Wednesday, February 22, 2006

India's foreign ambition

In the last one year, Indian companies have pursued aggressively buying out strategic assets worldwide and the rise of Indian entrpreneurship is a much more important aspect of Indian economy than the 8% growth rate of Indian economy. Forget about Mittal's $22b bid. There is much more goin in India.

Just look at these things:

1. VSNL - India's premier internet company bought Tyco for $130million (when Tyco had installed Optical fibre for whopping $3b in 2000 and then crashed) and again Teleglobe of Canada, last week and it wud be the third biggest international voice carrier in the world after AT&T and MCI. It has a significant presence in data communication too, and given its extensive optical fiber network and a ever-hungry 1 billion people Indian people market, it could become the No.1 telecommunications provider in the world, in the next few years.

2. Bharat Forge bought a host of companies in the last few years to become the second largest car parts manufacturer in the world. Half of its employees are qualified engineers and this can be used for a better leverage in the automobile industry.

3. Tata steel is busy competing with Mittal and other companies for world wide steel purchases and is in for huge expansion.

4. Dr. Reddy's bought a German generic drug manufacturer, three times its size.

5. Indian Oil Corporation and ONGC are busy competing with China, worldwide for oil assets.

There are atleast a dozen other top deals that wud make India topper in their respective fields. And there is always the software industry, where Indian companies try for a lion's share.

But, the most important thing wud happen when the companies grow beyond a certain threshold and can create synergies. IF VSNL, BSNL continues this growth they might increase the number of cellphones by tens of millions and this wud bring a great impetus to Indian electronics industry. And addition of hundreds of millions phones at very cheap calling rates can tremendously push entire state of the economy.

The rise of pharma major along with software majors can provide a huge catalyst for the biotech industry and once the melting point occurs between the aggressive pharama companies and software companies, we can create a huge bio-revolution dwarfing the info-revolution of the current era.

The rise in power of core economic industries like Reliance,ONGC, IOL in energy, Tata, Mittal in Steel and Tata in automobile industry can add the long-awaited crucial industrial revolution element in India and this would be a back-bone for the intense service sector.

Within 2 years a dozen airlines are starting up and India bought the highst number of planes in the world, last year worth more than $20b. Massive revolution in high-speed transportant would surcharge the Indian business.

The buyouts would give India, a more competitive face in the global industry from the image of cheap software writer and call center employees and would aid a further expansion of Indian owned industries in the west and elsewhere.

IF the current acceleration lasts, then in no matter of time India with its thousands of agile entrepreneurs will set the stage of 'Great Indian return' where the Indian economic climate would be red hot for agile Indian youngsters studying and working in US and Europe.

Let's see how China challenges our threat...

References:
International Herald Article

Yale Global Article

2 comments:

Hiren said...

Wonderful picture and nice article. It is true that India is making great economic strides but without a commensurate growth in infrastructure, we do not stand much of a chance. As for entreupreurs, one of my business friends recently told me that he found it demeaning to ask for payment with a begging bowl. In the US, there is a proper credit history of each person which cannot be flouted. In India, anybody can not make payments but legal procedure of redressal is too long.

Ramsaravana said...

Would like to say my 2cents worth
IOC n ONGC are just competing ,but these are yet to taste success on a global level..Thats primarily due to political interference..VSNL has acquired 2 loss making companies in TYCO n TELEGLOBE...Indian pharma isnot innovation driven..
I would like see an Indian company doing a LENOVO....

All said n done, I agree with u, we are certainly moving ahead...
the day when Indian companies indulge in multi billion dollar takeovers isnot too far