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January 16, 2008

India's Tata sets sights on China

India's salt-to-software conglomerate Tata Group wants to become a major player in China across a range of businesses, a company executive said.

At least four major Tata companies are keen to enter China and are actively exploring opportunities, said Girija Pande, who heads the Asia-Pacific arm of Tata's IT subsidiary.

Tata Group's auto manufacturing arm, Tata Motors, is in talks with Chinese counterparts to set up joint ventures in the nation, according to Pande. The automaker is betting on its experience in the subcompact sector to break into China's booming car market.

Last week, Tata Motors launched its $2,500 Nano model, the world's cheapest car. The low-cost "people's car" is designed to appeal to India's 8 million motorcycle owners. The company is also looking to test the car in other countries, including China, once it makes its mark at home, said Pande.

Tata Group also wants to expand into China's hotel and chemical industries. The group's telecom operation is looking at providing value-added telecommunications services.

"These are among the most globalized businesses in our group," said Pande, "Once they succeed in China, the smaller subsidiaries will start to move to China."

Tata Group is one of India's largest private conglomerates, with over 98 companies in various sectors. Over the years, it's used mergers and acquisitions to achieve its globalization strategy.

"We are still at an early stage in China," said Pande. "But the country is on our top-five list as we try to capture the opportunities beyond the Western markets."

Tata Group set up its representative office in China in 2006 as a catalyst for its entry into China. The company has only three group offices globally. The other two are in the UK and the US. Tata Group's total revenue in the last fiscal year was about $29 billion, but only $300 million of this was from the China market.

Tata Consultancy Services (TCS), Tata's IT services subsidiary, accounts for the lion's share of the group's revenue in China. In 2002, TCS established a wholly owned subsidiary in the nation, the first major Indian IT services company to do so.

Over the years, TCS has won a slew of deals from local companies, which are investing heavily in IT systems to improve efficiency and management standards. In late 2006, TCS won a landmark deal worth $100 million from Bank of China, the first major IT contract bagged by an Indian company with a Chinese firm.

Courtesy Xinhua

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