India's Global Powerhouses: How They Are Taking On the World (review)

India's Global Powerhouses seeks to make its readers more informed about the still relatively nascent phenomenon of Indian private firms turning global or multinational. The authors' perceptions of the general historical background to the emergence of this trend in the last decade, the key features associated with it, and its long-term historical significance for the global economy, are outlined in the Introduction and in the first chapter. The variety of internationalization strategies being employed by Indian firms are emphasized with a number of case studies through nine chapters. The last chapter tries to outline some of the unique features in the behavior and conduct of Indian business firms in their roles as customers, collaborators, and competitors for Western firms. The Conclusion focuses on the challenges and hurdles in the path Indian firms have adopted to become established international firms. Apart from the use of case studies, the main notable feature of India's Global Powerhouses' research methodology is its heavy reliance on interviews of key Indian corporate personalities. No bibliography or list of references is provided, but from the notes one can infer that the written material consulted includes mainly articles from the business press along with a very selected set of academic writings. Documents of the companies studied, including their annual reports and financial statements, do not seem to have been systematically analyzed by the authors.

The authors draw a clear distinction between the limited Indian outward investment in the 1970s and the current trend of internationalization. The year 1991, when India's major liberalization program was initiated, is in fact seen as the watershed year for the latter. Till then, it is argued, the combined effects of Indian culture, British rule, and then the post-independence "socialist" policies held back Indian business firms. The disappearance of the sheltered environment after 1991, however, forced these firms into a decade-long process of restructuring to become globally competitive. The Indian economy too started growing rapidly, which bolstered the financial health of Indian firms, even as their access to foreign currency resources became easier. All of these, and the scale and cost advantages available to Indian firms from their base in a large and rapidly growing economy possessing a large pool of talent, set the stage for the internationalization of increasingly confident Indian firms. It is suggested that the locus of dynamism in the world economy is shifting from the West to the East, and that the eventual transformational impact of an increasingly dominant presence in the global marketplace of Indian and Chinese firms would be much greater than that of their German, Japanese, and Korean predecessors.

The authors conclude from the case studies that it is difficult to fit the internationalization strategies of different firms into a neat typology of strategies. Each of the cases studied exploited at least one specific dominant lever available to it, but these varied from case to case. However, they do suggest that some valid generalizations can be made about the internationalization process of Indian firms. Indian firms have typically sought assets abroad to complement their existing strengths and to hasten the acquisition of attributes necessary to be successful on the global stage. Consequently, they have favored acquisitions abroad, often in the advanced economies, and not disturbed too much the managements and setups of firms they have acquired.

The premises of the story presented by India's Global Powerhouses include many sweeping observations and generalizations about, and interpretations of, Indian history and its economy, society, and culture, as also of its corporate sector. These have not been derived from any systematic survey of the literature in these fields. To the extent that conclusions rest critically on such premises, a degree of circumspection in judging their merit is advisable. Particularly noteworthy amongst these is the drawing of a sharp dividing line at 1991. The general consensus in...