City Palace Jaipur   

Boy at train station

Train travel

Train station boy eating

Train station-little boy in big shoes

January 8 to 29, 2010

We recently returned from India, having enjoyed a truly wonderful trip to this fascinating country with a terrific group of fellow travelers. We hope you will enjoy some of our recollections, images, and experiences, as described below.

India truly has enormous contrasts. It has people living with enormous wealth and in the direst poverty. Yet, while famines were common several decades ago, most Indians have enough to eat today. While it has highly trained software and hardware engineers and technicians, it cannot make its airports and highways work efficiently. Seeing American tourists able to spend whatever they want on luxuries must be very difficult for the hundreds of millions of very poor Indians, but every Indian we met, no matter what his or her circumstances, treated us with the greatest courtesy. Above all, we loved the Indian people.


We arrived in Mumbai an hour late (at 2:30 a.m.), without our luggage. So, this being India, internet capital of the world, but unwired and unconnected in its most important infrastructure, I spent 2 hours getting our claims filed amidst a furious mob of people all trying to get someone's attention at 3 a.m. Every form had to be filled out by hand and signed several times and the 2 Lufthansa agents were frantic because they not only had to deal with the enraged crowd, but also had to fill out 3 different forms in long hand and then take each customer through customs. So, I made sure I kept my place in line and finally got all our paperwork done-at 5 a.m. We arrived at our hotel at 6 a.m. and decided to forget about sleeping and just get cleaned up and go out sightseeing.

Our favorite place in Mumbai was the Gandhi Museum, which chronicles Ghandi’s life with photos, dioramas,and quotations from his many writings and teachings. One particularly memorable exhibit was of 2 letters he wrote at the beginning of World War II to Roosevelt and Hitler asking them to avoid war but saying he would not support Hitler's evil.

A startling aspect of every city in India is the large number of people living and sleeping on the streets. As we drove to our hotel (the Taj Mahal-the one that was attacked by terrorists last year), we saw people rolled up in blankets and quilts, sleeping right next to one another on the sidewalks. During the day, they protect their spaces by squatting on their spot and begging, washing, and cooking-if they have food-there.

We spent a full day in meetings our second day in Mumbai, with a private equity partner, the U.S. Commercial Counsellor (the senior Dept. of Commerce foreign service officer in Mumbai, who has served twice in India, twice in Indonesia and once in Italy), a very large business outsourcing company-WNS Business Services, and the largest new real estate development-shopping center, office and residential towers. Very interesting day. We were all pretty tired when we finished, but our driver must have been exhausted because the traffic is horrific and traffic rules are virtually ignored.

We had dinner with Gautam Patel, the friend of one of our fellow travelers, and his wife at their home, which was really fun for everyone. Before dinner, we met Gautam at his club, an old British club that still looks and feels like colonial India.

Meeting with Gautam Patel, private equity investor

Gautam Patel, the friend of one of our group members, has been a private equity investor in India for a number of years, after spending a decade in the U.S. in school and business. He told us that only 5% of Indians own stock. The top 100 Indian companies represent 95% of the Indian market’s value and activity.

India has a goods and services tax and a value added tax. Individual states can levy their own taxes on goods and services as well. There is a big need to make taxes national and uniform, a reform the Indian Parliament hopes to complete in 2010.

Clearing title to land is one of India’s biggest property problems. In order to build new factories and subdivisions, developers must displace farmers and slum dwellers. States are now competing for private investment, so are helping investors to clear title to land.

Agriculture is a huge part of the economy. It is very dependent on the monsoon, particularly as most farming is subsistence level. India imports wheat and crude oil. The government has tried seeding clouds during weak monsoon years.

Private equity has seen a big decline since the global recession began. Deal sizes are way down. Information technology and business services are the biggest sources of deals. There are caps on the amount of foreign ownership in some sectors—amounts varying with the industry. Private equity is beginning to perform as well as in other markets. In India, the private equity investment time frame is 5 to 25 years.

