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India’s Influence Increases

On June 25th, junta-appointed Prime Minister General Surayud Chulanont was dispatched by his masters to India to improve economic ties with Thailand. He is just one of an increasingly lengthy line of supplicants seeking to do business with a country that, within living memory, was regarded in business terms as little more than a perennial basket case. Travel to India and be assailed by the armies of beggars and the dirigiste government that laid a particularly heavy hand on the range of government owned, controlled or just plain influenced industries.

That changed in the 1990s when a long overdue series of reforms began to sweep through the government and its relationship with the economy. This resulted in the opening of at least some sectors of the economy to international competition in the globalizing world everybody else also inhabits. The success stories resulting from that opening have become well-known – the offshore call and customer relationship centres, the software industry, the entertainment hub known as Bollywood. However, even though these success stories have become quite famous, they tend to overshadow the fact that most of the rest of the billion plus population lives in the same conditions of poverty they have always endured. Still, businesspeople have taken the opportunity to be more competitive internationally and, just as supplicants travel to New Delhi to woo the new Indian middle classes, so too are Indian businesses moving into the countries of ASEAN to exploit their own advantages. That sector is increasing in scope and size rapidly.

Indian merchants have been traveling to Southeast Asia for many centuries and the Indian influence in is clear from architecture, from religious practices, from language and from many political institutions. For Indians in ASEAN, therefore, there is a sense of cultural familiarity which, in addition to the many ethnic Indian communities found throughout the region, makes it convenient and even pleasant to wish to do business here. This is one significant advantage.

It is related to the fact that it is necessarily, therefore, easier to induce leading Indian staff members to relocate overseas. The tendency for many internationalizing Indian firms is to take a large number of staff members into a new market and, while they are there, rapidly train local staff so as to be able to replace the Indians. This approach features both a high level of importance paid to human resources and also to the need to reduce expenditure as much as possible. These seem to be common characteristics of many Indian companies coming to ASEAN.

A second area of competitive advantage derives from the later development of the Indian firms. They can see what other firms have attempted in the region and what has worked and what has not worked. Drawing strength from the successes and avoiding the failures provides them with an opportunity to be competitive to an extent that companies which have already become fixed in their approach to internationalization may find it much more difficult to achieve.

Buttressed by a growing domestic market and an excellent educational system, India’s companies are also increasingly able to call upon economies of scale and scope to enhance their international competitiveness.

Size, intelligence and the ability to learn form others represents a potent brew. It is not surprising that India’s companies are achieving the success in ASEAN that they are.

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