Business needs to clean up its act to create a dynamic export sector and to exploit the abundant talent in knowledge-based industries.

India should not wait for the government to lead the way, for it will be too late. Business and other groups need to set the pace. Too much of Indian business is run by dinosaurs, visionless bosses still more comfortable with investing in the corridors of political power than in creative new ideas. India cannot fully exploit its abundant talent in knowledge-based industries, and create a dynamic export sector unless business cleans up its act. Lower cost skilled labour is not enough to attract substantial foreign investment in growth sectors. Foreign investors will be deterred from exposing their inner workings to Indian partners through outsourcing as long as they have concerns about confidentiality, intellectual property, and general
business ethics.

Indian business must raise its own standards. It can set an example by establishing industry bodies to impose business standards upon its members, including a code of conduct on sensitive matters and an autonomous industry-led mechanism to punish violators. Enlightened business leadership should understand that steps such as pre-certifying local companies which wish to enter certain sectors, monitoring the industry's behaviour, and agreeing on mechanisms to enforce compliance would ease the concerns of potential foreign partners and attract more investment.

Other institutions could do likewise. They could re-examine their procedures to attract more ethnic Indian scholars and scientists abroad to teach or research in India. More importantly, they can develop projects involving joint ventures with external schools and institutions and run them commercially along world standards. This requires both cultural and institutional changes, as well as convincing the government to remove bureaucratic and regulatory obstacles that may block such projects. It also requires removing the self-defeating and paranoid guidelines that currently restrict foreign scholars from undertaking research in India, including the cumbersome process of multiple approvals designed to restrict prying foreigners to only those subjects deemed safe by the government.

Indian professional bodies can review their licensing requirements, easing barriers that prevent similarly licensed and qualified diaspora Indians from working in India. Many countries practice a form of disguised protectionism against qualified Indian architects, medical people, accountants, and other professionals under the guise of such standards. India does not gain from placing such barriers against ethnic Indians who earned their accreditation abroad.

Many of these proposed initiatives, especially in business, are aimed at foreign companies, not ethnic Indians specifically. In practice, however, many if not most of the foreigners they will bring into the country will be ethnic Indians active in the industry and able to serve as intermediaries with the outside world.

Reform should open the country for everyone, not just for those with ancestral links to India. Much could be done to make life easier for ethnic Indians abroad, including more liberal visa policies, but India should not transform them into a new caste, with its own set of laws, regulations and even government agencies. Meeting the demands from some quarters for special treatment and facilities for NRIs solves a shortterm problem at the cost of creating a bigger long-term one. The success of Indians abroad is based on their integration, both legally and economically, with the host country, not on special privileges or barriers to keep them apart.

India is a richer and better country from having its 20 million-strong diaspora. Growing integration with them could lead Indians to compare themselves with higher global standards -not with themselves in the past-and spur faster change. Very few Indian industries follow the example of IT firms, which already compare with the best in the world. India should continue to contribute to the global talent pool as it reforms its own economy. The Indian's offspring abroad have embraced the world and thrived in it. It is time for the parent to follow their example, shed some old prejudices, and come out of semi-isolation.