Coca-colonialism and Tata-colonialism

Millions of Indians cheered when Tata Steel won the auction for Britain’s Corus, and became the world’s fifth biggest steel producer. The shares of Tata Steel fell over 10%, since investors felt that Ratan Tata had paid far too much. True, but Ratan had paid for much more than Corus. He had paid for achieving a vision, and for making Tata a global brand. This may not be good news for Tata Steel shareholders. But it is very good news for Brand India, and for Brand Tata.

With this acquisition, Tata Steel is now the 268th biggest company in the world, ranking just below Coca Cola. The Tata group as a whole is much bigger than Coke. So, forget your old fears about Coca-colonialism: the era of Tata-colonialism is at hand.

This is not an era of foreign acquisitions by the Tata group alone. Ranbaxy and Cipla have entered the race to acquire Merck’s generic drug business in Europe, and are building war chests of $ 5 billion or more. Reliance will be bidding for the plastics division of General Electric, which is up for sale. No longer are Indian companies bidding for just small or medium foreign companies. They are bidding for global giants. This has been made possible by the willingness of global financiers to loan money to Indian minnows to take over global whales.

India is by no means number one among developing countries in global takeovers. China is far ahead. Its electronics company TCL acquired the TV business of France’s Thomson. China’s computer company, Lenovo, acquired the personal computer business of IBM. However, Indian groups like Tata are catching up. TCS, Tata Motors, Tata Tea, Tata Coffee and Tata Chemicals have snapped up companies across the globe. This, say some wags, is the real neo-colonialism.

People ask me, will Tata-colonialism beat Coca-colonialism? This rhetoric makes me uneasy. The concept of an imperial struggle for control of the world is simply false. Coca-colonialism is a catchy phrase, and so is Tata-colonialism. Yet the global integration we are seeing is interdependence, not colonialism. Tata’s eagerness to acquire Corus is matched by Corus’ eagerness to be acquired. This is a union, not colonisation.

Old concepts (such as Coca-colonialism) created in the old era of nationalism are inadequate to describe what is happening in an era of globalisation. Consider IBM. For decades it was castigated as a monopolist and epitome of neo-colonialism. IBM was the pioneer of the personal computer, but eventually got beaten so badly by Asian rivals that it sold its entire PC business to Lenovo of China. To survive, IBM became mainly an IT services company.

Leftists may still see that as a new way for IBM to colonise the world, though domination of IT services. But listen to the latest news. IBM sees its future survival as dependent on Indian expertise. Its Indian employees have skyrocketed in number from 4000 in the early 2000s to 53,000 today. A document circulated by IBM to its Indian employees projects a workforce of—hold your breath—120,000 in India by 2008. IBM is becoming Indian rather than American in terms of employment.

Can this be called IBM’s conquest of India? Or is it better called India’s conquest of IBM? Should the R&D of Indian scientists in IBM be called American research or Indian research? Should the patents awarded to Indian engineers of IBM be called Indian patents or American patents? The answer is bafflingly unclear. Globalisation has obliterated old national distinctions.

Many other US companies are following the IBM route. Accenture, one of the biggest consulting and IT service providers in the world, has just announced that it will increase Indian staff from 27,000 to 35,000. This will make India its biggest employment hub, overtaking its US hub with 30,000 employees. Its CEO says, “We have many research capabilities in our Indian consulting unit. We will now add functional capability as well.” Will this constitute Indian expertise or American expertise?

Several MNCs are opening R&D centers in India. The biggest of these is GE’s Jack Welch Centre in Bangalore. Will its discoveries be Indian or American R&D? In some ways both, in some ways neither.

Don’t get me wrong. National identity is still the most important of the many identities that we humans have. This is especially true of cultural and political matters. Even in economic and corporate matters, the overwhelming majority of transactions are national, and only a small fraction is global.

But globalisation, while still in its early stages, has rendered obsolete old concepts of conquest and colonialism. Colonialism is conquest by military force. But when Coke sells fizzy drinks in India or Tata sells steel in Britain, no consumer is being forced to buy at gunpoint. On the contrary, the consumer has to be persuaded that he is better off buying from Coke or Tata than from rival suppliers. You could call this conquest in the sense of a man wooing and winning a woman, but that is very different from military conquest. Casanova’s conquests were not colonialism.

What do you think?