Indian companies are investing more outside than foreign companies in India. Instead of the world globalising India, it is India that is now globalising the world
29-Nov-2006 •Jay Dubashi
Globalisation has turned the world upside down. We expected foreign companies to make a beeline to India and snap up every Indian firm in sight at giveaway prices. After all, foreign companies had all the cash in the world while Indian companies were going cheap.
But that is not what happened. Fifteen years after liberalisation, it is the Indian companies that are buying foreign firms now. Every day, you read about Indian companies, which, until a few years ago, were unknown outside the country, swallowing up foreign companies, many considerably bigger than themselves, as easily as sharks swallow small fish.
What is surprising is that many, like Corus Steel, gave in without a fight and seem positively relieved that they become part of Indian business groups like the Tatas. Ratan Tata now heads Corus, the first Indian to do so. I have a feeling that after the deal goes through, the company will drop the name Corus and will be known as Tata Steel, which is what it actually is anyway.
This is only the beginning. Much bigger things are in store for the future. If Tata Steel, which until recently, made less than four million tonnes of steel a year, can buy a British steel giant that makes four times as much steel, what is to prevent firm like Infosys Technologies, making a bid for IBM in, say, 10 years time and getting away with it? Or, for that matter, ONGC buying up Shell or BP (British Petroleum), both of which are not doing too well!
In fact, I won't be surprised if Tata Motors, a highly successful company, decides to make a bid for Ford Motors or General Motors, which have been ailing for some time and may be only too glad to jump on the Tata or some other Indian bandwagon, as Corus Steel did last month or Arcelor did (on the Mittal wagon) a few month ago.
Globalisation was not expected to do all this. It was supposed to bring in badly-needed foreign investment and give a spurt to the Indian economy. It has certainly given a spurt to the economy and also brought in foreign investment, but Indian companies are investing more outside than foreign companies inside the country, and this has messed up all the calculations. Instead of the world globalising India, it is India that is globalising the world.
I wonder whether we realise what is happening. The government certainly doesn't nor the so-called economics experts who think they know all about globalisation. Globalisation is not a one-way process. When capital starts flowing, it does so in all directions, from the west to the east and from the north to the south. But it also flows from the east to the west and from the south to the north. For investment is like water and when you open up the sluices, it flows everywhere and floods all the canals.
The fact is that you cannot keep India or Indians down. Liberalisation has released their energies, which were bottled up all these years by politicians who know no better. They made all kinds of excuses --- as the communists are doing now --- to keep us down and they did succeed. But now that the gates are up and the waters are flooding the countryside, there is little that the politicians can do. Corus and Arcelor are only the beginning. The world is an oyster and it is ours for the taking.