The Indian middle class will increase twelve-fold by 2025, to 525 million people (out of an expected population of 1.3 billion by 2025). The rural population is moving to the cities, but infrastructure growth is not keeping up with the demands of the growing urban population. Government’s focus is moving people up economically.

The illiteracy rate is 40 – 45% in rural areas. Microfinance is now a big focus in an effort to improve living standards in rural areas, even with the low literacy rates. Financial inclusion is a government priority. The goal is to give more people access to capital. When women get micro loans, their husbands often steal it to buy alcohol, so the women lose their capital.

Indians don’t have anywhere to save small amounts of money. There is a huge base of microfinance customers, but these are only women, on the model of Bangladesh’s Grameen Bank. Fifteen million Indian women participate in microfinance lending. The loans are distributed by people on motorbikes with backpacks full of money. The cash is disbursed at town meetings, attended by several thousand women. The banks won’t disburse more money if the previous week’s or month’s payments have not been made.

India has about 50,000 small and medium sized enterprises (SME’s). About 7% of GDP is going to infrastructure today. Of this, 45% pays for machinery and equipment. Gautam thinks the best opportunities for growth companies are among the SME’s. The investment market is very inefficient. An investor needs to go to secondary markets to look for entrepreneurs and good deals. Entrepreneurs are very savvy. Investors should start with the premise that they can’t trust entrepreneurs and that 90% aren’t backable. To be successful requires lots of searching and building relationships. Entrepreneurs are just beginning to understand that they have to give up some equity to get the cash they need.

Meeting with Richard Rothman, U.S. Commercial Service

Richard Rothman heads the U.S. Commercial Service in Mumbai. This is his second tour in India. He has also served twice in Indonesia and once in Italy. He brought two colleagues with him, who were also very knowledgeable about Indian business, politics, and economics.

There are now many private equity companies in India, a country of 1.1 billion people. Before 1991, the economy was very closed. The government licensed everything, which meant there was no real economic growth and no real competition for 40 years. In 1991, the government liberalized the economy and ended the licensing requirement for starting a business. Old companies had to reform or go out of business.

The economy became private-sector driven, modern and well run. Active capital markets developed, with more trading of shares in India now than anywhere else except the U.S. The corporate sector is more Westernized and competitive than in China.

The infrastructure and legal system remain backward. It takes 20 years to settle disputes via the courts. There is lots of corruption. India has big labor problems, with laws similar to those of Europe. To date, India has not been a manufacturing destination. It is service-focused.

Because of the liberalization of telecom, there are between 400 and 500 million cell phones in use today. India has good connectivity. There has been a big increase in English speaking, well-educated people. However, India fails at basic education.

The labor unions are run by semi-gangster types. Manufacturing is successful in industries where high tech, low labor is possible—steel, for example. These companies hire engineers, not low-skilled workers. They contract out product manufacturing. American companies are targets of labor unrest and extortion attempts, notably Cummins and John Deere.

In India, a country with a huge impoverished population, democracy means that sympathies go with labor over capital. People don’t understand that restrictive labor policies cost jobs.

Agriculture hasn’t done well. The growth rate is only 3-4%. Many farmers are committing suicide because they can’t make their loan payments. The Congress Party has a policy of forgiving agricultural loans. They provide jobs for part of the year to farmers.

The BJP is more free market oriented. Policies are constrained by a democracy with poor voters. India is very slow to change. There is not much room for further liberalization now. For example, the government can’t let giant retailers put tiny shops out of business.

In India, it takes 10 years to build a project that China could build in 3 years. The government is trying to set up special economic zones, but that is very hard in a country where every inch of land is occupied (even if not owned).

There is no imperative to share commercial cell towers, which is what lets you make money on towers. Cell phone usage in India is the cheapest in the world. There are many rumors about the harm radio waves can do. India already has enormous cell phone coverage, with many subscribers getting free incoming calls for a lifetime. So, the explosive growth is over. Probably 400 million Indians can’t afford a phone. It is a brutally competitive industry, with charges being a fraction of a cent per minute per call.

