Why worry? Isn’t this is India’s golden global moment, to be celebrated? Yes. But view it from the underside: the second great exodus.

To keep India growing and industry productive, several reforms are needed. Infrastructure for better distribution, access to natural resources to fire manufacturing, land reform for an agri and industrial revolution and massive education and vocational institutes to train talent. These are not forthcoming. So private Indian capital, which had been investing at home these past five years, is now moving to foreign environments that will let them prosper. They’re getting better credit, impartial and institutionalised regulation, superior infrastructure, greater opportunity, innovation incentives. “One of the major drivers of going international is to get out of the clutches of a single economy running your business,” said Ratan Tata in 2005. He could not have been more prescient.

Indian companies create benefits wherever they go abroad. According to Amit Mitra, director general of FICCI, in the last two years Indian companies have created an estimated 70,000 new jobs in the course of their global acquisitions, half of those in the US alone. A Ficci-US India Business Council study gives examples. Essar Steel, which acquired Minnesota Steel and call centre Aegis, will add 1,300 new employees in its US operations by 2009, up from 7,200 currently. In Europe, drug-maker Wockhardt will create 1,600 jobs for its new generics manufacturing operations there. Six of every 10 products that Ranbaxy sells in the US are now made right in New Jersey — competitively. And one of every three parts of a Mahindra tractor are made in the US. Investment in Arica is incalculably beneficial.

... contd.