Enlightened exploitation

An Indian's message to the WTO: Hands off free trade!

AN INTERNET ENTREPRENEUR sits in a Bellevue office park mulling over the World Trade Organization's upcoming talks on e-commerce. He's been too busy getting his start-up off the ground to follow all the details, but he knows this much: "I would not want tariffs."

That's not surprising, given the nature and ambition of his new company, which hopes to capture the global small business market for Web-based e-mail, chat, calendar, and other services. You might even say his attitude is typical of American entrepreneurs who want to use free trade laws to steamroll emerging (and other) industries in developing countries.

You might, that is, unless you know that the entrepreneur, Deepak Amin, is an Indian who maintains half of his 40-person staff in Bombay, where he lived until recently in a house he shared with his parents. He moved here this summer to launch vJungle.com, named this month by the venture capitalist organization Venture One as one of America's 60 most promising seed companies.

At a time when the WTO has stirred up visceral reaction against globalization in all forms, Amin serves as a reminder that the winners and losers of world trade are not always obvious, particularly in a new market like high-tech. The complicated news for proponents of global fairness is that developing countries often depend upon some forms of Western expansionism to pull themselves up. This creates a fine (and fuzzy) line between exploitation and investment. Powerful companies that set up shop in a developing country are more likely to be welcomed than if they simply release a flood of goods. They'll find particularly open arms if they come bearing technological expertise.

India is a classic case. American high-tech firms went in looking, as usual, for cheap labor and new markets. But in doing so, they ignited India's incredible technological brain power, motored by a chain of elite technology schools, the Indian Institutes of Technology, that make Harvard's admissions standards look laughably easy. Shown a sector that requires no great capital beyond brainpower, India soon saw a homegrown high-tech industry arise. It is now worth $3.9 billion, most of that wealth coming from exports.

Consequently, while India's new commerce minister, Murasoli Maran, has been talking tough about standing up to the developed world at WTO talks next week, he seems likely to support the US on extending a moratorium on e-commerce tariffs until 2001 or beyond. Certainly, India's high-tech leaders have been lobbying him to do so. "E-commerce is a major opportunity for India," Dewang Mehta, president of the country's National Association of Software and Service Companies, stressed to me in an e-mail.

If the US has had a profound effect in shaping India's high-tech economy, India in turn is beginning to have a profound effect in shaping ours. A study published this year by a Berkeley professor reveals that almost a third of Silicon Valley companies are now run by people of Indian or Chinese extraction, most of whom are probably immigrants.

"It has changed dramatically in the last two years," says Venky Harinarayan, an Indian and general manager at Amazon.com, referring to the rise of the Indian high-tech entrepreneur. He notes that Microsoft and other companies have been recruiting Indians for years, sometimes by going directly to the technology institutes. But only recently, he says, have a few pioneering entrepreneurs blazed a new trail. Think Hotmail founder Sabeer Bhatia. Or think Harinarayan himself, who along with three other Indian immigrants (and one American who dropped out) founded Junglee, an online comparison shopping service. Last year, Amazon bought Junglee for $250 million, making its four young lions celebrities in Bangalore, India's Silicon Valley.

Harinarayan now invests in other Indian-run companies, including a hot online job market called Elance.com and Amin's vJungle.

AMIN IS A PARTICULARLY intriguing figure because in some ways he exemplifies globalization even more than do multinational corporations. An athletic 33-year-old with a boyish enthusiasm, he described his background in a famous e-mail he posted a couple of years ago to an online chat among Indian techies. "I went to the US many moons ago (1987 to be precise) seeking the proverbial American Experience trudging the standard route of undergrad in India, postgrad in the US, summer job, H-1 [temporary visa], job in software co., Mexico for visa, etc. You know the schpiel. Worked at Microsoft for 6 years and decided to return to Bharatland [India] in late 1995. Set up www.indicus.com and started churning out code from Mumbai [Bombay]."

His lively, rambling e-mail, 14 pages when printed, urged others to follow despite a number of challenges he was experiencing—one being a mailman who refused to deliver the company mail for two months after Amin refused to bribe him.

Amin, however, didn't just stay put in India year-round. He would travel frequently to the US to meet with his chief client, Microsoft, for which Indicus was writing code to go into Windows 98 and NT 5.0. While here, he would jaunt down to Silicon Valley to meet with other start-ups seeking his investment.

Indicus eventually released its own product, e-mail software for small businesses that would let them maintain limitless accounts while paying for only one with an ISP. While about 500 businesses bought it, it never really took off. But by then Amin was thinking much bigger. "The small business market is a multitrillion-dollar market," he says. "Imagine, if we manage to consolidate it, this market is bigger than Yahoo's." Much of that market is also here.

To go after it, he came up with a new name and a new product. vJungle would offer a package of 12 online services that would be "integrated," so that, say, a customer service representative answering an e-mail from a customer can quickly access that person's history of online transactions with the company.

Amin also devised a new bicontinental strategy. vJungle would draw from the best of both India and the States. From India it would get talent, from the US venture capital and a large chunk of its market. Signifying the importance of the financials, Amin located his headquarters here. But listening to him talk about the "raw skill set" of his 20 "handpicked" employees back in India, it seems as if the soul of the company is there. Indeed, Amin seems to be plucking from the developed world what he needs, much as the developed world, in a more ruthless way, once plucked from India.

Amin does not blithely translate his experience into a Pollyannish view of free trade. "There will always be some losers," he says. In fact, he believes it is in India's interests to fight for tariffs in many industries, but that high-tech is not one of them. That India's entanglement with the US has left both countries richer suggests that we need to be smart about world trade, rather than simply obliterate it.

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