In the past decades, India has been world number one in starvation deaths, foreign aid and bribery. In the 2000s, it was transformed from a
chronic under-performer to a potential superpower. Here are eight predictions of what it will look like in 2020:
India will overtake China as the fastest-growing economy in the world. China will start ageing and suffering from a declining workforce, and will be forced to revalue its currency. So its growth will decelerate, just as Japan decelerated in the 1990s after looking unstoppable in the 1980s. Having become the world’s second-biggest economy, China’s export-oriented model will erode sharply — the world will no longer be able to absorb its exports at the earlier pace. Meanwhile, India will gain demographically with a growing workforce that is more literate than ever before. The poorer Indian states will start catching up with the richer ones. This will take India’s GDP growth to 10% by 2020, while China’s growth will dip to 7-8%.
India will become the largest English-speaking nation in the world, overtaking the US. So, the global publishing industry will shift in a big way to India. Rupert Murdoch’s heirs will sell his collapsing media empire to Indian buyers. The New York Times will become a subsidiary of an Indian publishing giant.
In the 2000s, India finally gained entry into the nuclear club, and sanctions against it were lifted. By 2020, Indian companies will be major exporters of nuclear equipment, a vital link in the global supply chain. So, India will be in a position to impose nuclear sanctions on others.
India, along with the US and Canada, will develop new technology to extract natural gas from gas hydrates — a solidified form of gas lying on ocean floors. India has the largest gas hydrate deposits in the world, and so will become the biggest global producer. This will enable India to substitute gas for coal in power generation, hugely reducing carbon emissions and making Jairam Ramesh look saintly.
India will also discover enormous deposits of shale gas in its vast shale formations running through the Gangetic plain, Assam, Rajasthan and Gujarat. New technology has made the extraction of shale gas economic, so India will become a major gas producer and exporter. Meanwhile, Iran’s mullahs will be overthrown, and a new democratic regime will usher in rapid economic growth that creates a shortage of gas in Iran by 2020. So, the Iran-India pipeline will be recast, but in reverse form: India will now export gas to Iran.
More and more regions of India will demand separate statehood. By 2020, India will have 50 states instead of the current 28. The new states will not exactly be small. With 50 states and a population of almost 1.5 billion, India will average 30 million people per state, far higher than the current US average of 6 million per state.
China, alarmed at India’s rise, will raise tensions along the Himalayan border. China will threaten to divert the waters of the Brahmaputra from Tibet to water-scarce northern China. India will threaten to bomb any such project. The issue will go to the Security Council.
Islamic fundamentalists will take over in Afghanistan and Pakistan. The US will withdraw from the region, leaving India to bear the brunt of consequences. Terrorism will rise in India, but the economy will still keep growing. How so? Well, 3000 people die every year falling off Mumbai’s suburban trains, and that does not stop Mumbai’s growth. Terrorism will bruise India, but not halt its growth.
Life began for Ratan Tata in 2000. That year, Tata Tea acquired Tetley of the United Kingdom. This was the first major acquisition of a global brand by an Indian company.
Four years later, it was Tata Motors' turn -- it bought the heavy vehicles business of bankrupt Daewoo Motors in South Korea. Next year, Tata Steel acquired NatSteel in Singapore. All of this paled into insignificance in 2007 when Tata Steel bought Anglo-Dutch steel maker Corus for $12 billion. It made Tata Steel the fifth largest steel company in the world.
A year later, Tata Motors became the new owner of marquee brands Jaguar and Land Rover after it paid Ford $2.3 billion. The crowning glory came in 2009 when he launched an ultra-low-cost car, the Nano. Not bad at all.
The decade that draws to an end will go down in history as the one in which Indian business spread its footprint across the globe. Strong economic growth till 2008, which was driven by domestic consumption, had filled the coffers of most companies.
The flow of global capital had taken the stock markets to new heights, which made Indian businessmen rich beyond compare. The list of Indian billionaires had become long. They had the money to buy assets that were on the block. Click NEXT to read on further. . .
Tata Group chairman Ratan Tata.
