&w=1024&resize=1024,0&ssl=1 "A name that showed potential, Ratan Tata's vision is still India people")
The name Tata is ubiquitous in India. People find it in the tea bags that wake them up in the morning, on the bus that takes them to work, and in the hotels where they go for drinks after work. There is no other name that represents the potential and failure of the country's private sector – which is why this week all Indians will feel the passing of Ratan Tata, the group's patriarch.
In his ambitions and through his mistakes, Tata captured the potential of a global, modern India. The century-old conglomerate he presided over grew with his country, from the first signs of an industrial economy in the subcontinent through his steel plant in Jamshedpur, through the bleak years of socialism and the surge of post-liberalization optimism.
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Ratan Tata took power in 1990, a year before India deregulated and opened up. Under his leadership, the steel, truck and chemical group quickly evolved into small cars and information technology.
This shift represents India's shift away from a capital-intensive, state-led growth model based on consumer demand and services exports. Currently, Tata Consultancy Services Limited has the largest share in the group's value.
Unfortunately, deindustrialization has not worked so well in the rest of the country. The service economy cannot create enough jobs and does not appear to be able to provide economic security.
The current Indian government is desperately working to turn back the clock with a comprehensive industrial policy. However, the transition to the relatively uncompetitive high-value manufacturing sector has proven to be a difficult task.
Perhaps this is because Prime Minister Narendra Modi's efforts have focused on tariffs, subsidies and protecting domestic producers rather than improving productivity. The government will want businesses to stay at home and localize their entire supply chain.
Tata Sons Ltd chief executive N. Chandrasekaran promised Modi during the inauguration of the new aircraft plant in 2022 that “The Tata Group will now be able to take aluminum ingots at one end of the value stream and transform them into the Airbus C295 aircraft. On the other hand, the Tata Indian Air Force, also government-owned. In response to the pressures, three semiconductor plants and a chip testing and assembly complex are being built.
Ratan Tata's instincts seem to have pushed him in a different direction. While he never gave up manufacturing, he always believed that Indian companies should be global.
He used TCS profits to place big bets on both – bets that didn't always pay off. In 2008, Tata Motors Limited bought Jaguar Land Rover. The transaction can be considered a success, as last year the company recorded the highest revenues since 2015.
Other decisions do not look so good in hindsight. In 2007, Tata bought Corus Group Ltd., which produces steel at plants owned by Dutch and British domestic producers Koninklijke Hugowens and British Steel, respectively. Dad probably overpaid and lost billions on this bet; The last blast furnace of the former British Steel has closed. Ratan Tata's week was also the first week in a century in which no steel was poured in the UK.
Yet India trusted his judgment, even in politics: when Tata Motors Ltd. chose Modi's Gujarat as the location for a new car factory in 2008, it was seen as a sign that the private sector trusted the then-controversial Modi. Other Chief Ministers. The country followed in Dad's footsteps a few years later.
Why not go back to your commercial instincts? India's ambitions should be global, not local. Its companies should build in the world and for the world, and not focus only on the domestic market. Regardless of his faults, Ratan Tata has always compared himself and his group's products with the best in the world. The rest of India should too.
I grew up in Jamshedpur, a beautiful company town that the Tatra Mountains had built around their huge steelworks. Ratan Tata was already an above-average character. Jamshedpur, with its world-class amenities, order and productivity, seemed an oasis of what India could be. The country may not yet have fulfilled this promise, but like Ratan Tata, it should not stop believing.