The auto sector is phenomenal. Until the 1980’s, there were 2 auto manufacturers, Premier Auto and Hindustan Motors. They had quotas of 50,000 cars per year. Maruti-Suzuki started making the “farmers’ car” in the 1980’s. It is 50% government owned, with the rest of the shares being traded in the market. Now it sells 100,000 cars per month. It is focused on small cars.

Tata started making cars 10 years ago. The quality is not good. Maruti has a Japanese partner, which has helped it with quality. Now all the major carmakers are here. The taxes on cars are high—30-40% of the price.

India has started to expand its road network. These are not big highways, but there are both 4 lane and 2 lane roads.

Bombay has many bomb blasts each year, but rich people don’t get killed, so no one hears about them. The attacks on the Taj Majal and Oberoi hotels last year caused a momentary uproar.

Rich people don’t vote. The voters are poor and lower middle class Indians, so the government panders to them. They get something for their vote. Rich people think politicians are scumbags. Half of the urban population lives in slums. The political class tends to come up from the bottom or are offspring of political families.

The country is run by bureaucrats on the British system. The Indian Administrative Service is highly respected, is selected through very competitive exams, and is highly educated and very high quality up to the level of minister. There aren’t political appointees to carry out policies, so each new government has limited impact. Things get done when the government steps aside. When American companies in India have problems, they don’t go to politicians for help. They go see the bureaucrat in charge of the department that impacts them.

The U.S. Commercial Service looks at the best sectors for American exports. Sectors that are past their prime in the U.S. are often big opportunities in India. Private education is a phenomenal business here. It would be a good investment area. There is a law pending to allow investment in higher education. All education in India is booming, as is health care, 75% of which is private.

India is importing corn, soybeans, and lentils. The top sectors for U.S. exports are: nuclear, solar, education, autos, higher education, information technology, financial services, software and hardware, and aviation.

Meeting with Neeraj Bhargawa, CEO of WNS, business processing outsourcer

WNS has 22,000 employees worldwide. In India, WNS provides transportation for its employees because of the heavy traffic and lack of good public transportation. A woman is never the last employee to be dropped off in order to assure her safety. During the night shift, there are always guards. The company provides door-to-door service at night. Meals are subsidized.

There are centers in Costa Rica and the Philippines. WNS will only go outside India if there is a potential client and then will build a facility or take one over for that client. They are looking for a good location in China.

Warburg Pincus was the first investor in WNS in the mid 1990’s. British Airways and GE were their first clients. At the beginning, they had 1000 employees, mostly airline-related. They have grown from a $50 million business to a $400 million business. In 2006, WNS did an IPO.

Their primary focus was on the travel industry, from airlines to travel agencies. They take care of lots of operational transactions, such as crew scheduling and rebooking flights. There are 80 different processes they handle.

It is too risky to be focused only on the travel industry. WNS had its first appointments with travel companies in September, 2001. For 9 months, they had no response. They began to shift to an insurance focus, which now makes up 40% of their business, while travel is 25%.

Insurance services they perform include: claims processing, change of address, premium collections, customer complaints, and accounting. Anything with clear rules can be done by WNS. They are real experts in these processes.

WNS also supports CFO’s activities. If there is a critical mass of work, taking more than 100 people, the process is worth outsourcing. They can provide centralization and standardization. For example, GE closes its books in India. WNS has a big Six Sigma focus thanks to GE. There are more Six Sigma experts in India than in the U.S. Clients come for cost and stay for quality.

A new field is market research. Clients started sending survey forms to WNS to tabulate and analyze. That brought more complex work on analytics and market research. They do lots of data mining, financial research and analytics for investment banks, supply chain analysis. Analytics are now about 11% of their revenue. In India, outsourcing is a $30 billion industry out of $50 billion worldwide. WNS has growth potential with existing clients and industry expansion.

They have a big investment in security systems, including physical security. Some clients have closed circuit cameras observing each desk at WNS. They don’t have competing activities in the same building.

Employees need good processing skills. They must be able to read and speak other languages fluently. Most employees are BA’s from second tier colleges. Call centers require English skills, which makes the Philippines a good location since it is culturally close to the U.S.

