Chamber of Commerce

Where businesses and governments meet!

Chamber of Commerce, has a rich history in the West, with its origin stretching all the way into 16th Century France. The idea grew from the need for pushing collective interest of business community. Today chambers are almost present in every city in the west, attempting to facilitate conversations with local governments.

Recently I came across such a mature chamber doing business in America, that was Swedish American Chamber of Commerce, with its presence across different cities in America. This made me look further to see where do Indian American Chamber of Commerce stand.

Interestingly some volunteers working in a specific regions as registered company, have region specific activity, the scale of operations still lack the efficiency with other foreign chambers, who have established themselves over several decades.

Though recently, I got myself involved with my local Chandler Chamber, to get a perspective on events and potential for networking. Chandler Chamber has been instrumental in shaping the Chandler City, which is a hub for semi-conductor manufacturing with companies such as Intel, Micro-scale, Free-scale having their early roots here.

Chambers facilitate understanding of the cities regarding economic conditions helping nudge policies that help businesses. Interestingly Chandler Chamber have even developed curriculum, for Leadership development.

This all makes me wonder, can the knowledge of established mature chamber, help in maturity of chambers in rural India. Can this relationship be strengthened further with investments and commerce.

For India does serve a destination where long term capital investments in Rural India are needed, especially if we wish to consider the desire of Indian Government to connect every household with Broadband by 2020.

The push of Digital India, definitely resonates highly with push in the Arizona's east valley region, for Knowledge Economy. The state sponsored, Arizona State University, has been pursuing programs with underlying themes of Innovation, and cultivating Entrepreneurs.

With a significant number of Indian students attending ASU, with bank loans from India at 14% gives rise to ample of opportunity to get these loans refinanced. While the students can also be given meaningful employment, up to 20 hours a week, in order to cultivate knowledge, through network of participating students from rural India.

Can chamber play a role in cultivating new generations of entrepreneurs, who can collaborate in global network for driving investments in developing transportation infrastructure, living infrastructure, agricultural infrastructure.

For the potential in globalized world is enormous, can GIFT city get a sip of this cool aid. In order to do so, pioneers are needed to develop a successful collaborative commerce models. For this can truly lay ground for a vision of connecting India with the World and vice versa.

Muni - Bonds

Raising capital for funding City infrastructure

Muni-Bonds short for Municipal Bonds, they are financial instruments used for raising capital from financial markets to fund infrastructure projects for cities. Muni-Bond markets is quite mature in the west, especially America. 

On the other hand India has not witnessed significant maturity in its financial markets. In order to fund infrastructures of cities, such as Metro Rail project in big metropolitan, the city government would take a loan from institutions such as World Bank. 

Alternative approach to fund this project, could be that the city issue its own Bonds. Though currently India doesnt offer any place where such bonds could be issued for investors, nor are there any mechanisms to rate the quality of bonds, which are essential for bond markets. 

This gives rise to opportunity for India, especially GIFT City to become hub for similar activities. In order for such a market to become established, the investors, exchanges, rating agencies and issuers all have to come on board. 

Directions in which financial reforms are headed it seems day of reckoning is nearing, but the gloomy global economic climate may just push development of these markets to couple of years down the road. 

In order for a company to successfully become part of such a market, must offer services to Municipals or say local governments, to firstly adopt international accounting standards for their books, helping the local governments make their source of revenues and expenses transparent. 

This service helps the local governments earn credibility in terms of rating agency in deciding the quality of bond, as well as for investors choosing to invest in that city's project. The room for such services are enormous and providers few. 

The next step would be for companies interested in establishing itself in issuing, trading of city bonds. These set of companies deal purely on the financial part of it, dealing with investors, and companies representing cities. 

Though in order for the market to develop, initial steps would be for establishment of companies offering accounting services to municipals, who may be interested in future for raising capital from financial markets, and have provisions for raising taxes for its residents. 

While these companies are offering accounting services, they may also focus on offering services that streamline tax collection and accounting systems, making the process of revenues as well as expenses seamless as possible. 

