Special Report: India - Blazing a global trail

India's industrial conglomerates have overtaken process-driven prowess in the search for winners on the world stage.

by Khozem Merchant, World Business
Last Updated: 23 Jul 2013

India's mature bedrock of capitalism is finally throwing up global winners and they are sending an unambiguous message to foreign rivals: we can compete on cost and efficiency and we're no slouches on innovation, either. Software services companies introduced the world to Indian process-driven prowess, but IT has since been eclipsed by India's industrial conglomerates.

Restructuring has added efficiency and focus to lower costs, while reform has cut them loose in vibrant home markets brimming with confident middle-class consumption.

After years of domestic sloth, their goal now is to achieve global scale and competitiveness. Many of these giants are family behemoths, overhauled by a generation of younger leaders that believes it is at the cusp of a golden era for Indian capitalism. The first wave of forays abroad is well into its stride and the next stage is taking shape, with half a billion-dollar takeovers now normal. The Indian onslaught has made foreign targets firm up their defences, but although the bid by United Breweries Group, the world's second largest brewer, for French champagne house Taittinger was unsuccessful, it subsequently acquired Taittinger subsidiary Loire wine-maker Bouvet-Ladubay for $15 million. Below, we look at the stars of Indian industry.

- Khozem Merchant is Mumbai correspondent of the Financial Times.


The venerable automotive group has been steered into the fast lane of Indian business by vice-chairman and managing director Anand Mahindra (above). He is the third generation of the family to head the group and his style encapsulates the globally focused, entrepreneurial style of India's new generation of business leaders.

A string of manufacturing pacts with Renault and International Truck, and acquisitions in China have given definition to Mahindra's global ambitions, which he's been nursing for two decades since his days at Harvard. He argues that the 60-year-old conglomerate, which has sales of almost $3 billion, is no longer "safe" in its home market, where it is a leader in utility vehicles and tractors. "The global market is the only market," he says, pointing out that the six business segments, including infrastructure, consumer finance, property and technology, must earn a fifth of sales from overseas by 2008; the group-wide figure today is 1.5%.

Mahindra has grabbed his inheritance with gusto and created a professional management that is genuinely energised by its freedom to hunt, acquire and compete globally. That has allowed Mahindra to keep an eye on innovation and financial performance, and build a 'customer-centric' culture through the group. His leadership has been central in turning a sleepy inheritance into a dynamic business.


No Indian group has lived up to the mantra of globalisation more than Tata Sons.

The Mumbai conglomerate has dominant positions in information technology, automotives, steel and hotels; it has identified 14 priority country markets, and - via its IT champion, Tata Consultancy Services - is present in most of the developed world.

In the past three years, overseas sales have tripled to $6 billion, more than a quarter of total sales.

Although a family firm, launched a century ago and with a Tata always at the top, the group has been a consistent apostle of professional management.

Ratan Tata, the current chairman (above), trained as an architect in the US and in his decade at the helm has rolled out a genuinely brave vision (manufacturing passenger cars in the teeth of a recession), despite immense scepticism elsewhere.

Typical of this management is Tata Steel, where the efficiency gains have earned it the mantle of the world's lowest cost producer. Notable, too, is Tata's foray into emerging markets, such as South Africa, where its strategy of building a prominent presence has been followed by several other conglomerates. This has pushed along the group's broader globalisation strategy and at the same time strengthened Tata's emerging markets skills, such as distribution and, crucially, patience.


India's largest private-sector business is an awesome mix of ambition and achievement. Set up by the late Dhirubhai Ambani to trade in textiles, Reliance integrated backwards and has wound up as a global petrochemicals group. After a division of assets between the founder's two sons a year ago, Reliance Industries, which earned net profits of $2 billion in 2005-06, became the berth of Mukesh Ambani (above). By common consent, the Stanford-educated chemical engineer is unrivalled in his ability to think big, chase mass-market targets and execute ahead of time and budget.

In retail, Ambani is setting up a supply chain that delivers food from "farm to fork", as he puts it. With an investment of $5 billion and creation of half a million jobs, the project, says Ambani, "goes to the core of people's lives". Reliance also wants to build up a strong lead ahead of reforms that will permit foreign rivals to grow their presence in the Indian retail market.

In infrastructure-deficient India, Ambani's second bet touches on the very core of urban development - Reliance's proposed townships for Mumbai will be the largest in India. This year the company also revealed plans to build the world's largest single-location refinery; Chevron has become a strategic partner and they will jointly explore off India's north-west coast.


Bharat Forge is a model of export-powered manufacturing revival. In January, Baba Kalyani (left), chairman of the world's second biggest manufacturer of auto components, sealed the company's sixth global acquisition in four countries in six years.

With sales last year of more than half a billion dollars, Bharat Forge is confident of reaching parity with industry leader Germany's ThyssenKrupp by 2008. Kalyani understood early the implication of globalisation for a manufacturer of engineered products - and that understanding drove his overhaul of a rudderless company a decade and a half ago. When the explosion in demand for offshore outsourcing of auto-parts emerged, Bharat Forge was ready. Today, its three plants in Germany and one each in the US, the UK and Sweden account for two-thirds of group sales. The latest buy, in China, offers a second low-cost production base alongside India. Kalyani says the Chinese unit is where "we were 15 years ago - but China is a must for any serious manufacturer".

The fierce pace of acquisitions has forced Kalyani, part of the founding family, to focus on integration. Having controlled operations and strategy, the test now for this listed but family-controlled giant is to spread Kalyani's load by recruiting more external professionals.

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