Thursday, 03.27.08
India's One-Way Street
Photo by Flickir User Dave 7 under a creative commons license
Here’s a huzzah for the post-colonial purchase of the car brands of viceroys, district commissioners, and other pukka sahibs. And one for the visionary leadership of Ratan Tata, who has snapped up everything from Tetley tea to aerospace design companies in his successful effort to create a world class conglomerate. But spare me, please, the over-the-top headlines like “Indian Tiger Rides Jaguar,” or the quotes from Indian commerce minister Kamal Nath that “the most important thing is that world is recognizing India’s credibility.”
India would have a lot more “credibility” if Ford could turn around and buy Tata Motors as easily as Tata bought Jaguar and Land Rover. But it couldn’t—notwithstanding the reduced barriers to foreign direct investment in Indian manufacturing, a bid on Tata Motors would provoke a political outcry. And limits on FDI in other areas remain: foreign equity is capped at 26 percent in insurance companies, 74 percent in telecommunications, 49 percent in airlines, five percent in Indian banks (without the approval of India’s central bank), foreign accountants can’t be equity partners in an Indian accounting firm, etc. And that’s not even getting into politically sensitive sectors like agriculture, retail trading, railways, and real estate.
It’s nice that India’s global firms are coming of age. But most Indians (60 percent) still work in agriculture and live on less than $2 a day (78 percent). One of the best ways to improve their lives and their livelihoods would be to let in more foreign direct investment in off-limits sectors like agriculture and retailing. Till then, hold off on the champers and pink gin.
Tycoon TataThe Economist celebrates Ratan Tata as a brilliant yet humble innovator who has managed to turn a ramshackle family business into a leading multinational. |
Going southJames Surowiecki notes that Tata's acquisition reflects a broader shift of economic power to the world's big emerging markets. |
Gentle takeoverManjeet Kripalani writes that "the Indian giant has found a way to acquire companies across the globe—and still tread lightly." |
Global ambitionsClay Chandler says that "Indian companies are now building empires" across industries and continents. |
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I concur. India should open up post haste: in fact, as soon as Dubai Ports World is allowed to manage U.S. ports, as soon as Senator Obama (for whom The Atlantic is a noisy cheerleader) stops talking about renegotiating NAFTA, and as soon as the U.S. stops subsidizing ethanol from the Midwest and replaces it with the vastly more efficient Brazilian ethanol.
Don't hold your breath....
This author is clueless.
Does he even know who Boein, General Electic, Exxon Mobil and other american multinatioanls continue to monopolize markets everywhere?
Americans need to wake up to some harsh realities.
Your kids watch MTV and the nation is addicted to NFL, NBA, drugs, fast food, and britney spears.
China will within a decade take most of all blue collar jobs available in America today.
India will take all your white collar jobs i.e, engineering, design, accounting, finance, electronics, computers.
What will be left for american citizens??
Nothing, just a few rich barrons like murdoch, buffet, etc.
And a disappeared american middle class.
Get with times folks.
Yeah I remember how american congress went crazy, when Chinese oil firm tried to buy an American oil firm UNOCAL a few years ago...
This author has no idea what he is talking about.
Attempts to prevent ruthless american companies and chinese companies from dumping their goods into India, is the only reason barriers are but up.
Lets see the america sell its prime assets to china, no it wont.
Then forget hissy fitting on india, if you cant sell your prime assets to the chinese.
when america does so, then india will do so.
Until a few years ago Indian banks weren't allowed to invest in the US. How many branches do Indian banks have in the US and compare that with US branches in India? Also, Vodafone - a Britt company, acquired Hutch. What hue and cry did you hear?
These perceptions are old fashioned. Most of India has moved on...you should too
The issue for Ford, and all the Americans still yearning for lost glory, is how to survive in their own market - on their own turf. Very likely, they may end up selling out to Toyota or Honda, the way things have been shaping up for them for such a long time.
For the Tata's, Jag-Land Rover comes after the acquisition of Daewoo's truck unit in Korea and that of a top Spanish bus body maker, Hispano Carrocera. This is part of a process that has been ongoing for quite some time. The Tata's don't need to go to town about this, and they haven't either.
Pink gins would have been had at Bombay House in Mumbai - but quietly, and quickly. There's work to be done...I mean, who knows - a couple of years down the line, instead of Toyota or Honda it might be the Tata's that pick up Ford itself!!
And believe me, folks here would be very grateful - the Tata's don't lay off workers, unlike the super efficient American capitalist machine...
So, best of luck with your moaning ... hope it helps you sell a few more cars...
This author is one ignorant person.
He needs to research the justice department, united states congress, the sec.. and other ridiculous regulatory organizations in america..
which cry wolf every time a foreign owned entity tries to buy up american assets or businesses.
I mean if you dont believe, the rigidity of some of these dumb americans, turn on CNN and watch Lou Dobbs.
You will get a better idea where these isolate american protectionist mentality comes from.
America is gonna end up as a nation of a very fewe rich people... and everyone else working below minmum wage.
