Adapting Indian Industry to Globalization

Summary

Delivered on 19 July 2006 at the Forum of Free Enterprise’s Golden Jubilee in Mumbai and published as a 2007 booklet, Tarun Das’s address tracks Indian industry’s transit from the post-1947 ‘commanding heights’ regime to the open, competitive landscape of the mid-2000s. Speaking as Chief Mentor of the Confederation of Indian Industry, Das frames 1947–1991 as four decades in which ‘stringent controls, licensing and regulations with extensive micro management of the private sector’ preempted enterprise; 1991 onward then ushers in a continuous regime of competition, foreign capital, and globalised consumer markets in which Indian firms are expected to perform without protection.

The argumentative centre of the talk is that competitiveness has become an unending discipline rather than a milestone — ‘one can not say I am competitive and stop at that’ — and that Indian companies must move past the joint-venture model of the mid-1990s towards indigenous strength in technology, R&D, and corporate governance. Das catalogues the externalities Indian industry must now absorb (US interest rates, the Iraq war, the rise of China, global commodity shifts) and the rising non-tariff barriers in the West reacting to outsourcing and to Indian acquisitions abroad such as Tata’s Corus deal and Hindalco’s Novelis purchase. He calls for ethics and values to anchor the new corporate ambition, holding up the Tatas as a benchmark and identifying a domestic ‘crab mentality’ that pulls down pioneers.

A second register of the address attends to corporate social responsibility, employability, multinational workforces, and the still-pending liberation of food and agriculture from the controls already lifted from industry. Das closes optimistically on three engines — government ‘gradually getting out of the way’, Indian entrepreneurship coming of age, and India’s demographic youth — predicting manufacturing parity with China, R&D-led global emergence, and India as ‘the food factory to the world’.

The booklet wraps Das’s address with a 1956 Forum ‘A Manifesto’ creed of free enterprise and standard organisational matter — historical material reproduced from earlier Forum publications rather than authored by Das.

Key points

• Frames the 1947–1991 era as one of ‘stringent controls, licensing and regulations’ that preempted private initiative, contrasted with post-1991 liberalization that now requires Indian firms to compete without protection.

• Argues that competitiveness is a continuous, never-completed process — quality, productivity, cost control, and R&D must be sustained, not declared.

• Critiques the joint-venture model dominant before 1991 because foreign partners retained virtual control of technology; calls for Indian industry to build R&D and technology capacity on its own.

• Reads globalization as multi-directional: Indian firms acquiring abroad (Tata–Corus in the UK, Hindalco–Novelis in the US) while Western markets erect non-tariff barriers in response to outsourcing.

• Identifies a domestic ‘crab mentality’ that pulls down successful Indian pioneers, and urges adoption of Tata-style ethics and corporate values as a competitive moat.

• Reads CSR — community health, disaster response, training, HIV/AIDS programmes — as integral to globalized corporate citizenship, not optional add-on.

• Calls for deregulation of food and agriculture along the same lines as industry, predicting India will emerge as ‘the food factory to the world’ and as a global R&D destination.

• Anchors optimism in three forces: government withdrawal from operational economy, maturing Indian entrepreneurship, and a youth-heavy demographic (≈500 million under 30).