The Tata-Corus deal represents a significant marker in India’s economic reform trajectory. This is not so much because the $12 billion deal happens to be corporate India’s biggest takeover to date, but because it outlines the potential of economic liberalisation and globalisation in transforming the country’s future.It is almost a cliche to say that the Tata-Corus deal could never have taken place even 15 years ago. But cliches often hold interesting truths and this one throws up five such insights. One, economic reform allowed Indian companies to grow and take wing. Earlier they were told what to produce, how they were to produce, and for whom. But once they were given the freedom to make these crucial decision for themselves, many found themselves graduating to the big league. Two, liberalisation in the era of globalisation allowed corporate India to access world markets. Three, financial restructuring made it easier for India Inc to integrate with global financial systems. Four, economic reform gave Indian entrepreneurs the confidence to compete in the world’s markets on their own terms and understand business cultures that were different from their own. Five, economic reform gave Indian business houses a new profile as global players, helping to end earlier prejudices about doing business with India. It is useful to remember that in the case of the Tata-Corus deal, the management of Corus — incidentally, a company that is four times the size of Tata Steel — had considered the Indian company its best bet in terms of strategic fit.Earlier this year, Union Finance Minister P. Chidambaram had remarked that reforms are like cricket scores — once they are scored, you just cannot erase them from the scoreboard. But if reforms are like cricket scores, it also means that the scoring needs to be kept going, which demands, in turn, relevant economic strategising, well-designed financial instruments and wise policy-making. The Tata-Corus deal is big, but it only indicates that the acquisitions and mergers of the future could be of even larger proportions. How prepared is India Inc and, more importantly, the Indian government to face up to the potential of the Tata-Corus moment?
