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PREFACE

The dawn of the new century has brought India to the economic forefront in the
global economy, with an increased awareness of the opportunity that India pres-
ents to the rest of the world. The Indian economy has been growing at a frenetic
pace of over 7% in this new century, second only to China. The largest democ-
racy in the world, with a population of over one billion and the largest English
speaking population outside of the Western hemisphere, India is an attractive des-
tination for business and leisure. People all over the world are eager to know
more about India and its growth story.
Even though I have been in the United States since the early 1990s, and am
now a US citizen, I too have been curiously studying the breakthrough develop-
ments in India over the last decade. It is important to understand that although
India has a very old civilization, it is a relatively young nation. India obtained its
independence from the British rule in 1947 and so is just over 60 years old (or
young). From 1947 to 1990, India adopted a strong form of socialistic democracy
and relied heavily on a planned economy based on the Soviet model. During this
period, often called the “License Raj,” almost everything was tightly and cen-
trally controlled. Planned development was focused on fixing the state of the bat-
tered economy and improving agriculture — or at least that is where India showed
a lot of progress. Though a number of institutions of higher education (particu-
larly in science, engineering, and management) were established during this
period, it was not uncommon for the majority of the graduating class of these
institutions to head abroad to seek better opportunities. This was called the “brain
drain.” I still remember a comment from a senior member of our faculty at the
Indian Institute of Technology (IIT, my alma mater) that “brain drain” was far
superior to having the “brain in the drain,” for that is how the elite viewed the
state of the Indian economy then. However, the treatment of the water in this
drain had already begun, and it would soon become purified enough to attract the

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attention of businesses worldwide, creating an oasis of opportunity within just a

few decades.
As I witnessed the revival of the state of the Indian economy in the middle
and late 1990s, I got the feeling that this was a different country altogether from
the one in which I had grown up. Since the beginning of this new century, I have
been researching India’s development closely. My investigations started with dis-
cussions with friends and relatives. I followed the news and read articles about
the Indian economy. Then, four years ago, I decided to develop an MBA course
on “Doing Business in India” at the Kenan-Flagler Business School, University
of North Carolina at Chapel Hill. This course would take me every year for a fort-
night to India and give me an opportunity to observe the top firms operating in
India from close quarters.
Over the last two years, my knowledge of India has increased manyfold as
I have benefited from opportunities to conduct research, consult and interact with
CEOs and top managers from firms in India, listen to and discuss government
policies with leading bureaucrats and ministers, and present my opinion on
India’s economic future at global events. Seeking more information on the ‘India
story,’ I read a wide range of recent books on India written by entrepreneurs, aca-
demics, travelers, politicians, and journalists, which covered a wide variety of
topics related to Indian culture, politics, natural beauty, socioeconomic issues,
and outsourcing to India, among others. Although many of these books had inter-
esting dimensions, they were far from what I was looking for — a book that could
provide a balanced perspective about the Indian economic growth story; a book
that went beyond anecdotal evidence; a book that was not trying to sell something
about India, whether tourism, offshoring, or corruption (or the lack thereof); a
book that was based on solid research and the experience of individuals who had
interacted extensively with businesses in India; a book that could be recom-
mended to my Western and Indian friends alike, colleagues and professors at
other universities, managers at multinational firms, and any individuals who
might be interested in learning about the Indian business economy’s success
story, the challenges and opportunities that it faces going forward, and how they
could benefit from it. This has led me to create the current book. Although this
book is about India and Indian firms, I believe, many of the case examples and
success stories can be adopted in other parts of the world as well.

Indian Economic Superpower: Fiction or Future?

This book has three differentiating features.

• First, this book is highly focused. Centered mostly on India’s businesses and
economy, this book deals little with the much-publicized ancient history of
India, its culture, spiritual heritage, caste system, or natural beauty.

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Preface vii

• Second, this book has a unique style, one not traditionally found in business
books. It is an integrated collection of thoughts and ideas from some of the
most experienced experts on India. When I decided to create this book, I had
the option either to write it all by myself, or to collaborate with a selective
group of experts. Although the former would have been easier in terms of
execution, I followed the latter approach to create a detailed account of
opportunities and predictions across a selected set of vertical sectors. In my
opinion, this gives the content of the book more research depth and greater
brainpower. Collectively, these experts have had several decades of experi-
ence both in working with and in researching Indian firms. The contributors
for this book come from a variety of outstanding organizations, including the
University of Michigan, New York University, Purdue University, the
University of Texas at Austin, the University of North Carolina, the Indian
Institute of Management, Deloitte Consulting, and Brickwork India.
• Third, the organization of the book as modular chapters allows readers to
selectively focus on the industries in which they are most interested. Each of
these chapters, which cover different sectors of the Indian economy, begins
with a brief review of what has happened in that sector in India in the last
20 years. This is followed by a discussion of current opportunities and chal-
lenges. Finally, the authors discuss what needs to be done in the sector in the
upcoming years. Contributors to this book have all tried their very best to
provide a balanced perspective of the challenges and opportunities India has
faced, and continues to face, in these areas.

