Lal Kidwai Photo by Dayanita Singh

Raised in Mumbai and Delhi, Naina Lal Kidwai (MBA ’82) went away to school in Simla, in the Himalayas, and has conducted her career at similarly lofty heights ever since. A Delhi University alumna and the first Indian woman to graduate from HBS, Kidwai joined ANZ Grindlays Bank (now Standard Chartered Bank) in India in 1982, rising through the ranks in a variety of merchant, retail, and investment banking assignments before moving to Morgan Stanley’s India operation in 1994.

Through a joint venture with the investment bank JM Financial that she helped draft, Kidwai expanded Morgan Stanley’s impact in the country dramatically. She was instrumental in the NYSE listing of Wipro; in facilitating nationwide cellular phone service through a deal involving the Tata and Birla families and AT&T; and in a number of privatizations. Last November, she became vice chairman and managing director of The Hongkong and Shanghai Banking Corporation’s (HSBC) investment banking and securities business in India. She was selected as one of 2002’s fifteen emerging “Global Influentials” by Time magazine; in 2000, Fortune magazine named her the third most powerful businesswoman in Asia.

Married and the mother of two children, Kidwai, a devotee of Western and Indian classical music, enjoys returning to the Himalayas for trekking and to observe wildlife.

India and China seem similar — slumbering giants waking to a global, market economy.

India today is rather similar to China a decade ago — exports are 10 percent of GDP, per capita GDP is just shy of $500, and it has slightly more than one billion people. It is a relatively closed economy without a great deal of foreign investment.

Today, the globalization imperative is driving Western manufacturers and service providers to China. Eventually, it will also drive them to India because only India can compete with China on both labor costs and domestic-market potential. Foreign firms will demand access to India and force the country to open up.

As India does open up, what are its other competitive strengths?

Compared with China, India has a more familiar legal and judiciary system, better protection for intellectual property, and strong English language and engineering skills. The Indian banking system is improving and has a much lower percentage of nonperforming loans than do Chinese banks.

Because of its noisy, contentious democracy, India’s reform process is more arduous than in authoritarian China. But in India, there’s more of a collective “buy-in” to reforms because the interests of all constituencies have been considered.

What areas do you see as most in need of reform?

As India deregulates, the strength of its economy will depend on the ability of its independent regulators to provide for a level playing field between the government and private sector in areas such as insurance, civil aviation, telecom, and energy. Privatizations, tariff reform, an end to preferential treatment in agriculture, and reforms that encourage investment in the energy sector would also boost competitiveness.

What are attractive investment opportunities in India?

Sectors that require technical and labor-intensive input, such as software services, business process outsourcing facilities, and call centers. India has become a parts supplier to the global automobile industry. Biotechnology and pharmaceutical firms are emerging as international players.

There are also opportunities in infrastructure investment, such as telecom, ports, roads, and airports.

Please comment on India’s capital markets and the role of venture capital and foreign direct investment.

Today, with more than nine thousand listed companies and a market capitalization of $125 billion, India has efficient back-office and settlement systems, and the ability to attract international capital. With greater transparency and with falling interest rates, investors should find the capital markets attractive.

Private equity and venture capital have played a major role in providing equity to firms before they are ready to access the capital markets. Foreign direct investment, at $3 billion annually, is small.

Are public expectations about business’s role and conduct in society different in India than in the West?

Expectations concerning business are becoming more like those in the West. Indeed, there is probably a greater requirement of business in India to be engaged in its immediate environment, to provide for programs for poverty alleviation and health. One area that has tended to be ignored is pollution.

Corruption exists but numerous companies that do not succumb to it still get things done and are successful. As for corporate governance, India has historically been dominated by family and government-owned companies where clubby boards did not always insist on the highest standards. Indian companies had begun to wake up to this problem even before the crisis in corporate America. They have also observed how shareholder value multiplies in those Indian companies that adhere to high standards of governance.

The world beckons, but you’ve chosen to live and work in India.

Even at HBS, I was very sure I wanted to return to India. This was home, where I had my network, support systems, and extended family. I also believed that in my own small way I could contribute to India’s progress in my area of investment banking and in the wider environment. The impact of a $500 million deal here is probably greater than a $5 billion deal in the United States — typically such a deal would be an industry trendsetter or a sector’s first-ever privatization.

As a pioneering Indian woman, have you faced particular challenges?

I believe it is easier for me to succeed as a working woman in India than it is for many of my female counterparts elsewhere in the world. First, women in India are accepted as just another element in a diverse workforce consisting of many different ethnic and religious groups. Second, there is an extended family of mothers, sisters, and mothers-in-law ready to step in along with easily available domestic help. However, despite these advantages in the urban middle class in India, women are only now entering the corporate world in a significant way.

For my part, I have always believed one must have a dream, set goals, do one’s best, and not worry about the result. Any accolades that have come my way have only been an endorsement that I am on the right course and an encouragement to go on.

—Garry Emmons

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