Pari's Blog

It’s a no brainer. Indian companies will be buying US, UK or German companies. We have to just go with them.”

- Morten Lund (founder of Skype, and nearly 50 other companies)

India has in 50 short years since its Independence risen (from the ravaged and impoverished state that it was left in by 300 years of European onslaught) into the worlds 4th largest GDP, and is the most self-sufficient country today. The country mass produces its own cars, buses, trains, ships, satellites, televisions,… right down to every paper and pencil. With the amount of revenue surplus India is generating, Indian companies have entered the next phase of reconstruction: buying foreign companies.

“Just into the second month of the year, India’s M&A (merger and acquisition) volumes are touching $50 billion. That’s quite close to the full-year 2006 volumes – $61.2 billion (inbound, outbound, and domestic). M&A experts reckon that before the year is out, India will easily hit the $100-billion mark.”

- BusinessWorld, 26-Feb-2007

Still, this deep source of low-cost, high-IQ, English-speaking brainpower may soon have a more far-reaching impact on the U.S. than China. Manufacturing — China’s strength — accounts for just 14% of U.S. output and 11% of jobs. India’s forte is services — which make up 60% of the U.S. economy and employ two-thirds of its workers. And Indian knowledge workers are making their way up the New Economy food chain, mastering tasks requiring analysis, marketing acumen, and creativity.

This means India is penetrating America’s economic core. The 900 engineers at Texas Instruments Inc.’s (TXN ) Bangalore chip-design operation boast 225 patents…. Venture capitalists say anywhere from one-third to three-quarters of the software, chip, and e-commerce startups they now back have Indian R&D teams from the get-go.

- BusinessWeek Online (The Rise of India)

Another notable news: India raised over $3.5 billion from NRI’s to offset the effect of economic sanctions imposed because of its nuclear tests back in 1999. This was done by scheme known as the India Resurgent Bond (launched by State Bank of India). Over 70,000 Indians invested in it. See full article.

Some Economic Facts

What is important to note here, in the list below, is that a large majority of these (especially the non-technical ones) are the result of traditional micro-economics, employing millions of individuals in hundreds of thousands of small individually owned businesses and not to mention over 21 million retailers (and this is not counting those that are not even licensed or incorporated).

This is why there is a legitimate opposition to the WalMart model of the Western retail industry from coming into India. It will not only destroy thousands of small businesses, but concentrates wealth in the hands of a few instead of distribution of wealth. As the father of economics  Chaanakya stated, it is the distribution of wealth that makes a nation strong, as it promotes the growth and productivity of the people (and no, we’re not talking about socialism, but capitalism done right). Which in itself is possible owing to India’s vibrant democracy with numerous political parties representing just about every interest group imaginable. It has its shortcomings, but it works. See for yourself:

1. The #4 largest GDP (purchasing power parity) (USA, China, Japan, India, Germany UK, Russia). India’s GDP is $2.966 trillion (2007 estimate).
2. The #1 largest tea producer (India, China).
3. The #1 largest mango producer (1.6 million hectares; versus 0.433 hectares of China).
4. The #1 largest banana producer (16.8 million metric tons; versus 6.7 metric tons of Brazil).
5. The #1 largest peanut producer (India, China; together they produce 70% of the worlds peanuts).
6. The #1 largest milk producer (India, USA, New Zealand).
7. The #1 largest ginger producer (India, China, Indonesia).
8. The #2 largest rice producer (129 million metric tons; China, India, Indonesia).
9. The #2 largest onion producer (China, India, USA).
10. The #2 largest potato producer (China, India, Germany).
11. The #2 largest silk producer (China, India).
12. The #3 largest cotton producer (China, USA, India).
13. The #3 largest sugar producer.
14. The #3 largest steel producer (Japan, South Korea, India).
15. The #1 largest railway network.
16. The #1 largest producer of buses.
17. The #2 largest producer of bicycles (China, India).
18. The #1 largest producer of movies (India, USA).
19. The #1 largest cell phone growth market (growing at a blazing rate of 6 million new cell phone users every month, 2006-07), expected to reach 500 million subscribers by 2010.
20. The #6 largest petroleum consumer (USA, China, Japan, Russia, Germany, India).
21. The top 4 Indian oil companies are on Fortune’s top 30.
22. Indian oil companies have been on a buying spree – acquiring oil contracts all across the globe.
23. India is the #1 oil contractor in Russia.
24. 34 Indian companies are listed on the Forbes 2000 list.
25. 9 major national passenger airlines that are world class in quality/services.
26. 4 major Indian car companies: Hindustan Motors, Mahendra & Mahendra, Maruti Udyog, Tata Motors.
27. The leading Indian car manufacture Maruti Udyog alone exports 30,000 cars and domestically sells 500,000 cars annually. Known for their exceptional fuel efficiency and durability in rugged terrains/roads and driving conditions.
28. There are 30 automobile companies with their manufacturing plants in India, including BMW, Ford, Honda, Hyundai, Mercedes-Benz, Mitsubishi Motors, Suzuki, and Toyota.
29. India has entered the competitive aero-space industry by launching satellites for a number of countries (see PSLV-C9).
30. India is the third nation to successfully send a rocket to the moon (after USA, Russia) (see PSLV-C11, PSLV-C11).

(updated November 2008)

See Also

• Outsourcing