Narendra Modi’s ‘Make in India’ doesn’t have incentive for local companies as there are for internationals: Kanika Dewan

Interview with Dewan, founder of Ka Design Atelier and president of Bramco Group of companies.

By Raif KareratKanika-Dewan

WASHINGTON, DC: As founder of the New York-based Ka Design Atelier and president of the Bahrain-based Bramco Group of companies, Kanika Dewan has completed large-scale projects for numerous high profile clients.

Aside from constructing the two largest yachts in the world for the Sultan of Oman and Roman Abramovich (with a third, even larger vessel currently in the works), Dewan also designed the Indira Gandhi International Airport’s newest multi-billion dollar terminal, which is the largest public building constructed in India since the nation achieved independence in 1947.

Born in Kolkata, Dewan moved to Bahrain with her family when she was two months old. She spent her childhood there, attending an American school but studying the British system. With the outbreak of the first Gulf War Kanika’s British teachers fled the Middle East, prompting her family to enroll her in a boarding school in England.

She then returned to the United States, and quickly launched a banking career with Citigroup. She recalled that during her interview, she stated she wanted to eventually pursue “entrepreneurial endeavors,” and she soon launched her own business — Natural Stone Depot. Within a few years she had expanded her sphere of influence enough to become president of her family’s business, Bramco, as well as found KA Design Atelier.

However, after spending so much time abroad, Dewan knew she needed to contribute back to the country she came from, and moved her base of operations back to India.

“I wanted to demonstrate that India was no longer a developing country, but an evolved one,” Dewan told The American Bazaar in a Skype interview, adding, “And the Delhi airport was the perfect patriotic move.”

In the interview, Dewan waxed lyrical about foreign direct investment in India, her recent projects, gender and cultural divides, design inspiration, and much more:

As someone with strong ties to India but has lived abroad for much of your life, what is your perspective on Make in India promoted by prime minister Narendra Modi and its hard push for international investment?

That’s an interesting question because it’s something that I have a lot of opinions about. While I think it’s a great opportunity for India to grow and set itself on a competitive stage in terms of India being considered part of the developed world versus the developing world which it has been labeled as until recently. At the same time I think this push has to be done in a very careful and balanced way, because India also needs to be self-sufficient.

Now, the Make in India program has gotten 100 percent approved [foreign direct investment] for tourism, hotels, and construction projects in those areas. The international companies will bring a lot of investment and create jobs in the process, but what is being ignored is the fact that we don’t know how long term this process is going to be.

History tends to repeat itself, and a lot of companies in the past, such as Ikea and what have you, have been trying to come into India for a while, and though they talk about the red tape — which exists and won’t go away overnight — I think it’s the corruption side of things that really stops them from coming in.

The corruption and the red tape may not go away overnight, but I’m not saying this is a doomsday scenario. I’m saying the approach needs to be balanced. It’s not as rosy a picture as everyone seems to see it as far as India is concerned. I think the benefit is more for international counterparts versus India itself in all of these scenarios. More because I don’t think India’s government structure is completely ready for that overseas investment. And I don’t the cultural structure and social structure are ready for it because of the employment scenario.

From my experience, the level of education in the skilled workforce is limited. That’s not because of the capabilities of Indians, but more because the lack of infrastructure in education and the corporate structure that has existed for years.

Let’s say a company, like Ikea, comes in, they open their first store, and after that they say this is too difficult for a number of reasons and that it’s not efficient to operate in India. They then say they aren’t going to expand to the extent they thought they would. So what happens to the local workforce that they absorbed? I think what’s going to end up happening is there’s going to be a lot of attrition. And they end up being short-term employees, which only lends itself to short-term employment growth in the country.

That’s why I say the approach needs to be balanced — there needs to be an equal push for Indians to make in India as well as provide the competitiveness of international companies to come in and provide that competition so inefficiencies are reduced.

I feel like that balance has not been achieved, and I’m afraid of companies like Wal-Mart coming and treating the country as a dumping ground. That’s where my criticism of Make in India lies — there isn’t enough of an incentive for local companies as there are for internationals. It’s gone the other way; the balance has tipped.

Is India’s infrastructure ready for the grand stage and the demands that will be made of it in the upcoming years?

Interestingly enough, I do think the physical infrastructure — as far as roadways, airports, and transport systems — has geared up a lot. Contrary to what the rest of the world may think. Spending a lot of time here and working on infrastructure projects myself, I kind of know the ins and outs of the high standards with which these are being developed. And the speed at which they’re being developed, along with the focus the government is giving to them, especially with the PPP (Private-Public Partnership) initiative.