For specialized accounting work, WNS hires people with BA’s in business and accounting. For analytics, they hire MBA’s. Entry level salaries are $5–10,000 per year. Starting lawyers get $6-7,000 per year. Neeraj explained the compensation pyramid at WNS. The top tier leaders get 80-90% of U.S. salaries for the same position. Managers get 40-60%; specialists, 15-35%; and workers, 5-20% of U.S. salaries.

WNS offers all kinds of degrees inside. Vocational training in India is inadequate to provide a modern global workforce.

Visit to High Street Phoenix, major retail, office, residential development

High Street Phoenix is a huge shopping mall development with office and residential towers as part of the complex. 60% of India’s population is under 29. Today, organized retailing is taking hold, moving away from only family-owned shops. The retail market was $353 billion in 2008. In 2010, it is expected to be $416 billion. Shopping malls have 12% of that market.

Phoenix Mills, the owner of High Street Phoenix, focuses on larger cities. They have 50 million square feet of development. Another company serves medium-sized markets, while a third company works in small markets, such as Agra, Varanasi, and Hyderabad.

The High Street Phoenix complex is 3.1 million square feet. It is a market city concept, with a Shangri La hotel and 2 Marriotts, all 5 star hotels, and all attached to the shopping center.

The company has 19 malls in various stages of construction. This is the only one that is finished. Others will come online this year. There is no complex in Delhi, primarily because of the difficulty of getting land there. The choice of land is the key. The company has prime locations in every city it serves. But, in Delhi, the city is very saturated with retail.

There are 4000 stores across all their projects. Their retail space is 80% leased and the office space, 40%. Phoenix Mills’ investors are Germans, a private equity fund in Mauritius, and Indian investors via the Bombay stock exchange.


We flew to New Delhi and left immediately for a tour of several auto parts manufacturing plants. The traffic quickly came to a complete stop. We battled broken down trucks blocking a full lane of our two lane side of the road so that passing took forever. Finally, after 3 hours, we told our guide to turn around because it was now 4 p.m. The general manager of the plants we were going to visit was very disappointed, but kindly got on our bus with us and talked about their company and about India generally for the 2 hours it took us to get back to the hotel.

Traffic is the overwhelming factor in Indian travel logistics. They are pumping out cars at record paces and even further clogging the roads. The railway system is not geared towards freight, as ours is, so most goods are carried on trucks, most of which are ancient, rusty, smoky, smelly, with constant breakdowns in the midst of the traffic lanes. It can take hours to go 10 miles.

Jet Airways is India's primary competitor to the dreadful Air India. It is a superb airline, with great service, good food, very helpful staff. Now, however, there are low cost airlines starting up which threaten its business pretty severely.

In addition to visiting the Red Fort in Delhi, one of the stunning old fortress palaces in India, we visited a spectacular temple, Swaminarayan Akshardham, just outside Delhi. It is huge and relatively new, with magnificent stonework and carving.

Delhi elephant on bridge

Varanasi cremations

Varanasi mother dog and puppies

Varanasi old men begging

Ranthambore Sambadeer

Ranthambore spotted owl

Ranthambore tiger hunting

Ranthambore tiger watching us

Taj Mahal in fog

Ranthambore tiger with kill

Caracol cat in Ranthambore

Ranthambore monkey

Jaipur City Palace

Jodhpur textile shop

Jodhpur, the blue city

Cocktails with the Maharana

Old man in Devigarh

Devigarh potter's family

Devigarh woman in field

A favorite part for all of us was a row of elephants carved in the stone surrounding the main temple. There were charming quotations about the beliefs of the Hindu sect that built the temple, recording their values and ways to live a good life.

We followed our visit to the Red Fort with a ride through Old Delhi’s seething market in bicycle rickshaws as our drivers kept pointing out “old building”, “old building”. We ended up at the main mosque in Delhi, where the women in our group had to put on brightly colored robes to make us more modest. There was a funeral in the works inside the mosque courtyard, with male relatives of the dead person performing ritual washings in the fountain.


Varanasi, formerly Banares, is the spiritual center of India, holy to Hindus and Buddhists because it is on the most sacred part of the Ganges and is where Buddha preached his first teaching.

