Economy

Tata has China in its sights

By Wang Xing (China Daily)
Updated: 2010-12-17 10:57

MUMBAI, India - Sitting in a conference room at Bombay House, a privately owned building in the heart of Mumbai that dates back to the 1920s, B. Muthuraman looks like most of India's successful businessmen with the ambition to make a difference in the world.

Unlike many Indian executives who traditionally focus on the United States and Europe, however, his sights set on his Chinese neighbor.

As the chairman of Tata International and vice-chairman of Tata Steel, two major subsidiaries of the Tata Group, one of India's largest multinational corporations, Muthuraman said he believes his company needs to accelerate the pace of its development to keep pace with China, as global economic power shifts from the West to the East.

"India and China represent the future. We will become two of world's three top economies over the next 20 years," he said. "So there is a need for India and China to understand each other on the business front."

The two countries have a history of trade and cultural exchange spanning thousands of years, though most Indian enterprises did not realize the scale of China's importance until the latter part of the 20th century.

Tata is one of the first Indian companies to have contact with China. Around 1859, Tata's founder, Jamsetji Tata, was sent to Hong Kong to open a branch of his uncle's company. Several months later, he moved to Shanghai, where he remained until 1863.

Tata's relationship with China terminated in the 20th century and was only resumed in 1996, when Tata International set up an office in Shanghai to trade steel and other products, signaling the start of Tata's business in modern China.

Last year, the Tata Group's turnover in China was $1.4 billion, or about 6 percent of its overall business.

Of the group's $1.4 billion turnover in China last year, 50 percent of it derived from Tata's auto businesses, which sell luxury cars like Jaguar and Land Rover after acquiring the brands from British carmarker Jaguar Land Rover in 2008.

According to Muthuraman, the group is now poised to expand its other businesses in China.

The group has already introduced most of its businesses to China, including steel, consulting, IT outsourcing and hotels.

In 2007, Tata set up a joint venture with Zhejiang Tea Import & Export Co Ltd to manufacture and market green tea in the country.

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Muthuraman said he hopes China will be receptive to companies like Tata becoming involved in China's economy like Chinese businesses.

"China has tremendous growth potential," said Rajat Mathur, chief sales and operations officer for Asia-Pacific and China of Wipro Technologies, India's third largest software services provider.

The company announced earlier this month that it plans to triple its payroll in China over the next three to four years, in an effort to increase its presence in China's booming IT market.

Mathur said China is strategically well placed in the global supply chain for any company, whether in IT services or consumer products.

Despite the increasing economic ties, the political relationship between two of Asia's biggest powers remains "very fragile, very easy to damage and very difficult to repair," said China's Ambassador to India Zhang Yan.

For Muthuraman, the best solution to China and India's political disputes may be businessmen like him.

"Over the past 30 years, there has been mistrust between India and China. And that has to be broken down," he said. "The way to do it is through economics."