Sometimes, a title of an article seems different than what is actually written. The reader does not understand it until he/she reads the whole article. Such an article is this one.
After independence, India was not well developed economically and (with no offence to my countrymen) was comparatively poor. In order to become self sufficient, we followed the economic policy of import substitution. Gradually it was a success and we became net exporter of various goods, for example milk. This means we had started to SELL our goods globally. Around that time Non Resident Indians (NRIs) living in Europe, North and South America and Australia were fascinated by commodities available there. Since they had the purchasing power to BUY such goods, they felt a sense of pride and happiness that they have done well in life to be able to live outside India and buy things which their counterparts in India could not buy.
Then 1991 economic reforms happened and this trend started reversing, albeit very slowly. This reversing trend could be seen earlier in the week when Mr. Ratan Tata invested and BOUGHT stakes in a Chinese phone manufacturer Xiaomi while 2 NRIs – Sunil Wadhwani and Ashok Trivedi SOLD their US-based IT company Igate to the French IT major Capgemini. An Indian resident buys, while 2 NRIs sell. Although this is a business strategy and nothing similar to buying and selling goods, it is worth making a comparison.
Let us look at 2 cases closely.
First case, NRIs are SELLING. Capgemini’s acquisition of Igate costed the former $ 4.4 billion which includes payment of $ 1 billion each to Igate founders Sunil Wadhwani and Ashok Trivedi and $ 1.2 billion to Apax Partners who had owned 29% stake at Igate. Moreover, Igate is selling its shares to Capgemini at $ 48 per share, higher than the share price listed on Friday on Nasdaq at $ 45.85 per share. Igate is not a big player in US market where Accenture and IBM are leading competitors. Capgemini too is not a big competitor but has its stronghold in Europe. It was looking to consolidate its position in North America and Igate seems to fulfil their ambition. This acquisition is going to have little affect on Accenture or IBM, but it certainly affects Indian companies like TCS, Wipro and Infosys who look at US for most of its revenue.
Second case, Indian resident is BUYING. Ratan Tata has now somewhat become a non-operational owner of the Chinese start-up Xiaomi. Mr. Tata is breaking all shackles of old age and retirement and seems to be on a mission. Moreover, it appears that the current Chairman of Tata Group (Cyrus Mistry) is getting less attention than the Chairman emiretus. Keeping aside the sarcasm, Mr. Tata has taken the first mover advantage while Lei Jun, founder and Ceo of Xiaomi has found himself a great asset to increase his phone sales in India. Jun-Tata is going to be a threatening combination, which other mobile manufacturers especially operating in India need to be vary of.
These 2 changes in the business environment of IT and mobile phones is seriously going to be a challenge for Indian companies in future. Soon we will be seeing response by them too. Whatever the result is, hope that the trend of Indian residents buying and NRIs selling continues for a while. Why? It shows the intent of Indian residents – “Hum bhi NRI se kum nahi!”
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34 Comments. Leave new
Last line. Good conclusion.
Thanks Aikanksha.
You have presented the whole information in a very unique way. It was a very interesting read!
Thanks Nirali. Thanks for reading the article. I am happy you liked it.
nice article
thanks Avneet
Nice conclusion.. Good work… keep it up…!
Thanks Padmaa
This is truly commendable the way you have explained it.
Thanks Juhi. I am happy you liked it.
GOOD JOB!
thanks Divya.
Thanks Chitranshi.
Last line.. Epic!
Haha, thanks.
Interesting as well as unique.
Unique and expressly written!
A Fine writing!!!
Thanks Soham, Aikankshi and Abhay.
Heading is very interesting as is the article!
Thank you Vasundhra.
haha!
nice
Well written!
Very interesting case studies!
Good arguments put forth. Interesting!
Thank you very much. I am happy you understood my arguments.
A very interesting article explaining the power of Indians from a whole new perspective. Great work!
Thank you very much.
Well researched and well written
Good work!
Interesting concept 🙂
Keep up the good work
nice perspective. worth reading