It’s one of the first models that existed really on a global level that India has tried out on the airport side of things. And now they are expanding that to other areas. Where you have these private-public partnerships you improve efficiency because you’re reducing the chances of red tape and corruption which used to exist in the past and improving the chances to fight them in a much better way.

In fact, if you look at the airports now, whenever I travel back home to the U.S., or the Middle East — I kind of feel like home is all over the place — I actually marvel at how backward the developed world as they call it is becoming as far as infrastructure projects are concerned compared to places like India and the Middle East. In that way I would say America as well as the U.K. is really falling behind on the infrastructure side of things.

As far as power is concerned, yes there could be issues, but there is a lot going into development of clean power. Solar has been a big focus. I think as the Make in India program grows and as companies that are not indigenous start expanding I think the rest of the world will be able to see the remarkable change.

At the services level, legal infrastructure is what’s the issue. You have problems in terms of enforcing legalities and systems which can reduce efficiency substantially. That’s the type of infrastructure I feel is not ready for the world stage. The structure of the government is not at par and neither are the rules — there are lots of loopholes that will hamper growth.

You’ve mentioned in the past that you refuse bribes and do not indulge corruption. How has that affected your business and what did the immediate aftermath entail?

That’s a very good question. Interestingly, there’s pros and cons to this. Overall, how does it affect business? It limits growth, I’ll be very honest about that. If you make a value system-based decision to not go for any corrupt projects then you’re limiting your growth. You may not yield to the corruption, but you also might not get paid for sometimes up to 30 percent of your project. So that not only hurts your expansion, it hurts your existence.

The bribe that was in question was simply Rs. 30,000, but it caused us not get paid 10 percent of $30-40 million for three years. I grew up with a different value system. I think the fact that I didn’t grow up in India has a lot to do with it. It’s hard to stomach — it doesn’t sit with me.

So there’s a positive and a negative. The positive goes even further — with Bombay international airport no one asked us for one penny. No one dared ask us. We walked into the bid meeting and they said, we know you’re against corruption already. The disadvantage was that because they know it, there’s a subliminal aspect which means we’ve gotten delayed on certain certification for the airport even though it’s in full operation.

In your experience, how do business practices vary most between India, the U.S., and the Middle East?

I would break that into individual areas. One is internal and the other is external, which means you’re interacting with an outside party. I think the one of the major differences is that business meetings in India end up being quite transparent at the end of the day, which I think might be surprising to a lot of people, because a lot of people think India is based more on beating around the bush with business relationships and networking. You would think the States would be more transparent because there’s a lot more emphasis on documentation, but I find India has definitely acquired a very similar practice. It’s very legally oriented, documentation is very clear. I find that the contracts [in India] are several books larger than the ones we see in the States. Even though the legal framework doesn’t exist, there’s enough paperwork to basically set the expectations. Any disputes are more related to face-to-face negotiations because no one’s really wanting to go to court. The maximum you would do is arbitration, you don’t usually reach that stage. Interestingly enough, there’s much more emphasis on the written aspect and it’s much more detailed than the States, but there is more of a legal framework for legal action in the States.

The Middle East is still very much a handshake society. When despite the globalization that’s taking place in Dubai, in Bahrain, and Oman, I find when you go in for meetings I hesitate on talking about the contract or even using the word often right until the end. Whereas in India, a manager has to be involved in every stage of a contract, whether it’s at the beginning, the middle, or the end.

Here’s where the internal part comes in. Cultural divides come into play with the different states in India. I’ve noticed it within a project, even. For example, at the Delhi airport, especially — that was one of my first forays into India — which is why I talk about a lot of my learning points based around that project. We had a diverse workforce, even as far as the managers were concerned. Some of my design and construction managers were from the Philippines and then from India I had people from the south, people from Maharashtra, and people from Delhi. What we found was despite their roles we would find them congregating within the work day in a certain area. People from each state would form fiefdoms and this was at the managerial level as well as the skilled labor level. When you would have issues, whether they were HR related or productivity related, the outcome would depend on where they were from.

Then of course comes the class divide. The class divide was very prevalent. There were Indian managers who had grown up in India who never wanted to speak to the workforce — they just didn’t speak to them. I would often find myself having to fulfill that role, which was why I was on-site so much. You can read about me having these all-nighters on-site because I knew 8 months was not enough time — even though we had numerous training sessions — to explain that they had to engage.

On another level, at the skilled labor level, you would find people who would subscribe to a certain caste system, quote-unquote, in order to say, “Oh, I’m not going to do the cleaning part of the task, I’m only going to do the lifting part.” When you’d ask why, they’d say it’s because they weren’t allowed to do that since it was a lower level job. And some would blatantly tell you that while some would shy away. We literally formulated an entire HR system to understand it and formulate teambuilding going forward.