This book consists of 11 chapters. The first chapter on “Sea Change” high-
lights factors that have led to the rapid economic development in India over the
last two decades. These changes are both significant and radical, and they have
provided much momentum to the Indian business economy. Chapters 2–7 pro-
vide accounts of the vertical sectors of outsourcing, software, manufacturing,
land and aviation logistics, and healthcare. Each of these chapters starts with a
description of the history of the sector along with characteristics that are unique
to India, then goes on to describe the current and future trends in that sector in
India. Chapter 8 provides specific advice and caveats for firms that are seeking
to leverage Indian product and service markets for cost reduction or for growth
in revenue or market share. Chapters 9 and 10 then offer concluding discussions
on the challenges faced by India as it tries to attain the status of a world eco-
nomic superpower, along with projections regarding what multinationals can
expect from India in the upcoming decades. In Chapter 11, I provide a brief
analysis of the impact of the recent global financial crisis. Before each chapter,
written by other authors (Chapters 2 to 8), I have provided a brief summary of
the content, linking the chapter to the overall perspective of the Indian economy,
so that readers wanting to skip a chapter can quickly get an overview of the
issues and challenges in that sector, maintaining continuity as they move on.

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viii Preface

Although this book covers a number of crucial sectors, other important sectors
such as retail, finance, insurance, power, real estate, and agriculture are not
addressed in detail, in some cases because the sectors are still regulated (some
partially). Hopefully, the brief discussions that I provide in Chapter 10 on some
of these sectors will be insightful to the reader. Despite this limitation, I hope
that this humble attempt on my part (with the collaboration of the contributors)
to provide an informed perspective will be of value to any individual or organi-
zation interested in better understanding and benefiting from the Indian economic
growth story.
Cutting edge research of this nature cannot take place in an academic envi-
ronment without active support from the business school. I am thankful to Dean
Steve Jones, Senior Associate Deans Doug Shackelford and Jim Dean for their
continued interest and support of this project. I wish to thank the Kenan Institute
of Private Enterprises for supporting part of my research related to this project.
The Center for International Business Education and Research (CIBER) at the
Kenan-Flagler Business School funded several MBA students for their trip to
India in 2004 when the global immersion course on Doing Business in India was
first started. This enabled to jump start the course in the first year. I wish to thank
Sherry Wallace, Candice Ward, Patricia Collins, Allison Reid, Emily Wilkins, and
Erin Benavides for co-ordinating all logistics related issues during our visits to
India which allowed me to channel my efforts towards research of these firms
while we were in India. The multiple repetition of this popular course over the
last four years enabled extensive research of business in India which eventually
has led to this book. A selective group of over 125 business students who came
with me to India over the last four years, I believe influenced this project in a big
way. Their excitement, passion, and interest in understanding the nuances of
doing business in India led to several interesting research questions to me which
I have tried to address in this book.
The depth and perspective of research presented in this book could not have
been achieved without the full support of all the contributing authors of the
different chapters — Vivek Kulkarni, M.S. Krishnan, Narayan Ramasubbu,
Ramnath Subramanian, Ananth Iyer, Peter Koudal, Haritha Saranga, Sridhar
Seshadri, Pankaj Chandra, Nimit Jain, John Kasarda, Rambabu Venkalayapati,
Ravi Anupindi, Mainik Sarkar, Sridhar Balasubramanian, and Prabhudev Konana.
Many of them are world renowned experts in their areas and collectively have
more than a 100 years of experience researching, managing, and educating Indian
firms. I would like to thank each one of them for taking time out from their
extremely busy schedules to write their respective chapters and further agreeing
to a uniform format for all the chapters. Once all the chapters were submitted, it
was important to create a book that flowed reasonably well. I wish to thank Vidya
Mani, one of my doctoral students, who provided research support during
this project as well as helped in creating a uniform organization of the different

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Preface ix

chapters. I also wish to thank Lynn Hand for her professional editorial help in cre-
ating a uniform writing style across the different chapters of this book. The World
Scientific Editor, Ms. Sandhya, was also very helpful in co-ordinating the various
stages of this project and helping me with various queries in a timely fashion. In
the final stages of the book, I got very useful comments from several colleagues
of mine. I wish to thank Saravanan Kesavan, Ann Maruchek, Adam Merserau,
Sriram Narayanan, Brian Tomlin, and Harvey Wagner for their thoughtful com-
ments and suggestions that helped me in improving the presentation of the con-
tents of this book.
Last, but not the least, a project of this magnitude could not have been
accomplished without the support of my family. My special thanks to my wife
Shanti for all the additional parenting efforts and patience that was needed from
her end during the hundreds of hours of research and writing that I spent on this
book. Also thanks to Aishwarya and Anand, our two kids, who despite their
young age, showed a great deal of maturity in understanding and working around
the time requirements this project posed on me. Without their help and support,
this book would still have been a dream.
I sincerely believe that this book provides a deep and balanced perspective
of the Indian economic story and hope that this in turn will answer many of the
questions of the present day managers as they attempt to leverage and include
India as a powerful player in the global economy of the 21st century.

Jayashankar M. Swaminathan
Chapel Hill, NC

Electronic copy available at: https://ssrn.com/abstract=1468246