India

Recently I had the opportunity to visit Mumbai, India. It was my first trip there, and it was a real eye-opener.

The trip came up as a result of some consulting work I’m doing with a client who is looking to expand its operations there. It was a bit of a whirlwind – about 30 hours of travel each way for a total of about 72 hours on the ground. But what I saw left an impression that will stay with me a long time.

Arriving at Mumbai airport at about 1:30 am, it looked like any other airport in a lesser-developed nation. Kinda crowded, disorganized, a little run down. The first real shocker though was stepping outside. Even at that hour, the commotion was overwhelming – hundreds of little “autoricks” (three-wheeled, motorcycle-powered covered rickshaws) jostled for position while their drivers called out for passengers. And the pollution! Thick clouds of exhaust fumes, mixed with the smoke from household heating and cooking fires (that I later learned were fueled in part by dried cow dung), had my asthma in full flare in no time. Toto, we definitely weren’t in Kansas anymore.

Fortunately it was a short (albeit chaotic, more later) drive to the Hyatt Regency, as modern and Westernized a hotel as you’d find anywhere. Check in was a bit of a hassle, but once I was in my room it could have been a hotel in any major US or European city.

The next morning we headed out for our client’s headquarters about noon – many Indian businesses keep later-than-normal business hours to accommodate interaction with European and US operations. The drive to the office was another new experience. First off, not surprisingly they drive on the left (British colonial heritage I suppose). Well, sort of on the left – the reality is that lane markings, where they exist, are taken as a kind of a suggestion, not meant to be taken too seriously. Along a downtown thoroughfare that in the US would be two lanes in each direction, you might see autoricks as many as five across in each direction, constantly maneuvering for position. Not only that, but they are competing with pedestrians walking alongside and sometimes up the middle of the road. And these pedestrians might be accompanied by goats, cows, or even elephants.

The sides of the streets are lined with storefronts – just concrete block shacks, really, opening out onto the street. One might be selling cigarettes, the next groceries, the next might be an auto repair. People are milling around everywhere, doing business, moving from place to place. And behind this row of storefronts is an entire community, living in shacks with corrugated steel roofs. Children, elderly people, dogs, all huddled together in the most densely populated living conditions I’ve ever seen. No plumbing, and mostly no electricity, except where the more industrious types have hooked up to power in nearby buildings, stringing cables precariously over the rooftops of this shanty town. The conditions are, by any western standard, truly terrible.

And yet, the people seem to be very well adapted. They just go about their business, be it running the bicycle repair shop, or hauling wood for the fires, or fetching water, or laying bricks. In some respects I guess I shouldn’t have been surprised by this – it’s just what life is like there for them, I suppose. But I found the spirit, industriousness, and resiliency of the people really inspiring.

Once we got to our clients’ offices, it was pretty much like any other business environment. Many a little more densely packed than a US office, maybe the building exteriors were a little dirtier owing to the pollution. But a desk is a desk, a computer is a computer, and people were getting down to the business of business. The office workforce in India is made up of generally very well educated people, working for a small fraction of US wages. As an example, an entry level job requiring a basic college education, that might start at $45,000 in the US, pays about $5,000 per year in India. It doesn’t take much figuring to see why the economy over there is booming. Especially since just about everyone speaks English, making it easy for them to work for US and British multinationals.

As the telecommunications infrastructure in India continues to improve, and prices continue to drop, just about any kind of office work can be done just as effectively over there as over here. We visited a large subsidiary of an investment bank, where professionals with advanced degrees were doing equity research, foreign exchange settlement, and derivatives pricing – again, all at a fraction of US wage rates. You wonder how long it can continue, before the price of labor gets bid up to the point that the arbitrage opportunities go away. But a lot of people are betting that it’ll last for a while – bets that take the form of dozens of new office towers, rising like stacks of chips in a casino. India’s wager on the global economy is paying off big-time, and it looks like their run will continue for quite some time.