Varanasi is very hard to describe. It is like a movie set of every Indian movie I've ever seen-only this is real. The city has 2 million people and they are all in the narrow streets all the time. This is a city of constant motion and unbelievable crowding. The streets are very narrow and filled with rickshaws, bicycles, pedestrians, buses, cars, cows, dogs, and roadside stands (blankets spread on the ground piled with goods) right up against the asphalt. Everyone drives in the middle of the road and swerves at the last minute to avoid hitting someone or something. Our guide said there are only 3 driving rules in India: have a good horn, have good brakes, and have good luck. The other predominant rule is that, yes, there are rules and you follow them only if you want. Here in Varanasi, there are no stop signs and no traffic lights. Everyone goes as fast as possible and careens off at the last moment to avoid an accident. It is a maelstrom of bicycle carts, rickshaws, motorcycles, pedestrians, cars, trucks and buses all filling the very narrow space of the streets that are wide enough for about 1/4 of their occupants.

There is lots of color. Markets are filled with mounds of bright red carrots, long white radishes, purple onions, giant cauliflowers, lime green cabbages, green onions, oranges, guavas, and then women in beautifully colored saris searching for just the food they want for that day's meals. In most markets, this is all piled either on the ground or in the backs of bicycle carts. Cows wander amidst all this chaos, munching whatever they can find. I saw one cow go after a lovely green cabbage, only to get scolded and shooed away by an alert merchant. The trash is monumental-scattered and piled everywhere. Cows and dogs rummage through the trash for anything they can find to eat.

The dogs are very sad. They have sweet faces and usually horrible mange all over their bodies. They fend for themselves. To keep warm all the people on the streets hover over little fires made of paper or leaves or sticks. When these burn out and the ashes have cooled enough, the dogs curl up in the ash piles to get warm. We saw one little mother dog curled up in the ashes with 2 puppies nursing. I saw one man cut off a plastic bottle and pour milk into it for another dog-that was a lucky one. I don't know how they survive in the crowded streets. Many don’t.

Our first night here we took rickshaws through the center of the city, all bustling with human and animal activity. Everything was, as always, extremely crowded and very dirty. Our rickshaw drivers (on ancient bicycles) raced one another for about 3 or 4 miles to the banks of the Ganges. We all loved it, though it is a bit more thrilling than one would expect, given all the obstacles you nearly hit.

The walk down to the Ganges is unforgettable. Thousands of beggars crying out for money. They are huddled along the steps down to the river, crouched in every doorway, filling every available space. Our guide says that some of them are legitimate beggars, unable to work. But, many of them are large families that have begged for generations, and have lots of children to add to their ability to garner money. I'm sure some of that is true, but India also has very high unemployment, a very poor public education system, and intense poverty, so millions of people beg because they have no other way to live. We are told constantly to avoid buying anything from the street vendors and to refrain from giving anything to beggars because we will be swarmed by more beggars if we do. Don slipped a little money to one little boy and was quickly a star attraction. It's very hard to see this human misery, but it is such a fact and way of life in India. People see themselves as born into a position, thanks to the continuing caste system (illegal, but real), and if they live this life well, the next one will be better.

We took a rowboat up the Ganges, looking at all the people bathing in the filthy water, lit up by lovely little bowls full of flowers and a candle floating on the river. You can buy these, make a wish, and put the bowl in the water, so there are hundreds of little lights all across the wide river. Our boat stopped at the most significant cremation spot on the Ganges, where every Hindu in India would like to be cremated. Inside a temple up the high river bank, there is a fire that has been burning for thousands of years and has been tended by the same family all that time. That is where you go to get your torch for the cremation.

