What is the future of Indian MNCs?

Question

i need to prepare a presentation on this. plzzz help me out.

Answer 1

This question is too general to have a single specific answer.  It is like asking what is the future of American MNC's - the answer really is that it depends on the MNC.

But, in general, here are what I think are the general directions Indian MNC's will go in.  As time goes by it will become less and less feasible for India to protect any industry through import barriers as India becomes more globalized.  Indian MNC's will divide into those that have built the tools and structure to handle global competition and those that have not.

Many Indian companies like Infosys, Tatas, etc. have aggressively transformed themselves into global competitors that take on the best in the world on their own terms.  They will probably continue to hone their skills and develop further.  The absences of global trade barriers is probably an advantage for them since they are really looking for a fair fight, not hiding from it.  Others will probably struggle and their odds of surviving and thriving depend on their ability to transform.  Air India is one example I can think of. VSNL, BEL, etc. may be others.  I am not familiar enough with the Indian landscape but you can probably identify the companies that prefer to hide behind trade barriers and those that have no fear of open competition.  As time goes by the true global players will not only survive but start to replace some of the current global MNC's.  The rest will probably wither and become history.

Even within those that survive, there probably will be different classes.  Today a lot of globally successful Indian companies have initially succeeded primarily based on low cost.  That is a brutal business and can only take a company so far - especially as the indian skilled labor market starts to get very tight and wages rise.  The smart companies are looking to shift their model more to value added and high skilled services that can produce a higher profit per employee rather than merely surviving based on low cost competition.  Those companies that successfully make that leap will be among the biggest of global leaders in the future.  Look at Tata buying Jaguar or companies like Infosys, Wipro, etc. looking to move into strategic consulting, various commodities companies like the Mittals (and Tatas again) buying up other companies across the world.  This essentially is to build up global strategic expertise rather than being merely low cost competition. At least a few will succeed and will end up being true global giants.  My own guess is that Indian companies will ultimately be more successful than Chinese at making this jump simply because they are better steeped in the capitalist model and have far better corporate governance and transparency.