A New Perspective on India’s Global Business Leaders
For years, experts claimed that companies from emerging markets could only succeed in their own backyard. But new research reveals a dramatically different story about Indian multinational enterprises (EIMs) – one that shows them competing successfully on the world stage, often outperforming established global giants in their international reach.
Key Findings:
- Global, Not Just Regional Players
- Indian multinationals operate extensively in both developed and developing markets
- Many have higher international sales ratios than Western competitors
- Several Indian firms derive more revenue from overseas than their home market
- The Numbers Tell the Story
- 62% of Indian multinationals’ subsidiaries are in developed markets
- Over 53% of their sales come from international operations
- Companies like Suzlon Energy and Dr. Reddy’s generate 80%+ of sales overseas
- Leaders of the Pack Top performing global Indian companies include:
- Tata Steel (operations in 46 countries)
- Wipro (77% foreign sales)
- Dr. Reddy’s Laboratories (83% foreign sales)
- Suzlon Energy (80% foreign sales)
- Strategic Approach to Globalization Indian companies expand globally through:
- Direct investments in new operations
- Strategic acquisitions
- Technology partnerships
- Market-specific subsidiaries
Why This Matters
This research challenges conventional wisdom about emerging market companies in several ways:
- Demonstrates they can compete globally, not just regionally
- Shows sophisticated international strategies
- Reveals higher levels of global integration than previously thought
- Suggests new theoretical frameworks are needed
Looking Ahead
The study points to a new era of global competition where country of origin matters less than:
- Strategic capabilities
- Innovation capacity
- Market understanding
- Operational excellence
Academic Abstract:
Contrary to contentions in earlier literature that emerging multinationals are only regional players, the evidence on the globalness of Indian firms presented in this study suggests that a number of emerging multinationals are global firms. Their strategies target both the developed and the developing markets and the intensity of their overseas operations is comparable with or far greater than those of the world’s leading multinationals. Many of these firms have greater sales or capital assets outside their home base. Indeed, many of them qualify as global firms as they have a significant presence (over 10% of sales) in each of the four regions (the triad and the non-triad developing regions) and no region alone accounts for more than 50% of their global sales. The study of the transformation of emerging multinationals into non-home region players provides considerable potential for better understanding management theories and practices.
Learn More:
Full citation: Pradhan, Jaya Prakash and Raj Aggarwal (2011), ‘On the Globalness of Emerging Multinationals: A Study of Indian MNEs’, Economia e Politica Industriale – Journal of Industrial and Business Economics, 38(1), pp. 163–180.
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