There is only a small window of opportunity vis-a-vis China

Updated: Nov 19 2005, 05:30am hrs
With its acquisitions of Federal Forge of the US, CDPs operations in Germany, and Imatra Kilstra of Sweden, Pune-based Bharat Forge Limited is already the second largest forging company in the world, and is now aiming for the top slot.

Baba N Kalyani, its Chairman & Managing Director, who recently received the Ernst & Young Entrepreneur of the Year Award in manufacturing, shared his views on globalisation of Indian corporates to Sourav Majumdar and MG Arun.

Why have Indian corporates increasingly been able to weave success stories in the global arena

There is big opportunity for Indian businesses globally, stemming out of qualities that are inherent in us like the entrepreneurial energy that is able dream big, the conviction to compete with foreign companies on their own turf, and to win, as well as transfer this energy to the people in our organisations so that they believe in it and follow it with passion.

Our entrepreneurs have the ability to absorb and use the best technology in the world. This surprises even those in the advanced countries who generally think that India uses low technology and high labour. Its actually just the opposite. We also have a unique ability to manage diversity.

We deal with so many difficulties in this country, be it the condition of our ports, the roads, material delivery, be it riots or floods. We are able to deal with all these effectively.

This experience should surely stand in good stead when Indian companies make global forays.

Yes. That is why we were able to acquire companies in Germany, Sweden and US and integrate them quickly into our system.

We can deal with diversity in terms of cultures, people, and markets, and understand those diversities and create a response that can deal with these diversities.

Which are the sectors that are offering the most opportunities

The IT, pharmaceuticals and manufacturing sectors are now the key. However, the next big opportunity is in infrastructure. Infrastructure is the key thing that is holding us back. Better infrastructure will lead to lower costs, which will make our companies more competitive, and enable them to capture more markets.

How will we overcome this critical barrier

There is a lot of discussion going on about this. There is now an extremely strong realisation in the government, and a consensus on the need to have better infrastructure. Funding is not an issue, since between private and public capacities to fund infrastructure, enough money would be available.

We have a big hangover of the past, and cannot shake off 60 years of socialism overnight.

What is your experience with China, where you have said you are entering

Chinese economy is 6-7 times the size of Indian economy, Chinese automotive industry is eight times our size, and growing. The $50 billion foreign direct investment that goes into China shows the global interest in that economy.

There is also a small window of opportunity, where for the next 5-7years, they will still lack the technological capabilities to do high tech manufacturing, which Indian companies have. We can leverage it to create a fairly strong presence in the Chinese market now, if we are physically present there. It is a good model to have two low cost manufacturing bases, in India and China, and a front end in the US or Europe, or other parts of Asia, where there are larger markets. By 2015, the Asian economy is going to be bigger than the European economy and you cannot neglect it.