From the Economist:

A growing Indian empire
Oct 20th 2006
From Economist.com

Tata Steel�s $8 billion purchase of Corus, an Anglo-Dutch rival, says much about consolidation in the steel industry and about India�s acquisitiveness

WHAT a difference a year makes. In 2005 Tata Steel, India's largest private-sector steelmaker, was an industry minnow ranked as only the 56th largest steelmaker in the world, by production. It was a likely meal for bigger fish to swallow. Now, after striking an $8 billion agreement to take over Corus, a much larger Anglo-Dutch rival, it is poised to become the sixth largest such firm on the planet, with a likely annual output (judging by last year�s performances) of some 22.6m tonnes.

The deal was announced on Friday October 20th, with the two firms pledging to complete by January, leaving time for a possible�though some say unlikely�rival bid for Corus to emerge. For Tata it represents a significant triumph in a fragmented industry that is fast consolidating. Analysts who monitor the big metals and mining firms, where there has been a frenzy of activity in recent months, increasingly classify companies as either �hunter or hunted�. Mittal Steel (a Europe-based firm run by an Indian tycoon, Lakshmi Mittal) has devoured Arcelor, a Luxembourg-based steelmaker, for $32.2 billion, and is easily the world's biggest steelmaker. Consolidation in the steel industry seems to be the result of firms seeking more leverage over the few global suppliers of the raw materials (iron ore and coking coal) for making the metal.

The expansion of Tata is also a reflection of a rapid growth in confidence among Indian firms. This deal is by far the largest foreign purchase ever made by an Indian company. Corporate India has matured dramatically since 1991, when reforms cut away bureaucratic controls and encouraged the creation of a more competitive marketplace. Tata Steel is emblematic of the successful parts of Indian manufacturing and is known as the lowest-cost producer in the world.

Indian companies are in an expansive, acquisitive mood. So far this year Indian firms have announced 131 foreign acquisitions, with a total value of $18.7 billion, a huge increase on previous years, and much more than foreign firms have invested in Indian purchases.

The shopping spree spans industries from information technology (IT) and outsourcing to liquor. Wipro, for example, one of the country's big three IT firms, has this year acquired technology companies in Portugal, Finland and California. In pharmaceuticals Ranbaxy, an Indian maker of generic drugs, bought Ethimed of Belgium and Mundogen, the Spanish generics arm of GlaxoSmithKline.

Bharat Forge, the world's second-biggest maker of forgings for engine and chassis components, based in the Indian city of Pune, has since 2004 bought six companies in four countries�Britain, Germany, Sweden and China. Suzlon, another Pune firm, which makes wind turbines, this year bought Hansen, a Belgian gearbox-maker. And United Breweries, a booze conglomerate from Bangalore, has made an unsolicited bid for Whyte & Mackay, a Scottish whisky distiller.

Behind this push overseas lies a combination of forces: a domestic boom; the availability of credit; a rush to achieve global scale; and a new self-confidence about Indian business's ability to add managerial value. India's economy is in its fourth successive year of growth at around 8%. In the first two quarters of this year GDP grew at rates of 9.3% and 8.9% respectively over the same periods in 2005.

What is noteworthy about many of the firms is that the root of their success is not India's obvious competitive advantage: its vast, low-cost labour force. In the IT and outsourcing industries, lower salaries for college graduates are an important reason behind Indian firms' rapid growth. But in manufacturing the stars tend to be experts in automated, capital-intensive production. Bosses who have flourished in such businesses in India, with its poor infrastructure and still-daunting regulatory environment, understandably feel confident that they have lessons to teach their new purchases in other countries.

One more, and hopefully, this time the link works as intended :)

India'sacquisition spree
Circle the wagons
Oct 12th 2006 | DELHI
From The Economist print edition

The Indians are coming—to buy Western companies

INDIAN companies are in an expansive, acquisitive mood. For proof, one need look no further than the confirmation from Tata Steel, India's largest private-sector steelmaker, that it is mulling a bid for Corus, a much larger Anglo-Dutch rival. If the deal came off, it would be worth several billion dollars, by far the largest foreign purchase ever made by an Indian firm. In the first three quarters of this year Indian companies announced 115 foreign acquisitions, with a total value of $7.4 billion, a huge increase on previous years, and almost as much as foreign firms have invested in Indian purchases (see chart).

The shopping spree spans industries from information technology (IT) and outsourcing to liquor. Wipro, for example, one of the country's big three IT firms, has this year acquired technology companies in Portugal, Finland and California. In pharmaceuticals Ranbaxy, an Indian maker of generic drugs, bought Ethimed of Belgium and Mundogen, the Spanish generics arm of GlaxoSmithKline.