There were 16 fires along the banks when we were there. Between 200 and 300 bodies are cremated each day, so it is first come, first served. You have to wait your turn. Only the men participate since Hindus think women are too emotional to be there. First the body is covered with natural oils (butter, usually) so it will burn, then it is carried to the water and washed-dipped and sloshed, really-and then placed on a pile of logs (which the family buys from a vendor). The torch is secured from the temple. The nearest relative (oldest son for the father, youngest son for the mother) lights the fire. It takes about 3 hours for the body to burn, with family members watching over it all that time. When the cremation is complete, the remains, including the ashes and coals, are shoveled into the Ganges. Most of the bodies are covered or wrapped in something, but not all. I'm sure that depends on what the family can afford. It was really amazing to watch and to try to understand how all this ties into the life of India. With the fire and smoke, the soul is helped onward to the next life. Seeing all this in the twilight and into the night was something none of us will ever forget. You have to appreciate the reverence with which this ritual is carried out.

We also spent an afternoon in Sarnath, where Buddha gave his first teaching. There were hundreds of Tibetans there, visiting the partially excavated site of the temple where Buddha stayed and taught when he was in Sarnath.


Agra, home of the incredibly beautiful Taj Mahal, was foggy and cold. We drove there from Delhi, where our flight from Varanasi had been delayed by weather, so we arrived at our hotel, the Oberoi’s Amarvilas, very late. Fortunately, the hotel, as are all the Oberois, is gorgeous, with great service and lovely rooms overlooking the Taj Mahal (too foggy to see, unfortunately).

The sites of Agra are amazing, including Akbar’s Tomb, Agra’s Red Fort, and, of course, the Taj Mahal. In the mist, the Taj was ghostly and magnificent. The detail of the carvings and precious stone work in the marble is beyond imagining.

From Agra, we drove to the train station at Bharatpur, stopping to see the abandoned 15th century city of Fatehpur Sikri, cold, somber and deserted, on the way. Because of more bad weather, our train to Ranthambore was 2 hours late. It was cold on the open platform, but we amused ourselves by taking hundreds of photos of the children, families, old men, cows and dogs that filled the platform and the surrounding area. You can see some of our favorite photos on the photo page of this trip.

Finally, the train arrived. We had first class seats, which aren’t much to brag about. One section had seats below and bunks above. A man clambered up to the bunk above our heads, quickly fell asleep, and rattled the windows with his remarkably loud and varied snoring for the duration of our trip.You can see some of our photos on this page.

The train was fun because we could see so much of the rural part of Rajasthan, the state where we spent most of our time. So much of the land is overgrazed that erosion is a monumental problem everywhere. There are too many cows, goats, and sheep for the available grassland. And too many children herding them and not going to school.


This has to be a highlight for anyone visiting India. Ranthambore is one of the tiger reserves. The last time we visited this beautiful place, only some of our group saw a tiger. Now, the reserve is divided into sections and you can only go to your assigned section to look for animals. Fortunately, our sections had several tigers, so all of us saw these gorgeous animals during our 4 game drives.

There are only 39 tigers in Ranthambore right now. About 6 years ago, poachers killed all but 3 of the males, and only one of those 3 actually bred females. So, they are struggling not only to rebuild the tiger population, but also to broaden the gene pool.

Ranthambore has several lakes, full of birds, several kinds of deer, antelope and a rare small cat, the Caracol Cat, which we were lucky enough to see late one evening. There are also beautiful owls. We saw two, one very large brown speckled owl and two tiny spotted owls peeking out of a large hole in a tree.

We stayed at the Oberoi’s Vanyavilas, a “tent” camp that is mostly magnificent concrete bungalows with canvas roofs, set in gardens that are both wild and groomed, with lots of peacocks, parakeets, and other birds.

Ranthambore also has an ancient fort high on a bluff, with many temples inside. So, the local people visit the temples daily, trekking many miles to do so. A few lucky ones have motorbikes or cars, which are always piled with people. A typical motorbike in India will have 4 to 6 people attached to it somehow, while a small 4 seater car will have at least 10 people loaded inside. We were the fortunate ones in our jeeps with 4 passengers each and a naturalist and driver.


The drive to Jaipur was long, but never dull as we avoided every imaginable conveyance in the middle of the road. Lots of camels, a few elephants, countless motorbikes, heavily overloaded trucks lurching along under their burdens, ancient, smoky buses with people hanging out windows and onto the top and sides, pedestrians, cows wandering blankly in search of anything to eat, and scrawny dogs lying on the pavement for warmth.

