Giants in the Country but Zero Global Recognition

There is a debate ongoing in India about what steps the country is taking to remain competitive at the global level.

Union Commerce Minister Piyush Goyal has observed that India’s strong domestic market of 1.4 billion people has become a comfortable and lucrative space for industries, giving Indian businesses significant profits. Hence, they do not feel the need to explore opportunities abroad.

Before the economic reforms of 1991, whatever produced by Indian industrial houses was sold quickly because consumers had very limited options.

In India, even business groups that initially focused on a single sector for growth and expansion, found it easy to diversify into other unrelated sectors. It seems this situation remains largely the same even today.

This somewhat explains why India has so many diversified company groups, instead of large corporations specializing in one or two sectors.

Some blame can also be placed on large Indian conglomerates which, despite their size and resources, preferred managing the domestic market, rather than aiming to establish themselves globally. But the government too needs to reflect on where its policies is lacking.

In most countries where India exports, the quality of goods sold is often higher, while Indian consumers at home pay more for the same product but with lower quality.

Even global companies operating in India often maintain a difference in the quality of goods they sell domestically and abroad.

In the 1980s, when China was reforming its economy, it encouraged intense domestic competition, while simultaneously improving quality. This nurtured genuinely strong companies in China. Alongside measures to keep production costs low, world-class quality emerged.

The chinese government supported domestic companies with some protective policies but also compelled them to remain competitive at both global and domestic levels.

Perhaps Indian policymakers, along with industrial organizations, should also debate this issue.

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