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Shri. Aditya Vikram Birla was an ardent advocate of liberalisation. At a conference organised by Euromoney magazine, he strongly endorsed the economic reforms implemented since 1991 and forcefully and eloquently outlined the new face of India. In a speech, which will be long remembered, he called out to foreign investors to join hands in an equal partnership with Indian business and to take advantage of the unfolding opportunities. More than anything else, his words would come to symbolise the newfound confidence of the Indian entrepreneur.

We reprint the speech, made at New Delhi, on March 22, 1994.



Euromoney has invited me to talk on "Indian Industry — The Opportunities for Globalisation". I was wondering why. It could be perhaps for two reasons: the first may be the fact that they see me as having led six road shows for the marketing of Indian Euro equities internationally, within the last one and a half years. The second reason may be our Group's pioneering forays internationally and its current substantial presence abroad.

Let me first share my experiences of the road shows with you and its relevance to Indian globalisation. On my first road show, the question asked by most of you, several of whom I now know personally, was: "What will be the discount to the market price?" — a reflection of India's rating at that time; on the second road show, the question always posed was: "At what price earnings ratio are you selling and why should we, as international investors, buy Indian equities, at p.e.s much higher than those available to us in Mexico, Thailand, Taiwan and South Korea?"; on the third road show, the question asked, now with a tinge of respect, was: "At what premium will you sell euro equity?"; on the fourth road show, holding India in high esteem, the question asked was: "Mr. Birla, at what premium would you sell the Euro equity and would we get a decent allocation?". This more than anything else, shows clearly how the perception about India has changed in the wake of its globalisation efforts.

Putting up joint ventures worldwide, and lastly, inviting global players into the Indian soil and joining hands with them in diverse fields.

Today India provides exciting investment opportunities. Consumerism is taking roots and there are clear signs of this happening. Until sometime back, banks were shy of consumer financing. Today there are not just banks, but any number of finance, leasing and hire purchase companies, making available the finance to fuel consumer spending. There will be a boom in demand and this will trigger a multiplier effect on all kinds of industries. Growing demand from 210 million middle class people will ensure growth across the entire economic spectrum.

Dr. Manmohan Singh, in his previous Budgets, in general and in this Budget in particular, has tried to make the Indian industry globally competitive. He has done so by structural adjustments. The Finance Minister has also moved ahead to make the rupee fully convertible on the current account. In this context, talking of the exchange rate prevailing in the past, I am reminded of the time when I was in school at MIT and I fell seriously ill. My mother had to apply to RBI for foreign exchange, even for visiting her ailing son. She had to wait for four agonising days to get the exchange. When she came back after visiting me, she thanked the mandarins at RBI for the favours granted to her. She mentioned that she had come back after visiting her ailing son in MIT, in Cambridge. Pat came the response, which was vintage bureaucracy - why had she visited Cambridge in the UK when the RBI had given her permission to go only to the United States. The bureaucracy was unaware of the existence of a Cambridge in the US apart from the Cambridge in UK. We have come a long way since then!

Far reaching and dramatic changes have been introduced in all spheres of industrial activity. All these sweeping steps are leading to the globalisation of the Indian industry.

The Indian industry starved of technology until a few years back is now rebounding back to health. Indian industry, fragmented locationally, and with sub-optional capacities, is now consolidating and is starting to build world size operations. The impression and notion in several minds, about the primitive or small size of our operations, is no longer entirely true. Let me inform this enlightened gathering of just our group, because that is what I know best:

  • In the field of Insulators, we are the 5th largest producers in the world
  • In the field of Rayon fibre, we are the largest producers in the world;
  • In Carbon Black, as a group, we are the 6th largest producers in the world;
  • In Palm Oil, we are the world's 2nd largest producers.

This is the story of just one Group. There are several groups far more aggressive than ours. Indian industry has come of age. Government and industry today are working hand-in-hand and shoulder-to-shoulder. There is no stopping us now onwards.

We have several compelling pluses in India. We have a thriving democracy, which few countries enjoy. You won't find the roots of democracy as deep in Romania, Poland, Thailand, Indonesia, Philippines or China.

We have a well-established legal system in India. Perhaps you may complain of an overdose of law, but at least you will enjoy the feeling of security, of your rights and privileges. Then you have the advantage of a large population, a large market. Other than China, no one can come near us in terms of potential market size.

We also have a vast bank of talent, with over 3.5 million scientific and technical personnel, trained in English language, of a quality and at a cost unmatched. India has a well-developed capital market. We have 21 stock exchanges with over 2,000 actively traded scripts, compared to 220 in Indonesia, 354 in Thailand, 423 in Malaysia, 235 in Singapore and 181 in the Philippines - China - one doesn't know.

Liberalisation and globalisation do have their interesting and lighter sides. If we were fortunate and privileged enough, to be invited by our Prime Minister or Finance Minister for a dinner in this new economic scenario, we will be served "Kentucky Fried Chicken" and not the famous Punjabi Tandoori, which is so delicious. Fortunately for me, I am a vegetarian; so the saving grace is that I may well get pizza from Pizza Hut. So the Indian palate stands to gain by liberalisation. And, of course, I forgot to add, we will have the choice of a Coke or a Pepsi to go with the pizza. India today has truly rolled out the red carpet for one and all. This is the time to strike — when the iron is hot.

This is the right time to take advantage of the investment opportunities. This is not just in the interest of India. This is not trying to sell "India Inc." We talk on equal terms. We talk about mutual benefits. Let us be partners, in the economic progress and prosperity that India offers in the globalisation of the Indian industry.

Let me now emulate my Finance Minister, at least when giving speeches, since I can't do so in making the Budget. Far ahead of our times, Rabindranath Tagore, India's renowned philosopher and poet expressed a vision of a global India. His thoughts flow in the 'Gitanjali', the work for which he was awarded the Nobel Prize for Literature.

He wrote, "Where the mind is without fear and the head is held high; Where the world has not been broken up, into fragments, by narrow domestic walls; Where tireless striving stretches its arms towards perfection; Where the mind is led forward by thee, Into ever-widening thoughts and actions; Into that heaven of freedom, my father, let my country awake."

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