One of the highlights of Jaipur is riding elephants to the beautiful Amer Fort. The elephants are decorated with colorful paint and topped with saddles and their mahout. Now, each elephant can only make 3 round trips to the Fort. In the past they were often overworked and sometimes became enraged, hurting tourists or mahouts. They are remarkable animals, very smart, watchful, and well-trained. This year, the lake below the Fort was empty because of the drought, a real hardship on the elephants who like to wade into the lake and spray themselves with cool water after a day’s work.

Like all the major cities of Rajasthan, Jaipur has magnificent palaces and forts. The craftsmanship is so beautiful, including gemstones, mirrors, glazed pottery, paint, colorful textiles, and fine stonework.


We’d planned to fly to Jodhpur, but chose to take our trusty bus instead because of the daily flight cancellations through Delhi. A long trip of about 9 hours. But, at the end of the day, we could see a fabulous palace on a hill, which was our hotel, the Umaid Bhawan Palace, where one of the maharajas still lives. Just below the palace is a large new subdivision with big sandstone villas under construction. It was clear that these would be occupied by an extended family, with several separate entrances to private quarters and big common spaces for the entire family.

Don took us to a textile shop in the old market. It is 5 floors, each level piled high with handmade shawls, bedspreads, blankets, decorative wall hangings and on and on. The best salesman any of us had ever seen took charge of our group, making us comfortable on a pile of textiles.

First he showed us all his wares, gorgeous things, moving from low end to high end. He told us he would explain the prices later. After we had seen all the splendor, including products he told us were made only for Hermes and Neiman Marcus and so on, he told us the prices, which were very low. Then, astute salesman that he was, he told us to raise our hands as he went back through all the pieces if we wanted that piece. That got the competition going as we, of course, all raised our hands with virtually every piece he showed us, and then negotiated with one another to get what we wanted. As prices rose, so did our buying frenzy. A good day for that salesman.

As we left Jodhpur, again in our bus rather than a delayed airplane, we stopped at a dhurrie (woven cotton rugs) coop. By the time we left there, the owner had almost no rugs left. They are bright, colorful, handmade, unique to the local village, and not too expensive, which made them very appealing even if we couldn’t imagine where we would put them.


Driving yet again from Jodhpur to Udaipur, we stopped at the largest Jain temple in India, a huge, heavily carved structure in a remote area. The Jains do not believe in killing any living creature. Some even wear masks or veils so they don’t accidentally breathe in a tiny bug.

We arrived in Udaipur in time to take a boat across a lake to our hotel, the Oberoi Udaivilas, a lovely sight after a long day as it glowed in the sunset. This was everyone’s favorite hotel with its lush gardens and large, comfortable rooms with private patios. The next day we went to the City Palace, which was so crowded with tourists in town for a Jain convention that we literally couldn’t move in the tiny passageways. We escaped as soon as we could. That evening, we enjoyed cocktails with the Maharana of Udaipur (see photo), a well-traveled, well-educated man who focuses on trying to improve the economy of Udaipur while driving his collection of sports cars. He and his son have started schools in many villages and now support 2500 students. His son goes to villages to speak to parents about the importance of educating their children, including their daughters. The Maharana entertained us on his terrace in one part of the City Palace, overlooking the lake.


Devigarh is a small village near Udaipur. We stayed in a palace overlooking the village and the fields, in a valley surrounded by mountains. A spectacular setting. The next morning, we were guided by a young man and numerous children through the village and surrounding fields, walking by a well where men were bathing and women were collecting water in large buckets. It was an opportunity to see local village life as opposed to the large cities where we’d been staying. The village is full of children, cows, goats, shops, old men talking, women doing laundry and cooking, young men arguing, and Hindu temples. The fields are irrigated from wells. Water buffalo provide the energy to pump the water and till the fields.