With these inward thinking lawyers who become politicians in america, they have no concept what their dealing with on a global scale.
The chinese are slowly but surely going to destroy the american middle class.
And today, the only americans who can compete with an indian brain are those children of recent immigrants, who are willing to work hard.
Americans have become complacent and lazy.
Watching E True Hollywood Story, Kim Kardashian, Reality TV, NCAA basketball etc etc.
I mean look at these states.
33 percent of Nasa is indian 1 out every 4 doctor in america is india. Indians are the highest income earning and wealthiest ethnic group in america.
Get with times. When you have a 10 year old kid in rural india, who can write a computer code, in his sleep and then you have the president of america, who cant even pronounce " internets" properly.
this author probably became a second rate journalist, because he failed calculus in college.
The author must be joking! Does any company exist in the west that has the guts to take over the Tata enterprise and run it as it is done now, I seriously doubt.
Mr.Cibney's report on the Tata takeover of Jaguar and Land Rover from Ford Motors reflects a view of India that is deep rooted in America. Both Mr.Cibney and Americans grew up on a rich media diet consisting of Mowgli, Mother Theresa and India's problems with population, poverty, pollution and Pakistan. News about India's reconstruction after Independence in 1947 did not travel as widely or as well on Mainstreet, Anytown USA.
The India = Poverty equation was estabished in the American mind during the Sixies and Seventies. Since the Eighties, this formula has grown into India = Poverty = Cheap labor = Outsourcing. The Tata takeover shakes up this formula. Suddenly Americans must make room in their India equation for Indian businesses with deep pockets.
So, it's not surprising that you have a fine reporter like Mr. Cibney offering his report on the Tata takeover and adding some unsolicited advice on when Indians should drink champagne. There's no need to get upset with him. He is just showing how ill informed he is about India picking herself up by the bootstraps.-
Mr Cibney has no idea that when the British finally packed their bags and left in 1947, after ruling India for 190 years, India produced less than 4000 engineers a year. He doesn't know that under British rule, Indians earned less than $5 dollars a year, 88 per cent of Indians were illiterate, India's economy grew at less than 1 per cent for 50 years between 1900 and 1947. He has no idea that under British rule, Indians at birth expected to live for 31 years. He doesn't know that under British rule, 8 million Indians perished in the famines of Bengal between 1942 and 1944. Nor does he know that it that 1 million Indians were killed when the British cut up their Indian empire.
Mr.Cibney doesn't seem to be any wiser about what Indians have achieved in the last 60 years. They produce over half a million engineers, they have over a third of the country able to read and write, that life expectancy at birth is now around 65 years. $2 dollar a day income in Independent India sure as hell beats $5 dollars a year when India was under British rule.
If he reads this long e mail, Mr.Cibney may better understand why Indians are celebrating the Tata takeover of Jaguar and Land Rover.
If the Tata takeover is advertising for India's companies, Mr.Cibney's report is advertising for the work that India and her friends in America need to do to update stereotypes held by Americans in general and American businesses in particular.
Business starts in the mind. American business people know that there are poor people in their European or Asian export markets. Yet they export in large volumes to them. Reports like Mr. Cibney's seve to confuse and scare American businesses from exploring markets in India. The net result is that American businesses are yielding sales and competitive advantage in India to their Israeli, Chinese, British Japanese, Korean, and Singaporean competitors.
Here's some unsolicited advice from me to American businesses - go check out markets in India for your products.
India is a country with 400 some million people below 18 years and some 840 million people below 49 years of age. India has a huge consumer market with a fondness for things American. There's now some 200 million Indians with cell phones. 8 million Indians get into the cell phone market every month. These are good estimates of people with money to spend. No one trades off food for cell phones.
If you are ignoring this market, ask yourself why? Do reports like Mr. Cibney's have anything to do with your business decisions? If yes, check out other sources of information on Indian markets like the Department of Commerce, US government, the US-India Business Council and Confederation of Indian Industry. One way to generate jobs in the US is to sell products overseas. For instance, any business that has anything to do with automotives in the US ought to be checking out India's automotive industry has fired up all cylinders as the Tata takeover of Jaguar and Land Rover shows. If you are supplying to Ford, there is no good reason why you shouldn't be supplying to the Tatas. And if you do end up supplying to the Tatas, there's more jobs for us, and Mr. Cibney will be writing differently.
TATA have aquired LandRover and Jaguar but tahey these deal are not much benefited for TATA because the deal are much costly and tata have to arrange the money so their debit will increase.
Hi,
James Gibney has got it exactly right. If you listen to most political discourse in India, the only reason a foreigner invests in India is for 'exploitation'. It is the ancient Communist mindset that equates profits with bloodsucking that operates even today in India's political class. Even politicians like (Prime minister) Manmohan Singh and (Finance minister) P. Chidambaram, who know better, occasionally talk this same talk. Hold off on the - domestically produced - champers and pink gin indeed!
Posted by Hemant Kumar | March 27, 2008 3:06 PM