Jan 12, 2017 10:29 PM IST | Source:

COMMENT: Why it‘s easier for politicos to control an Amazon

Globally, businesses and entrepreneurs are getting a clear message – fall in line (with the new regime) or fall out.

Union Minister for External Affairs Sushma Swaraj this week threatened American e-commerce firm Amazon with visa cancellations of its executives if it did not remove Indian flag printed doormats selling on its Canadian website.

Swaraj is not the only national leader who has threatened a corporate with dire consequences if they do not toe the line or culture of a nation. Globally, businesses and entrepreneurs are getting a clear message – fall in line (with the new regime) or fall out.

Three of the world’s leaders have been replaced in last few months – David Cameron, Barack Obama and Francois Hollande giving rise to right wing politicians in the respective countries. India also saw the rise of BJP in 2014.

It has led to a change in the economic systems across the world.  In the UK, immigration minister Robert Goodwill this month raise the prospect of a £1,000 per-employee annual levy that will be imposed on firms hiring non-EU migrants in the country. Global banks in the UK are considering moving out as a result of the post-Brexit impact, threatening London’s presence as the world’s financial centre.

Recently, US President-elect Donald Trump threatened General Motors as it planned to move a plant to Mexico. He also threatened with heavy taxes for US companies that move their business operations overseas and still try to sell their product to Americans. The recent H1B visa Bill which has raised the minimum salary required to get the visa from USD 60,000 to USD 100,000 could force technology offshoring businesses such as IBM, Accenture, Infosys, Wipro, and Cognizant to tweak their business models.

Clearly, the world is moving in a direction where businesses have had to completely make a U-turn on their models and globalisation strategies due to regime changes.

In India, demonetisation has a major impact on how SMEs operate, pay their vendors, workers and manage finances. Many paid 4-5 months salaries in advance in cash to workers as the government moved to ban high currency notes and replace them with new ones.

Consumer sentiment has been hit even as the tax net has supposedly widened and collections increased. Luxury brands in sectors such as auto and fashion accessories have been the most impacted. Real estate sector has been hit as well.

The usage of Twitter

Last year, Delhi Chief Minister Arvind Kejriwal warned taxi aggregators Uber and Ola on Twitter of dire consequences if they did not stop surge pricing during the Odd-Even period. Both the companies started surge pricing later in the year even though their app does not show surge sign. While usage of social media channels such as Twitter has become a gimmick for sending a political message, implementation of that message has been lax.

Usage of Twitter by Trump, Modi or Kejriwal solves two challenges – the leaders reach out to their audience directly, it sends a signal to the corporate to back-off. Using the channels like official letters is being seen as a passé as leaders lose nothing by their theatrics. But a society could lose the business and jobs if leaders make crass statements on social media damaging that business’ brand in the country – making it sound anti-national.

Easier to push diktats on large companies

Cleaning economies of black money, making businesses benefit societies, widening tax nets, protecting jobs and overall consumer interest is a welcome move. However if entrepreneurs start getting impacted with stifling regulation, they simply start reducing expansion plans and cutting jobs in the location or simply moving out of that geography which has a debilitating impact on society. 

Globalisation benefits societies even as it makes their culture richer, more innovative and competitive. However stifling regulations, sudden policy U-turns, diktats on social media how business should be performed could have impact on entrepreneurs. The way of round table talks or meetings for communication is being seen as a passé.

Sushma Swaraj’s diktat to Amazon Inc on Twitter has made the company remove the sale listing of Indian flag doormats. However, in countries such as South East Asia, China, Middle East and others, buy any T-shirt with an Indian map and often you get a shirt with a distorted Indian political boundary.

It simply occurs printers and designers use the local search engines and map websites that show different maps suiting the political sensitivity of that market.

Even now, tricolored shirts (that violate flag code of conduct) and pants with images of Gods can easily be bought in shops and bazaars of India.

Leaders know that implementation of diktat can be easier done only to large companies. However to make the small shopkeeper in small bazaars to implement the diktats will be difficult.

(This is an opinion piece.)

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