Currently the challenges we face are the resistance to change, and also very less adoption of sophisticated technology in its processes. If enough political will is generated, then such a market is next obvious step for boosting growth and getting finance going for infrastructure. 

Its a question of time would GIFT city attract companies who establish themselves in the business of raising capital for other cities? For the potential in the market is enormous, but will the early investors enter this segment remains to be seen? 

Payment Banks

Compte Nickel!

Payment Bank licences are regulatory response of Reserve Bank of India, to technological innovation led by paytm in India, largest mobile commercial platform with value added services for consumers living in India's biggest cities. 

Mobile commerce is a recent phenomenon, with Apple, Square, Google Wallet. each player attempting to add their own version of commercial platforms in US market, while Alibaba is investing in paytm. 

RBI, has recently issued Payment Bank Licenses, with hefty capital requirements of INR 100 Cr. (almost $215 million), with License issued to list of big players from Telecommunication industry, including paytm, who has led the path for Mobile Commerce. 

Expanse of India is enormous considering a population of 1 billion, which has almost 800 million people living in the villages, and remaining 200 million in the cities. Where paytm has more than 100 million users, with ambition to have 500 million by 2020. 

This lead is definitely significant and telecommunications are just beginning to realize the potential and thus large moves. RBI plans to announce further provisions for smaller players as well. The space for Financial Services in India is on a move. 

Currently Payment Bank model is geared towards depositors who are spenders i.e. consumers. The model is not yet allowed by RBI to become lenders, which would be the next obvious step in world of Start Ups. 

For the RBI offers flexibility in the form of Non Banking Financial Companies, for those companies who may want to venture in offering finance in this space. With development of more mobile commercial platform, need for mobile financing may just get the Laptop, Smartphone and newer device purchases going. 

Interesting example of successful NBFC in mobile commerce is Compte Nickel of France. Which currently offers various kinds of Financing. Can innovation of this kind witness similar boom in India? Will GIFT City play a role in stimulating these activities?? 

Sister Cities

People to People diplomacy in a Global world?

Often we hear friends referring to our world as a Global Village. This word is very intriguing, because it speaks of serenity and harmony of villages, at the same time speaks of expansiveness of sprawling cities.

Cities are a historical phenomenon of concentration of culture, wealth and power. Similarly idea of 'Sister City' has been rooted in America's history, with formation of Sister Cities International which was to foster ties with other cities around the globe, to promote People to People diplomacy.

I live in 'Greater Phoenix Area', which comprises of several counties and cities. Many of the other cities including my city have established these Sister Cities. This has happened because of spirit of volunteerism amongst the community.

For example, my city 'Chandler', has a sister city in Ireland called 'Tullamore' and this relationship has been facilitated by tireless efforts of volunteers, from non profit organization Chandler Tullamore Sister Cities. Over years their programs have matured and so has the relationship between the two cities.

Earlier in my previous two posts, I have tried to touch upon Student Exchange Program and Gap Year. Both of which are forms of People to People diplomacy, at family level for student exchange program and community level for gap year.

These programs have had long historical tradition in the west, something India must learn from and we are learning indeed for Indian city, Bangalore - San Francisco are sister cities. Who would be an obvious choice for GIFT City?

Well in order to realize vision of International Finance Center, the reasons would say all other  Financial Centers across the world. For such programs would indeed stimulate People to People diplomacy and flow of talent that India desperately needs.

But the current dimensions of GIFT City, are more to establish itself as a hub for Business activities of these kinds and it seems to be struggling due to slump in real estate, where huge inventory of commercial space is available, without facilities to host.

For in such a slump the venue looks attractive but logistics for operations continues to remain a nightmare. Up side to this is that if people willing to live in Gandhinagar and Ahmedabad then with a commute of 40 mins - 1 hour one way they can surely get the activities in GIFT City going.

So now the question is without people living in the City, would GIFT City be able to become someone else's Sister City. Would this City ever become a real City. Well the questions are abound and so are the commercial Real Estate.