Your heart must have puffed up a little last week, as mine did, on learning that the Tatas were acquiring Europe's second largest steel company, Corus, paying £4.3 billion. This is the biggest foreign purchase by an Indian company and will place Tatas amongst the Big Five of the world's steel-makers.
But it is not just the size of the transaction that makes it significant. In actuality it is a historical landmark. It proclaims the end of Europe's economic domination of the world which was made possible by its maritime superiority. It is the culmination of the process which began with Japan's victory over Russia in 1904, the political liberation of India in 1947, and the rise of communist China soon thereafter. It graphically demonstrates that Asia is in business again and is not a back number.
The acquisition of Corus is not the Tatas' first venture abroad, nor are the Tatas alone in seeking foreign pasturage. To name a few others, ONGC Videsh has taken over Ominex of Colombia for $425 million, Dr Reddy's has acquired Betapharm of Germany for $571 million, Videocon has bought Daewoo Electronics of South Korea for $684 million, Ranbaxy has bought Terapia of Romania for $324 million and Suzlon Energy has bought Hansen Transmission, Belgium, for $565 million.
The Tatas themselves have bought 21 companies over the last six years. The acquisition five years ago of Britain's Tetley Tea was widely noticed. Tata Tea has also made its presence felt in America by acquiring the food and beverage firm Energy Brands. But these 20-odd deals in all involved $2.8 billion. It is the magnitude of the Corus transaction that made it front-page news all over the world. It has been interpreted as proof that Indian entrepreneurs have "well-honed competitiveness, quality consciousness and human resource structures."
There is one more difference. A couple of months ago there was an even larger steel merger in which an Indian name figured when Mittal Steel took over the European steel giant Arcelor. But Mittal Steel is not an Indian company. Nor for that matter does Lakshmi Mittal's name figure in the long list of the heroes of India's economic regeneration, whereas Jamsetji Nusserwanji Tata is a name that wears a halo. What is remarkable is that the company has maintained its reputation over several generations, for Tata means not only Jamsetji but Dorab Tata, J.R.D. Tata, Ratan Tata and others as well.
The Corus deal brings back many memories of the battles that Jamsetji Tata had to wage. He was no political rebel. But he was an Indian who believed in India and asserted the right of Indians to carry on every legitimate economic activity. The colonial masters had an ambiguous attitude towards him. They heaped honours on him for his loyalty to them and for his philanthropy. But they were grudging in extending support to his proposals and initiatives.
Jamsetji Tata's dreams covered a wide field. Steel occupied a central place in his scheme for he knew that the whole edifice of a resurgent, modern economy rested on steel. He was convinced that India had the raw materials and the managers and manpower to manufacture quality steel at a lower rate than imports from Europe would cost. But the British business community and the civil service were lukewarm. Were they not guardians of the mystique of western superiority? They knew that the Empire would last only as long as the key to modern technology was kept in the masters' hands.
Typical of the attitude of the government was the comment made by Sir Frederick Upcott who presided over the fortunes of the Great Indian Peninsular Railway (GIP) which had its headquarters in Bombay. With withering sarcasm Upcott proclaimed his readiness to eat every pound of steel rails that Mr Tata could produce. Alas, Jamsetji Tata was not alive when his steel mill, which was set up with the help of American technical consultants, went into production in 1912. Where the uppity Upcott was at that time and what he did are not recorded.
But even during the First World War it was recognised that Tata Steel scored both in quality and in terms of cost of production. The Encyclopedia Britannica records that by the time of the Second War, the Tata Steel mill had become the largest in the British Commonwealth. The Encyclopedia adds cryptically that the company received no help from government. The drive came from within, from the extraordinary pains taken by the Tata organisation to maintain high standards of technological and managerial integrity.
This question of integrity assumes added importance in these days of globalisation. The high wage levels and the non-availability of trained manpower at home are inducing the high-wage industrial countries to get some parts of the work done in countries where wages are low. This is similar to the earlier practice of purchasing components from small manufacturers.
But the practice now is to farm out even basic operations, particularly those involving information technology, in which it is possible to maintain simultaneous coordination across countries and continents. Globalisation demands efficiency and promptness. Cost advantage is its basic raison d'être. Contractual obligations are likely to be of a shorter duration.
Ideology and sentimentality are both likely to receive less emphasis. What this means is that the habit of coming to special arrangements with some countries on the basis of allegiance to some political philosophy such as socialism or the neighbourhood principle will see a waning.
At the same time there will be an increase of geographical mobility among the young and the talented. National boundaries and allegiances will count for less. A new technomanagerial class is coming into being in which the ability to adopt and adapt swiftly to new procedures and possibilities is likely to be the supreme virtue. One can only hope that this new morality which rewards the bright fellow will have some place also for the slow-coach.
After decades of waiting, India is now accepted as a competitor in the Industrial Olympics. Indian managers and technological leaders will be seen in foreign lands more and more. The eyes of the world will be on them. Will they be content to be Brown Sahibs?
Or will they be tempted to play modern-day Haroun al-Rashids and try to impress the world by their lavish "oriental" life styles? Or will they be partners in an endeavour to ensure that globalisation will not mean a further accentuation of economic inequalities among nations and classes but the starting point of the search for a new humanity?
H.Y. Sharada Prasad was adviser to Prime Ministers Indira Gandhi and Rajiv Gandhi