By: Our Correspondent

See also:  Google in China and Beyond

Indian information technology firms are anticipating sizeable
commercial gains if Google Inc. makes good on its threat to pull out of
China, eschewing more than US$300 million in annual revenues and
disbanding its 700 employees there.

The giant US-based Internet
search giant, with US$22 billion in 2008 annual revenue, made the
threat last week after spectacular reports that the Chinese government
had hacked personal data of its clients and sought information on
dissidents. Google has also long been frustrated by Beijing's attempts
to enforce censorship over a wide area. And, while Google's threat may
not lead to a scramble among other multinationals to quit the country,
it underscores the stifling business and personal freedom environment
in the world's third-largest economy.

"The Indian market may
not be able to compete with China in terms of numbers," says Anil
Saxena, an IIT alumnus and CEO of Infiniti Power Pte Ltd, a Delhi-based
company. "But it has followed a high-growth, low-cost trajectory as
evidenced by hundreds of western companies who have their presence
here. And it comes with none of the protectionist nuisance that is a
part of the Chinese package."

Suresh Kajriwal, an internet
analyst who advises Indian TV channels on cyber law, told Asia
Sentinel: "Freedom of information and the integrity of social
networking is the bedrock of technology-based, high-end service
economies. Google's exit from China will definitely help India position
itself as a far better destination for doing business."

At a
macro level, analysts say, Google's decision should help India attract
investment in sectors like IT, nanotechnology, pharmaceuticals, energy
and publishing where there is greater involvement of intellectual
property rights as India has a stringent legal framework. While Chinese
concerns over privacy and human rights clash with that of the West's,
India's strict cyber laws ensure and respect the independence of the
companies.

"Good corporate ethics, a transparent system, a
robust economy and progressive governance are the hallmark of a
conducive business environment. And India fulfills all these criteria,"
Saxena added.

India's Minister of State for Information
Technology, Sachin Pilot, was quoted as saying "India is a country that
has a very free, fair and transparent way of functioning. We are proud
to have one of the most open-minded media. There is no censorship of
any sort at all." Pilot feels India also has a "sense of stability and
an independent and transparent judiciary both of which bolster its
image as a favorable business destination. "

"The Indian public
is increasingly demanding greater and greater transparency and
accountability form the government in all spheres of public life," said
Ashok Aggarwal, a High Court lawyer and Convener, Social Jurist, a
citizens' action group. "This openness augurs well not only for Indian
citizens but also for overseas outfits keen to do business with us."

The
Google-China contest coincides with a fierce debate in India over a
greater need for transparency in all spheres of public life. This also
includes finances of corporations, especially in the wake of a massive
scandal in which Satyam Computer Services, inflated its revenues by
US$1.2 billion.

The Congress-led United Progressive Alliance
(UPA) government passed the Right to Information (RTI) Act in June 2005
after years of struggle by NGOs and civil society groups. Since then,
the Indian Supreme Court and the High Court have been tacking cases of
public interest and government corruption very seriously. Recently, the
Delhi High Court's decision that no one in India, not even judges in
the Supreme Court judges, is exempt from the needs for transparency,
also bodes well for the openness in the country.

In contrast,
according to recent spectacular reports in the US press, Beijing not
only controls its own population's access to information but also
allegedly carries out cyber-espionage against governments and companies
across the world. Though global corporations flocking to China can ill
afford to be critical of local restrictions, foreign investors find it
disquieting that their commercial secrets and intellectual property
rights are being flouted due to officially-blessed hacking. The Chinese
lack of transparency thus offers the perfect springboard for India to
attract more intellectual property and knowledge-based investment and
gain a competitive edge over its arch rival.

"In the last
decade and a half," Kejriwal said, "the Indian government has only
banned all of 20-odd websites. Even these were removed because they had
the potential to harm national interests and sovereignty."

India,
he said, recently amended its cyber laws and has an agency called CERT
24/7 to protect the internet from attacks and cyber terrorism. The
Indian government also tightened its IT laws after the November 26,
2008 terrorist attack on hotels in Mumbai which killed 163 people.

In
addition, India's biggest disadvantages are the procedural bottlenecks
to investment. ArcelorMittal, the world's largest steelmaker, recently
threatened that difficulties in obtaining land in India may force it to
look for alternate sites to house its $20-billion steel projects.

Mittal's
frustration at his inability to make any headway with his plans for
investment in India is reflective of potential investors, both domestic
and foreign, who find it impossible to tackle India's notorious
bureaucracy. In fact "Doing Business" reports of the World Bank have
repeatedly placed India at the bottom of the list.

Even so, with
growth continuing to lag in the United States, most global companies
will need all the sources of growth they can muster across the world.
Businesses are aware of the acute need to diversify to other investment
destinations outside of China. Moving to India, analyst say, will be on
their radar. That may be also representative of a larger dilemma
confronting global brands who are eager to benefit from China's
economic growth but are inimical to its local laws and values.

In
other words, despite its frustrating procedural delays, India still
scores highly due to its strong and vibrant democracy, a robust legal
system, an unfiltered internet communication and its sizeable
English-speaking population.