Back to Mumbai

Our last two days were back in Mumbai. We had two interesting visits there:

Meeting with Blackstone, private equity investors

We met with the managing director in Mumbai, who is from Rajasthan, but studied in the U.S. and has an MS in engineering from Stanford. He started his career at Trilogy Software with other Stanford alumni, then returned to India where he started a used car exchange. He has an MBA from Harvard. His wife taught at Stanford.

Blackstone opened an office in Mumbai 3 years ago. They had looked at a number of Asian countries and chose India because it’s a democracy with a very large market and a record of successful business exits. Their global fund is $21.7 billion, with $900 million invested in India over the last 5 years.

With Indian companies, there is a big need to professionalize management teams. Blackstone has 2 senior executives who help manage and guide the companies in their portfolio.

They own the largest number of hotel groups in the world, but have only 1 real estate investment in India. Since the recession started in 2008, India has lost 1 million jobs in the garment industry. The infrastructure is a big issue for Indian manufacturers. In 2007, it took 7 to 10 days to unload a container. During that time, the owner was paying freight charges, so it was very expensive.

In India, investors can’t use debt to buy shares of companies. So, they use offshore leverage, usually in Mauritius.

The awarding of contracts is 100% transparent for highways when it is controlled by the central government. A model concession agreement includes tolls and a 25 year term for the contract. The lowest bidder wins in an open bidding process. State governments have the same process, but can fudge bids and customize a bid to a company’s strengths. Most contracts are heavily sub-contracted. There are no union issues.

India had a $500 billion stimulus package, of which the largest component (25%) was power transmission, generation, and distribution. Roads were 10%, then ports and airports.

Indian capital markets collapsed in 2008, the worst market globally. In 2009, the markets were up 60%. The market is driven heavily by foreign institutional investors, who have huge impacts on the Indian stock markets.

The Indian railroad employs more than 1 million people. The British invested heavily in rail, giving India a huge grid.

The challenge of investing in India is that is it a “highly discovered market”. There are several very large cell tower companies with valuations that are too high. It costs $50,000 to build a tower. To buy that tower is $250,000. There are 550 million mobile subscribers, so there is not a lot of room to grow the market. Tops would be 750 million subscribers. India is now a voice only market, so the demand for data will be the growth engine.

Personal computer penetration is very low, about 30% in urban areas. Fewer than 5 million Indians use broadband. But India is a young country and young people are rapid adopters of technology. The social fabric of the country is changing as a result. Parents no longer know what their kids are doing or whom they’re talking to.

Indian exports are about 20% of the economy compared to China, where exports are 50%. GDP per capita is about $1200. An average middle class income is $5000 per year, for about 400 million people. Micro-finance is a powerful model to help the poor. Many micro-finance participants have loans from more than 1 provider.

India is still suffering from a brain drain and 25% of their tech university graduates leave the country. Still, more people are excited about staying in India as its economy grows.

Meeting with Saffron Art owner, Minal Vazirani

Minal lived in the U.S. most of her life. She and her husband founded Saffron Art, a very high end internet art auction gallery. They wanted to make the pricing of art transparent and increase access to art.

She described the 7 stages of modern Indian art, from the 19th century European school through the turn of the century resurgence of “Indianness” to contemporary, in which globalization is a constant theme.

Minal and her husband started Saffron Art in 2000 and had sales of $2.8 million that year. By 2006, their sales were $144.3 million, with a huge increase in volume and price. They have exhibited Indian art in major world cities, often the first time art patrons have seen Indian art. By 2007, Christy’s and Sotheby’s had also become interested in the Indian art market. Prices have fluctuated significantly since then, based on the world economy and art speculation (one client bought a painting for $36,000 and sold it 3 years later for $110,000).

Museum interest is now increasing in contemporary Indian art. Recently, Minal added jewelry in order to build an auction market in India and the region and to expand their auction categories. The business is technology driven. Bidders can use an I-phone, social media, any electronic medium to bid.

We spent one of our last nights in India singing and dancing with the patrons and waiters in the Taj Mahal coffee shop, thanks to a beautiful Indian singer who loves American pop and country and western music. As one of our colleagues said, “It was a trip full of fabulous sights, lots of laughs, great insights, treasured memories, precious friendships and just enough wine!”

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