The World is waking up to a New India

Centered in the middle of India's tri-colour flag is a wheel that originally symbolized the village-level pursuits by which India's founder, Mahatma Gandhi, believed his people could best enjoy spiritual health.

Gandhi's spinning wheel was replaced in 1947 by one that represents motion and change. Though it took more than a half-century, in the 60th year of its independence the life Gandhi espoused has given way to the new economy shaping India.

India's economic liberalization in 1991 sparked fears that the country would be overrun by foreign multinationals. However, Indian companies have not only managed to fight off competitors on their home ground, they also have taken the commercial battle abroad.

The surge in Indian acquisitions has not occurred within a vacuum. A combination of economic, political and institutional factors has created a more conducive environment for overseas acquisitions.

Our connected world has dramatically broadened the horizon of available resources and new markets for individuals and organizations large and small. Until now, India's contribution to globalization has been the emergence of the knowledge outsourcing sector fuelled by multinational and Indian firms tapping our country's massive, English-speaking workforce, including the newly minted skills of the hundreds of thousands of university graduates in engineering and IT that India produces every year. Knowledge outsourcing has been a huge growth factor in India's economy over the past decade, accounting for one-third of the 53.8% of GDP attributed to services overall. Businesses in developed nations have benefited tremendously from this initial wave of globalization, gaining significant cost and process efficiencies by partnering with Indian services firms.

India is now redefining globalization. Today, Indian companies across several industries are expanding their vision and presence beyond their own borders to open new markets and deliver new and innovative strategies, processes, and business models to fellow developing nations and already mature markets alike.

In six years, India's red-hot economy has grown by $350 billion (USD) - the size of the Netherlands' GDP - and is poised to overtake Britain's within a decade, according to a Goldman Sachs report. The International Monetary Fund predicts India's economy, which for five years has posted annual growth of 7 to 9 per cent, will be larger than that of the U.S. by 2050!

The uncertainty and speculation are over. India's Tata group acquired the Jaguar and the Land Rover brands from Ford at a price estimated to be $2.3 billion. Though unrelated, only recently did another Tata group company, Tata Chemicals, announce the acquisition of another US-owned company, soda-ash producer General Chemical Industrial Products, for $1 billion.

Coming as they do after Mittal's acquisition of Arcelor, Tata's acquisition of Corus, and a spate of Indian acquisitions in IT, hospitality and pharmaceuticals, the latest announcements seem to suggest that India is indeed an economic power to reckon with and perhaps more importantly, that Indian business leaders are moving away from a risk-averse mindset to an aggressive globe-conquering attitude with confidence.

Indian-led mergers and acquisitions are on the rise, leading to dramatic growth and improved competitive position. According to Dealogic, Indian firms have already announced over 30 foreign takeovers in 2007, worth more than $10.7 billion in all - and last year's tally added up to $23 billion.. Indian companies are making their presence felt by taking lead positions in industries previously dominated by firms in developed nations.

Many Indian companies are seeking to expand their distinctive capabilities by acquiring specific skills, knowledge and technology abroad that are either unavailable or of inadequate quality at home. Sun Pharmaceutical Industries, for example, acquired Able Laboratories Inc of New Jersey for US$23.15 million in December 2005 to gain its in-house manufacturing and development capabilities for generic pharmaceutical products.

Indian companies are also using mergers and acquisitions to assimilate technologies that have been tried and tested abroad. i-Flex, for example, the software company based in Mumbai, recently paid US$11 .5 million for the US company Supersolutions Corp5 to access technology that is widely used in US banks.

Encouraged by visibly successful deals around the world, Indian businesspeople are thriving in an environment where their entrepreneurial zeal and enthusiasm is being recognized globally. Names like "Ranbaxy" and "Mahindra and Mahindra" are no longer only familiar to industry insiders. They are global brands, making waves on global markets.

India has joined China on the agendas of multinational boardroom strategy meetings and conferences around the world, and no longer simply as an outsourcing or investment destination. This confidence is not restricted to India's large companies with many smaller firms also taking to the global marketplace. The entrepreneurial reputation of Indian businesspeople is now visible to more and more companies around the world as Indian firms of all sizes reach outside their traditional borders to discover the new opportunities on offer.

More importantly, India is driving innovation tailored for emerging economies with limited infrastructure to other nations like itself, rather than attempting to adapt existing processes or business models born in an entirely different context. For example, Tata Motors -- part of Tata Group, India's largest conglomerate - decided in the early 1990s to diversify from its heritage as India's largest commercial vehicle maker into the passenger car market, building the first completely indigenous Indian car. Tata Motors is now completely redefining the cost structure, production and distribution models for car manufacturing in order to design and deliver the world's most affordable car, with a target price of Rs. 1 lakh, or approximately $2,500 bringing car ownership within the reach of a large percentage of Indian citizens-and other people like them across the developing world- for the first time (the current ratio in India is only seven cars per 1,000 people). Innovative new materials and production processes have enabled the company to "outsource" the assembly of the vehicles to small local franchises and roadside garages, providing new business opportunities to eager entrepreneurs throughout the country. The local Tata franchise won't just service the vehicles-they will actually build them as well.

There is no doubt that India will continue to innovate with technology, and leapfrog technology where required. One can only imagine India's contributions to the world-and the world economy-in the coming years as its economy continues to mature.

By:Ashok Bhagnari-President Z-Axis Consulting

Z-Axis Consulting specializes in local and International Business consultancy, Marketing and Sales promotion, Export and Import Management and training.
Ashok Bhagnari, President
Z-Axis Consulting
10486 155 Street
Surrey, BC. VR3 4K3
Canada
Email: bhagnari@shaw.ca
www.z-axis consulting.com