Why are Indian brands not seen worldwide? | Why are Indian brands not seen worldwide? | Article by Shekhar Gupta
Shekhar Gupta Editor-in-Chief, ‘The Print’ Twitter @ShekharGupta5 days ago
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The Adani controversy also draws our attention to some relevant aspects of India’s political economy. The first of these is that the opposition alleges that the government is practicing ‘cronyism’, i.e. favoring its cronies. If we look at the details, four-five major leaders of corporate India will also come under this ambit. You can add Ambani, Tata, Birla, Vedanta to this list. They have three things in common.
The first is that they are all heritage or family-controlled enterprises. Reliance and Birla are empires built by previous generations. Vedanta and Adani are enterprises owned and directly controlled by the first generation founders. The numbers of how many family members control their major businesses vary, with Adani at one end and the Tatas at the other. Another thing is that most of these businesses are in areas where the shadow of the government is large and decisive. These are sectors that are subject to strict regulation and are often (especially in Adani’s case) monopolistic by definition – be it Mumbai airport or power distribution business or Mundra port or large power generation projects with power purchase agreements. This also applies to concessions in the case of oil refining and telecommunications, mining, oil wells. Direct and detailed communication with the government is crucial in all these cases. Third, none of them actually have a global Indian brand. The Tatas may object to that, as they own the Taj Hotel and now Air India has come to them. But, I will humbly say, Taj is still not a brand that will amaze the world. A lot has to be done to bring Air India back to its former glory. A major reason for criticism of Adani is its closeness to the government, especially the importance of working with the government for its core businesses. If running a port on India’s coast is a completely government-controlled business, you can’t even buy port assets abroad unless the government backs you. Now whether it is right or wrong is not the question. When a debate is divided into two factions, it is called ‘cronyism’. E.g. The Congress says that the government is pursuing a foreign policy that benefits its own allies. Another side might say that the government needs to work with India’s powerful business groups to survive overseas competition as China expands aggressively. Similarly, India is including airports, highways, railways, tunnels, metros. You will need companies with big wallets and big balance sheets to build all this infrastructure. Will you wait for companies like ‘Backtel’ (an American company) or get it done by a group of Indian companies? No company can do all this without working with the government.
This government-corporate ‘collaboration’ has not started since the Modi government came in. It was during the UPA government that the Adani Group was awarded several major licences, contracts and environmental clearances. They can say that they did all this with the utmost impartiality by conducting the necessary inquiries and giving a level playing field to the contestants. But the reality is that in developing economies—where infrastructure is in great demand—there are many areas where private capital and government must work together. We have discussed the Adani case in detail, as it is still the subject of many controversies. All these churches are doing most of their business in India and in areas that cannot escape the government shadow. Most of their earnings are domestic. There are some exceptions like Tata’s software business.
To understand this better let us take the example of Dhamra port on India’s vulnerable eastern seaboard. The Tatas built it under great difficulty, especially in the face of opposition from environmentalists whose voices were most heard in the UPA. However, it was given legal recognition only during the UPA. It was delayed, because the top leaders of the government were wise enough to understand the need for another efficient port in the east despite their love for the environment. But, the failure of super powerful Indian corporates to build global brands is disappointing. Many Indian companies are known as powerful brands in other countries, especially in the business world – Tata, Reliance, Vedanta. And some companies of group companies – eg. TCS, Infosys, Wipro, HCL. But, no one has given such a product brand that has taken the world by storm. India has a completely indigenous car, two wheeler, no software or operating system, no perfume or drink. We are collecting all kinds of products with ‘GI’ tag, but no such brand is seen in shops all over the world.
China and Korea have produced half a dozen brands Corporate India has not been able to offer any garment brands and what its factories are manufacturing and exporting are sold under the labels of international store chains. Of course it’s a big deal that India is now making a lot of mobiles for export, but no Indian name brand. The Chinese and Koreans, on the other hand, have spread half a dozen brands, dominating global markets.
(These are the personal views of the author.)