India poised Make 2007 the year of India
Many of us grew up being told by our elders that if we didn’t shut our eyes and go to sleep within five minutes, Wee Willie Winkie would come through the grilled window and spirit us away. It’s politically unfashionable these days to instill such fear in children; child psychologists warn parents that their apparently harmless stories could leave young, impressionable minds scarred for life.
It’s ironic that the West, from where these treat-kids-with-kid gloves notions originated, is now trying to scare their children and grown-ups with stories of the near-mythical Indian (in the US, Indian now pretty much means us, not Red/Native/American Indian; and to some Americans, we probably look a lot scarier than the Apaches and Mohawks in Westerns).
American kids are routinely warned by their teachers that if they don’t take their science and math seriously, the Indians and the Chinese will beat them to the best colleges and jobs in America. (Recently, a bunch of students from an Ivy League college visited TOI, and one of the students freely admitted that her mother, a high school teacher, was using such scare tactics.) And it’s not just American kids who are being beaten with the Indian lathi—their fathers are being quietly bullied by employers into putting in extra hours without a murmur: either that or their jobs will move to India.
But honestly, while these stories help boost our egos, they’re part of a continuing storyline—just that with every telling, they gain momentum.
The real story of 2006 is that we’ve gone from thinking small to thinking big. At home, businessmen like the Ambanis have dreamed big, and backed it up with great execution. Also, individually, Indians have made a significant impact abroad. But collectively, we’ve been reticent about making a splash on the global stage.
Indian businessmen, notably providers of software and BPO services, built their reputation among cost-conscious American companies as suppliers of cheap and reasonably reliable labour. They undercut American competitors by squeezing out a dollar here, shaving off a few cents there. Once they had their chappal in the door, they began to upsell, offering greater width and depth of service.
But through all of this, the nature of the relationship between India and the West remained that of supplier and buyer. Then, about three years ago, Indian businessmen began to break the mould by venturing overseas to acquire companies. By 2005, the trickle had swollen into a spate. Still, deal sizes remained mostly modest: a hundred million dollars here, a couple of hundred there.
We’d like to believe we were prescient when we titled our front-page editorial on January 1, 2006 and our special 22-page pullout the same day ‘A Leap Year For India’. India and Indians have finally made that leap—of faith and finance. Lakshmi Mittal’s dramatic acquisition of Arcelor in the face of every possible odd, and his unquestioned dominance of world steel, is one more milestone in the rise of India as a global power—it doesn’t matter that he built his empire in foreign lands. Regardless of whether he considers himself 25%, 50% or 100% Indian, the one thing he has done is give Indian businessmen a large dollop of can-do confidence.
Ratan Tata may or may not have drawn inspiration from Mittal in boldly bidding for Anglo-Dutch steel giant Corus, but what is indisputable is that it underlines a dramatic shift not only in the Indian psyche but in the way the world views India. (A century ago, Jamsetji Tata’s steel aspirations were met with scorn, most famously by one Sir Frederick Upcourt, who pronounced, “Do you mean to say that Tatas propose to make steel rails to British specifications? I will undertake to eat every pound of rail that they make, if they do that.” Wonder if old man Upcourt ate steel or humble pie.) Even before the Mittals and Tatas, a growing number of Indian companies had begun acquiring entire blocks of transnational corporations with bids of $500m-to-$1.5bn.
Raising money is no longer a problem for Indian companies—the world’s top investment banks and private equity firms are lining up to give them billions of dollars. Across the globe, there’s acknowledgement that in addition to being smart, clever and hard-working, Indians also make brilliant entrepreneurs and managers, capable of running not just small and medium businesses, but the biggest of corporations in the toughest of conditions.
BIG ISN’T LARGE ENOUGH
We are at an inflection point: Suddenly, Indians are no longer scared to think big, act big. Our sense is that this just the beginning. You are likely to see more multibillion dollar bids out of India. There was a time when businessmen here would say, the Indian market is big enough, why do we need to go abroad? Suddenly, even the world is not big enough for Indian ambition.
There’s possibly a deeper, more subtle message in all of this: Indians appear to be becoming less risk-averse. Many of them are shedding their middle-class mindset and are becoming more adventurous—from the size of their home and car loans, to their choice of jobs, to the way they live their lives. Consider (a not entirely representative case): the Ruias of Essar are in a mouth-watering situation where they can sell their 33% stake in Hutch Essar and make some $6 bn in cash (about Rs 30,000 crore); yet they are prepared to turn their backs on that kind of crazy money and instead buy out their foreign partner Hutchison’s 67% in the belief that they’ll make even greater money later. Some might say they’re being foolhardy, even greedy, but you can’t deny that it takes a risk-taker’s mentality to play such a hand in a game where the stakes are heart-poundingly high.
It’s not just Indian businessmen, large and medium, who are flexing their recently pumped-up muscles. The BSE sensex has soared from 9500-odd points at the beginning of 2006 to 14000; multicrore salaries have become so common that they’ve ceased to be news; real-estate prices across the country are going through the roof; the Indian telecom market is the fastest growing in the world; our so-called B-cities are snapping up Mercs and churning out crorepatis faster than Delhi and Mumbai; and our GDP is expanding at a scorching 9% plus. If the optimists are to be believed, the economy could turn in double or near-double digit growth rates for the next decade. The logic is simple: conditions here are ripe for sustained explosive growth; it’s happened in China; why can’t it happen here? There are huge, huge differences between India and China, but a little bravado never hurt.
The nuclear deal with the US has only reconfirmed India’s status as an emerging superpower. The fact that Bush pushed so very hard for it, and that it sailed through the Senate without a debate and the House of Representatives with a landslide margin is a clear sign that America’s need to have India as an ally overrides bipartisan politics.
Combine our new-found economic and political clout with our increasingly influential diaspora and our status as a global soft power or superwower (from Bollywood and Indian art to yoga and spirituality), and Brand India is on a roll like never before.
Yes, 2007 could well be the Year of India.
Extracted from an Article in Times of India