Bharat Forge, the world's second-biggest maker of forgings for engine and chassis components, based in the Indian city of Pune, has since 2004 bought six companies in four countries—Britain, Germany, Sweden and China. Suzlon, another Pune firm, which makes wind turbines, this year bought Hansen, a Belgian gearbox-maker. And United Breweries, a booze conglomerate from Bangalore, has made an unsolicited bid for Whyte & Mackay, a Scottish whisky distiller.

Behind this push overseas lies a combination of forces: a domestic boom; the availability of credit; a rush to achieve global scale; and a new self-confidence about Indian business's ability to add managerial value. India's economy is in its fourth successive year of growth at around 8%. In the first two quarters of this year GDP grew at rates of 9.3% and 8.9% respectively over the same periods in 2005.

Research into 127 Indian companies by Motilal Oswal, a firm of stockbrokers, forecasts that their sales will have increased by 27% in the third quarter, compared with the same period a year earlier. Profit margins are widening: net profits are predicted to have grown by 39%. This week Infosys, another IT star that is one of the first firms to report its quarterly results, actually beat these forecasts. In rupee terms its quarterly net profits had grown by 53% year-on-year. The firm, which crossed $1 billion in annual revenues only in the financial year ending in March 2004, expects to pass $3 billion in this one.

With strong balance sheets, finance is not an obstacle. The stockmarket has been booming—this week its main index was just below its historic peak. Rupee interest rates, although they have been edging upwards for the past two years, are still, in real terms, at about half their levels of a decade ago. And, despite capital controls that place limits on external borrowings, India's big companies can raise huge amounts of money abroad. In August Reliance Petroleum raised the largest-ever syndicated loan for India, of $1.5 billion. Tata Steel is reported to have secured financing commitments of $6.5 billion for its putative bid for Corus.

Going global
That an Indian firm should even be contemplating borrowing so much for an acquisition shows how much corporate India has matured since 1991. That was when the government began to dismantle the “licence raj” of bureaucratic controls that had hobbled Indian business. It was also the year Ratan Tata became chairman of Tata Sons, which has been at the forefront of Indian business's globalisation.

He oversaw a rationalisation of the group's hundreds of businesses. But it is still so diverse it sometimes seems to resemble a private-equity fund rather than a conglomerate. Besides steel, its interests include cars, hotels, mobile telephony, chemicals, tea and India's largest software firm. Most of these arms have expanded abroad through acquisition. About one-third of the group's revenues now come from overseas. In 2000, for example, Tata Tea spent $435m to buy Tetley Tea, a British business with a global brand. That was the first big foreign acquisition by an Indian company, and is in some ways a forerunner of the Corus bid. Both involve a high degree of leverage and would link an Indian resource base—tea plantations and iron ore—with global marketing reach.

Tata Steel is emblematic of the successful parts of Indian manufacturing. It is known as the lowest-cost producer in the world. It is one of the firms that thrived in the more competitive marketplace that emerged in India after the 1991 reforms, and have since been able to take on the best in the world. What is noteworthy about many of them is that the root of their success is not India's obvious competitive advantage: its vast, low-cost labour force. In the IT and outsourcing industries, lower salaries for college graduates are an important reason behind Indian firms' rapid growth. But in manufacturing the stars tend to be experts in automated, capital-intensive production. Bosses who have flourished in such businesses in India, with its poor infrastructure and still-daunting regulatory environment, understandably feel confident that they have lessons to teach their new purchases in other countries.

captain HARD COCK

FU#K U TAKING ABOUT INDIA

And what exactly is wrong with talking about India?

I think most of the Nepalis still like to beleive that India is just another cheap neighbor.

Great articles, i just hope some of the spilling effects will be in Nepal as well.

Hareyy!!!

Kina yesto INDIA lai gali garne hola!! The whole freakin world is talking about India and China, Nepali haru chai sukul ma basera DHOTI DHOTI bhanera danga parchan!!

Grow up! Donkey, cant be a human?? Alteast become a Monkey... ani slowly evolution, survival of the fittest etc. etc. hudai garnu!

Kunai din manchhe bhanne chhau!

These are the only spilling we gettin from india:

terrorism
refugees
corruption
bihar style nepali politicians
last but not the least....spilling of AIDS infected enslaved nepali women and children from indian brothels

india has masterfully put these spills in pace so that nepal won't get any spilling from their version of mordern day industrial / technological revolution.

Well, India, or anyone else for that matter, is not going to give anything to Nepal on a platter. If we have failed to take advantage of India's growing prosperity, it has largely been because of our own incompetencies and failures. Fortunately, it isn't too late and we can still try and take better advantage of our close location to India, a country which increasingly has become Nepal's gateway to wealth creation and economic prosperity.

Well said Capt. Haddock....

India is not giving anything to Nepal GOOD or BAD... it is what we take that reflects who we really are.....

