Corus on both sides

Overseas acquisitions by Indian companies are probably the most surprising twist to the India story. That a big country with fairly robust institutions could upgrade its performance following the right kind of policies is perhaps not startling. But that reforms would also make it possible, in a few short years, for the Indian private sector to buy prime corporate assets abroad isn8217;t something the most romantic of reformists predicted. Therefore to see the 7.6 billion Tata Steel offer to buy the Anglo-Dutch steel company, Corus, only through the prism of dry accounting would be to miss the significance of the shift. Could anyone in 1996 8212; when the first reformist government lost an election amidst the usual political demonisation of reforms 8212; have even thought that in 10 years an Indian steel company would be close to buying a corporation that was part formed by British Steel Dutch steel-maker Hoogovens is the partner in the union that produced Corus? Before the merger and even during its bad days of being nationalised, British Steel was iconic, a symbol of British industry, far out of the reach of India8217;s corporate houses.

But it is exactly when we remember how iconic British Steel was 8212; Corus, too, is a solid corporate entity with a lot of cache 8212; that we must remind ourselves of the other side of globalised corporate buyouts: Indian companies are getting good as global buyers but India remains a less-than-friendly place for foreign takeovers of national icons. There have been foreign buyouts of Indian companies, of course. But the establishment8217;s commitment to real globalisation hasn8217;t been tested for years. When it was last put to test 8212; during the ITC-BAT battle 8212; the Indian establishment failed.

So celebrating big buyouts, or criticising globalisation-wary European countries like France, should be tempered with self-knowledge. Let8217;s put it this way: if a company that doesn8217;t even figure in the list of global top 50 in its line of business makes a good offer for an Indian company that ranks in the global top 10, would the Indian establishment stay out? Tata Steel doesn8217;t figure in the top 50 list of steel-makers, Corus figures in the top 10, but neither the British nor the Dutch establishment cares.