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Bhupesh Bhandari India Inc entered the 21st Century more confident and more competitive. Many of the previous decade's top ten were not even around a decade earlier. In this era of change few thought in year 2000 that by 2010 Ratan Tata would continue to head any list of high performers. He did!
Life began for Ratan Tata in 2000. That year, Tata Tea acquired Tetley of the United Kingdom. This was the first major acquisition of a global brand by an Indian company.
Four years later, it was Tata Motors' turn -- it bought the heavy vehicles business of bankrupt Daewoo Motors in South Korea. Next year, Tata Steel acquired NatSteel in Singapore. All of this paled into insignificance in 2007 when Tata Steel bought Anglo-Dutch steel maker Corus for $12 billion. It made Tata Steel the fifth largest steel company in the world.
A year later, Tata Motors became the new owner of marquee brands Jaguar and Land Rover after it paid Ford $2.3 billion. The crowning glory came in 2009 when he launched an ultra-low-cost car, the Nano. Not bad at all.
The decade that draws to an end will go down in history as the one in which Indian business spread its footprint across the globe. Strong economic growth till 2008, which was driven by domestic consumption, had filled the coffers of most companies.
The flow of global capital had taken the stock markets to new heights, which made Indian businessmen rich beyond compare. The list of Indian billionaires had become long. They had the money to buy assets that were on the block. Click NEXT to read on further. . .
Image: Tata Group chairman Ratan Tata.
Photographs: Reuters
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Reliance Industries got even bigger in 2002 when it announced India's biggest gas discovery in the Krishna-Godavari basin.
That year it acquired Indian Petrochemicals Corporation and merged Reliance Petroleum to become the country's largest company in the private sector. RIL entered the Fortune 500 list two years later.
In 2000, Reliance Industries' assets were worth Rs 50,000 crore -- not small by any standard. Today, the assets are worth Rs 2,45,706 crore. The revenue of the unified Reliance Group stood at Rs 21,541 crore in 2000. In 2008-09, in contrast, Reliance Industries clocked a turnover of Rs 1,39,269 crore.
Image: Reliance Industries chairman Mukesh Ambani.
Photographs: Reuters
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But the decade's big story for the Ambani family was sibling rivalry. Anil, the younger of the two Ambani brothers, accused Mukesh of usurping the family stake after the death of patriarch Dhirubhai in July 2002.
It turned out to be a no holds barred fight, which should come to a head early in the New Year in the nation's Supreme Court. In the settlement of 2005, Mukesh retained control of the oil & gas and petrochemicals business, while Anil got power and telecom.
Mukesh has since then diversified into retail, while Anil has taken strides in entertainment -- he acquired Adlabs and Steven Spielberg's Dreamworks studio. The Reliance business empire thus looks very different from ten years ago.
Image: Reliance founder late Dhirubhai Ambani (seated), with his sons Mukesh and Anil (right).
Photographs: Reuters
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Hindalco, of the Aditya Birla Group, bought Canadian aluminum maker Novelis for $6.4 billion.
Suzlon, set up in 1995 by Tulsi Tanti and now the world's third-largest wind energy company, shelled out $525 million for Hansen Transmissions of the Netherlands and $1.6 billion for REpower of Germany.
Vijay Mallya downed Scottish whiskey maker Whyte & Mackay for close to $1 billion. Dr Reddy's paid over $500 million for Betapharm of Germany, Ranbaxy $324 million for Terapia of Romania.
There were numerous other buys across the world in telecom, engineering, financial services, FMCG, information technology et al. In addition, Indians began to get plum projects. GMR bagged a $2.57 billion project to modernise an Istanbul airport. Indian business, in short, acquired a global spread.
Image: Aditya Birla Group chairman Kumaramangalam Birla.
Photographs: Rediff Archive
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Almost 530 million Indians own a phone now and Bharti Airtel has grown to cater to a 110 million of them. It has a 24 per cent share of the GSM mobile phone market, though its share of revenue is 31.8 per cent.
This clearly shows that the company has moved up the value chain -- it has managed to acquire better customers than rivals. Airtel, surveys have shown, is the second most-admired Indian brand after state-owned Life Insurance Corporation.
The company wants to take it to the top slot as quickly as possible.