Caste ko baarema ek jana vo vandaima sab janalai vanna paudaina vanchhan... i think India ko baarema pani 2-4 jana khaate chhan vandaima sab jana hundainan vanne bujhnu paryo justo lagchha...

hav a good day..

INDIANS ARE THE WORST WORMS THIS PLANET HAS EVER SEEN.

If Indians are "worms" for reasons you don't care to explain, then by the same token, what are you - a maggot?

Great article.

It's high time that Nepal should at least learn something from its two giant neighbours. And all the India bashers in Nepal are nothing but hypocrites & losers. They try to blame India for everything in order to cover their own shortcomings, mistakes and weaknesses.

Indians are taking over Nepal the same way as British took over India.

I will Not accept Indians, Will you???

I have no problems with Indians and I am not sure what you mean by "taking over". I don't think they are interested in militarily taking over Nepal, and even if they were, it would be a very tough job given the fact they are struggling to keep parts of their country like Kashmir and the Northeast together. Why would any rationale Indian want to have one more hostile territory to administer?

The key here is we need to better our stock in Nepal and India's booming economy provides us such an opportunity if only, as others on this thread have pointed out, we get off our high horses and plant our feet on the ground and get on with business of making money and improving everyones lives.

"Indians are taking over Nepal the same way as British took over India" -- This is the most favourite dialogue of our incompetent leaders. They always try to cash in the people's nationalistic sentiments by telling things like 'desh ko astitwa nai sankat ma parna sakne khatara". The king claimed it was going to happen soon, the Maoists also told the same thing and so did the seven parties. All of them have been using this tactics to divert the our attention from the major problems and issues which our country is facing. I've had enough of this useless crap.

Many of the Indians are the least bothered about what is happening in Nepal. Our impressions about India are mostly based on our experiences with the people of Bihar and UP. And these don't represent India in totality.

I feel that we must see the situation of Nepal in today's scenario, and need not continue to hold the same views as held by King Mahendra. The world has changed a lot since those times. And India trying to do something like Sikkim in Nepal in 2006? ......A very nice joke. I think we must come out of this 'sikkimikaran' hoax and should focus more on our development.

p.s. The other favourite quote of our leaders I think is " Nepal ko kathin bhaugolik bikatata le garda desh bikash huna sakena, garna garho chha"...This is another one of their lame excuses. If this was the case, then what about Switzerland or even Lhasa? Or Himachal Pradesh of India?

Samir, I am on the same page as you. Most India bashing that goes on in Nepal is plain BS. A smalll country seems to have given some of us a small mind : we simply are unwilling or perhaps even incapable of thinking beyond being victims of India.

Yes, some of us just bash India and never try to realise our own shortcomings. Practically people from every sector in Nepal suffer from this mentality.

If we consider just one area in Nepal, then this thing becomes more clear. I am trying to illustrate our hypocrisy from the situation of the medical colleges in Nepal.

We all know that many medical colleges have been set up in different parts of the country in the last 10-12 years, with investments of Nepal or India or both. In the beginning, all these colleges had Indians working as teaching faculties and dictors, as there were insufficient numbers of trained doctors in the country at that point of time. In all those years, these colleges have produced at least five hundred nepalese doctors. But they are still facing a crisis of Nepali teaching faculties and doctors as they werefacing 10 years back. Though they keep on publishing vacancies for different posts at least 4 times a year, for interested Nepalese candidates, no one applies. The reason ? Almost all of the medical graduates who pass out want to go to Kathmandu, or else to some foreign country. The pay and facilities in these colleges is very good if we consider the general nepalese or even indian context. Pay scale equivalent to $500 - $1000 per month in Nepal can't be considered bad. But still they're not joining there. And once they get a job in Kathmandu or get a chance to go abroad, they just say that those colleges are full of Indians, Indians are useless, they shouldn't be allowed to come to Nepal, 'Indians working in academic institutions in Nepal' should be banned, Indians are getting so much money from Nepal and so on and so forth. But they themselves are unwilling to change the scenario. And these colleges are continuing with more than 60% of its staffs being Indian.

I feel that most of us are similar kind of hypocrites.

Very true. I shudder to think what it would be like to be treated by people with so much hate in them. After all, you would think medicine is about compassion and care. I suppose the saying, physician heal thyself, would have relevance in this context :)

hey captain, my buddy, how ya doing?
good to read your informative post yet again. thanks. :)

India is certainly on a role no doubt and hypocrites nepalese will always keep on whining and bashing them for no rhyme and reason. i don't see it getting changed. it's high time we came out of the prejudices...it's not leading us anywhere!

there was a thread on a similar note (india's growing economy) some time back in sajha. you may want to visit it, if you haven't done so.

- http://www.sajha.com/sajha/html/OpenThread.cfm?forum=2&ThreadID=35832

and here's an interesting documentary:

Race to the Top of The World--India vs. China






Have a good one!

LooTe