As one of the few women who are at the top echelons of design and build work, you’re uniquely poised to comment on the status of women in India. What needs to transpire in India in order to facilitate a greater push for gender equality both in the workplace and sociologically?

In the workplace, I think as far as where women stand it varies by industry. I think India has come a long way as far as the retail section is concerned. You see a lot of women at higher-level posts as far as consumer-goods retail is concerned and I think that’s more because of the nature of the industry. Where they feel there’s purchasing power in anything from fashion to food.

Women may still be taking more marketing related or consumer-retail oriented high-level positions, but I think that’s paved the way for high level and middle level women executives to set the stage in India. I find in that segment women have made inroads. There’s always a glass ceiling but in a way I think they’re raising it.

When you look at the industry that I’m in — construction — I think regardless of India, even in the States, design and construction has always been very male dominated. And it still is. I don’t think it’s specific to India, but yes, I do feel like I start at ground zero in every meeting I walk into, unless it’s a client who knows me, as opposed to knowing of me — there’s a difference, mainly that they haven’t worked with me before.

Even though they’ve invited you, they will always try, at least at the beginning, to direct questions to my staff, which is male dominated, because many women don’t want to enter the design and build field because they don’t feel comfortable in it. It’s sort of a vicious cycle, because my team is mostly male, all of the technical and legal questions are turned to them.

During certain negotiations for the Bombay airport, I was told in the middle of a meeting, “Stop being like [politician] Mamata Banerjee, you’re negotiating too hard.” So I asked them what that meant, and they told me I was being a “very aggressive woman.” I don’t think you want to be Mamata Banerjee, because there’s a negative connotation to her aggressiveness in India. And there was so much heat in the moment I didn’t even realize until I walked out of the meeting that it was a gender biased comment being made at me, because I’ve become so used to it.

I think a lot of women can’t take it. I’ve had assistants who are women literally burst out into tears after two weeks because of the roughness of the industry. I think it’s public policy changes that need to be made for women to be able to make more inroads. Also, the HR system in India is very weak and that’s where The States really wins. India needs new HR structures to encourage women to try out new jobs and not shy away from some of these difficult spaces which they might need. It’s happening in the U.S. with STEM fields and I think it needs to happen in India as well.

I’m going to switch gears on you a bit now: where do you glean your design inspiration from? Which building designs do you most admire?

As far as my design inspiration goes I glean it more from nature and my surroundings. Sometimes I’ll just sit there — and this often happens on my vacation time — and that’s when I’m most creative. I’ll just sit there looking at a tree and I’ll be thinking about it in an artistic way. I’ll think, as far as the aesthetics go, that shape is very interesting, or that branch, or the veins within the tree. How can I turn that into a component of what I’m making? Every shape we could possibly imagine exists within nature. We glean our design sense from that. There’s nothing completely new, it’s all embedded within nature itself. So that’s where most of my inspiration is gleaned from. As far as the structures I most admire, I think that ends up changing on a daily basis but at the moment I am very impressed by the model of the Guggenheim that’s coming up in Abu Dhabi. The reason I say the building flavor of the month changes is because there’s always something new on the horizon, and I believe in innovation.

Which city in India apart from Mumbai could be another Manhattan with a vertical layout?

I think that Bangalore is probably a sister city as far as that’s concerned. I know that it’s somewhat unstructured in Bombay, but I find that even though there’s so much chaos, architecturally there is some sort of system to it.

Can you tell me about your plans to build the biggest yacht in the world?

The first yacht I ever worked on was the largest one in the world, which was the Sultan of Oman’s yacht. We usually have to keep that pretty confidential but now that it’s built and sailing we can talk about it. Then we went on to [Roman] Abramovich’s yacht, which was even larger than the Sultan’s yacht. Now we’re on another yacht that I can’t really talk about. They have codenames, but even if I told you the codename it wouldn’t make sense. What ends up becoming the largest yacht in the world literally changes in months. We find in the luxury yacht industry it’s all about competitive luxury.

Should the U.S. Federal Reserve increase rates?

I actually do not think they should increase rates based on hand-on experience as far as the tri-state area is concerned. Since my journey began in the States I’ve seen a significant change in the economic arenas as far as design and construction is concerned. I know there’s data coming out that’s very positive about the economy, but if you segment the construction industry, even in the tri-state area, there are a lot of slums that still exist. And real estate is obviously a lacking indicator but I think that’s one of the main areas where interest rates have a major impact. In my opinion I don’t think they should raise rates even though the economic data shows significant improvement. They might just want to curb any unnecessary heating up of the economy and have an artificial bubble.

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