New York, June 7 (IANS) India is
still labelled an emerging market, but the Forbes magazine has argued
that the country's economy has already emerged. And as the economy
spreads its wings, its companies are turning to new international
markets, perhaps beginning a reverse imperialism.
For proof, the US business magazine lists not only the recent high
profile acquisitions by Indian firms, but also facts such as four of the
top 10 billionaires in the world are Indian, and that with an annualised
five-year total return of 42.2 percent, India comes second after Brazil
in terms of the growth of the world's largest public companies.
In comparison, the growth percentage in Britain and the US are 17.1
percent and 11.1 percent respectively, indicating that the balance of
economic power in the world is starting to shift, the magazine said in a
commentary piece in its latest issue Friday.
The reason for this reversal of fortunes is that for established
companies in the US and Britain it is difficult to grow as quickly as
those expanding from nothing, as is the case for start-ups in India.
During the 18th century, when the British colonised India and started
exploiting the subcontinent's vast natural resources and to expand
trade, tea became an important commodity and came to symbolise British
colonial rule.
In a case of reverse imperialism, Tata Tea, part of the diversified Tata
Group, bought Tetley, Britain's largest tea company, in 2000. Tata Tea
has since become the second largest tea manufacturer in the world by
volume, surpassed only by Unilever, based in London and Rotterdam.
This March, in another example of British brands being picked up by an
old colony, Tata Motors acquired Jaguar and Land Rover from Ford for
$2.3 billion. Tata Motors hopes the acquisitions will boost its ability
to be a "meaningful player" in the global market.
India's monetary muscle is strengthened by a cheap domestic labour
market and its companies' high price-to-earnings ratios, the magazine
quoted Tarun Khanna, a professor at Harvard Business School, as saying.
The author of "Billions of Entrepreneurs: How China and India Are
Reshaping Their Futures and Yours" added: "Unlike China where companies
are state- and government-led, in India, it is people's own money."
Now even smaller Indian companies are able to collaborate with bigger
counterparts in other markets - even those in other former colonies.
Last week India's biggest telecom firm, Bharti Airtel, called off merger
talks with South Africa's largest provider of cellphone service, MTN
Group, because of disagreements over the deal's terms.
Promptly, Reliance Communications, India's second largest telecom firm,
entered talks with MTN. The potential MTN-Reliance merger will result in
over 100 million customers, a network larger than that of AT&T, the
largest in the US.
The shared colonial past, actually, is an advantage for Indian
companies, Khanna told Forbes. "Imperialism is laying the seeds of
global chess with Indian companies naturally capitalising on their
shared history," he said.
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