Growth of homespun information technology companies has been no less spectacular.
Image: Bharti Airtel chairman Sunil Bharti Mittal.
Photographs: Reuters
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The big three -- TCS (Tata Consultancy Services), Infosys and Wipro --all earn over a billion dollars in revenue every quarter.
From a few thousand at the turn of the last decade, TCS has on its rolls 143,000 men and women in 42 countries. Infosys employs 105,000 people in its 50 centres spread across India, China, Australia, the Czech Republic, Japan, Poland, Canada and the United Kingdom.
Wipro has 95,000 people in its 50 centres across the globe -- it is the world's largest independent provider of research and development services. These companies have used the organic as well as inorganic route to growth.
Image: Former TCS chief executive officer S Ramadorai.
Photographs: Reuters
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It was a paradigm shift. Businessmen were no longer ashamed of selling off their businesses. It came to be known as unlocking value.
Apart from Ranbaxy, quite a few other Indian pharmaceutical companies changed hands during the decade -- Matrix Labs, Panacea Biotech and Dabur Pharma.
In other sectors, Gujarat Ambuja was sold to Holcim, Shaw Wallace breweries to SABMiller and distilleries to Mallya, and Maruti Suzuki became a subsidiary of Suzuki Motor Corporation. It became a long list. Investment bankers say more iconic names will be sold in the years to come.
Image: Malvinder Mohan Singh who sold Ranbaxy to Daiichi of Japan.
Photographs: Rediff Archive
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This was also the time Indians began to innovate their business model. Take ITC, for example. It was in the 1990s a largely cigarette company. But YC Deveshwar, who took over as the company's chairman in 1996, was quick to realise the need to spread the risks.
Tobacco was hardly a sunrise business. As it was not a "public good", the government was always ready to increase the taxes. So, the company expanded its hotel and paper business, and, more important, made a big splash in FMCG -- from personal care to snack food, stationery, lifestyle retail, matches and even incense sticks.
This part of the business has grown from Rs 109 crore in 2002-03 to Rs 3,014 crore in 2008-09. It was the first to seize the opportunity in the rural markets when it set up e-choupals which dispensed market-related information to farmers.
Image: ITC chairman Yogi Deveshwar.
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The decade will always be remembered for the way Indians bought, shopped and banked. There was a virtual credit explosion -- people bought everything from automobiles to homes and even a pair of jeans on installments. Credit card numbers recorded a huge jump. Banks automated rapidly and sold more than just deposits and lockers.
Such a strategy helped ICICI Bank race past all banks in the sweepstakes, except State Bank of India. In the early parts of the decade, it brought its wholesale and personal banking operations under one roof.
This gave it added muscle. It was at the forefront of installing ATMs (automated teller machines) across the country, which cut the queues in its branches and therefore improved service standards. It went aggressive on credit cards, personal loans and cross-sold products to depositors -- life insurance, automobile finance, housing loans, advisory services etc.
It made Indian banks rethink their business model, including SBI. Its assets stood at $77 billion in June 2009, up from around $3 billion ten years ago.
Image: ICICI Bank CEO Chanda Kochchar.
Photographs: Reuters
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ICICI Bank's counterpart in retail was Kishore Biyani. The unassuming Marwari from Mumbai first got into organised retail with the Pantaloons family store in 1997. This was followed in 2001 with the launch of Big Bazaar, a hypermarket format that democratised shopping in India.
It blended the look, touch and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality. Supply chain expertise did not exist in India.
Biyani built it from scratch. When commodity prices shot up to unheard of levels in 2007 and 2008, he held on to his prices. His people in the store wore T-shirts that said "Garv se kaho hum kanjoos hain" (Say with pride we are misers).
When large FMCG companies didn't agree for higher margins, he stopped stocking their merchandise -- such was his clout. With his large scale of operations, he always paid the lowest rent in the industry. He introduced the concept of store brands or private labels in the country.
Big Bazaar was followed by a number of other formats including Food Bazaar, Central and Home Town. He also diversified into finance, logistics and media. In between, he even wrote a book which was aptly titled "It happened in India".
Image: Future Group chairman Kishore Biyani.
Photographs: Rediff Archive
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