When a Great Industry Globalizes: Indian Conglomerates Pioneering New Trends in Industrial Globalization

Indian multinational enterprises (MNEs) are not only internationalizing by selling abroad. They are also producing abroad, and even, for some, globalizing their production processes by rethinking their supply chains, and entering new value chains of global opportunities. In this chapter, we suggest that, whether they conduct outward foreign direct investment (OFDI) by means of greenfield investments, acquisitions, or partnerships, Indian MNEs must, in fact, combine assets and resources from both emerging markets and developed countries.2 This idea has two major implications. First, MNEs will have to relearn their own lines of business again from scratch, acquiring local knowledge and also rethinking their capital-labor ratio; that is, they must largely reinvent their organizations. While they need to capitalize on their assets quickly in order to climb the value chain, they will also need to continue pursuing technological development and internationalization. Second, rather than moving towards convergence, this will lead to the creation of new opportunities for numerous companies. Original business models that are being devised in India today focus on accelerated technological development; rapid capitalization by means of diversifying client portfolios; interindustry technological synergies; the reorganization of production, design, and distribution; the reintegration of specific human, mineral, or energy resources; new financing models; etc.