stability in the country. How that stability comes, the Indian voters will decide."
She reiterated that Pepsico had always been in contact with government officials, be it the prime minister, finance minister or the Planning Commission. The discussions would range from issues brought to their attention by the beverage and snack maker. Nooyi recommended that India needs to upgrade the infrastructure in order to attract investment aside from being a unified market.
She added, "You have to fix the whole system. Foreign investment can create the push, but the country has to create the pull and if the country does not give the pull, you can get a lot of investments."