&w=1024&resize=1024,0&ssl=1 "Name that showed potential, Ratan Tata's vision is still India people")
The Tata name is ubiquitous in India. People find it in the packets of tea that wake them up in the morning, on the bus that takes them to work, and in the hotels they frequent for an after-work drink. There is no other name that represents the potential and failure of the country's private sector – and that is why this week all Indians will feel the departure of Ratan Tata, the group's patriarch.
In his ambitions and through his mistakes, Tata captured the potential of a modern, global India. The century-old conglomerate he led grew with his country, from the first signs of an industrial economy in the subcontinent, through its steel factory in Jamshedpur, through the dark years of socialism and the explosion of post-liberalization optimism.
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Ratan Tata came to power in 1990, a year before India was deregulated and opened up. Under him, a group that made steel, trucks and chemicals quickly diversified into small cars and information technology.
The shift exemplifies India's move away from a capital-intensive, state-led growth model based on consumer demand and service exports. Today, Tata Consultancy Services Limited accounts for the largest portion of the group's value.
Unfortunately, deindustrialization did not work as well in the rest of the country. A service-based economy cannot create enough jobs, nor does it appear capable of ensuring economic security.
India's current government is desperately working to turn back the clock with a comprehensive industrial policy. But the transition to a high-value and relatively uncompetitive industrial sector proved to be a difficult task.
Perhaps this is because Prime Minister Narendra Modi's efforts have focused on tariffs, subsidies and protecting domestic manufacturers rather than improving productivity. The government will want companies to stay at home and localize their entire supply chain.
Tata Sons Ltd CEO N Chandrasekaran promised Modi at the inauguration of a new aircraft factory in 2022 that “the Tata Group will now be able to take aluminum ingots at one end of the value stream and turn them into an aircraft Airbus C295. The Indian Air Force, on the other hand, also belongs to Tata, the government. In response to a push, three semiconductor manufacturing plants and a chip testing and assembly complex are being built.
Ratan Tata's own instincts seem to have pushed him in the other direction. Although he never gave up production, he always believed that Indian companies should be global.
He used TCS profits to make big bets on both – bets that didn't always pay off. In 2008, Tata Motors Limited purchased Jaguar Land Rover. The business can be considered a success, as the company reported its highest revenue since 2015 last year.
Other decisions don't look so good in retrospect. In 2007, Tata purchased Corus Group Ltd., which makes steel in factories owned by Dutch and British national producers Koninklijke Hugowens and British Steel, respectively. Tata probably overpaid and lost billions on this gamble; The last blast furnace of the former British Steel has been closed. The week Ratan Tata spent was also the first in a century in which no steel was spilled in the UK.
Still, India trusted its judgment, even in politics: when Tata Motors Ltd. chose Modi-run Gujarat as the site 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 Tata's example a few years later.
Why not go back to your trading instincts? India's ambitions should be global and not local. Their companies must build in the world and for the world, and not just focus on the domestic market. Whatever his faults, Ratan Tata has always compared himself and his group's products to the best in the world. The rest of India should too.
I grew up in Jamshedpur, the beautiful company town that the Tatras built around their huge steel plant. Ratan Tata was already a great figure. Jamshedpur, with its world-class amenities, its order and its productivity, seemed like a refuge from what India could be. The country may not have fulfilled that promise yet, but, like Ratan Tata, it should not stop believing.
