All this is jobs, expertise and sophistication they could be creating at home. They are, of course, creating jobs at home. But consider: China doesn’t have to go abroad to get technology, international management, scale, global market access and category leadership, because its government allows foreign investment into the country, which in turn propels China forward. China has its problems, but it still creates more employment through open investment policies than India does. Home grown Chinese companies benefit from the spillover of these attributes.

Indian companies, on the other hand, work with their hands tied behind their backs at home, imprisoned by both regulation and politics. So it’s easier to go seek their fortune on more even global ground. Those compulsions have grown more urgent recently. “The level of frustration of Indian business and entrepreneurs has peaked in the last year, fuelled by the fact that they are hooked on growth and frustrated by India’s problems,” says Rajiv Chandrashekhar, a telecom entrepreneur and member of Parliament. A month after the Communist party left the ruling coalition and despite the entreaties of industry, Prime Minister Manmohan Singh is still hesitant about enacting critical reform to counter the slowdown in investment.

Some Indians think going abroad is a natural progression of corporate ambitions and serendipitous economics. A decade ago, they say, Indian companies didn’t have the capital to expand. Now they do, and the weak rupee has helped. Plus they have the credibility to attract both local management and customers with quality products. And they are growing ferociously ambitious and confident. “Indian companies are no longer in a competitive set which is purely domestic,” says Alan Rosling, director of Tata Sons. “Tata Motors can’t win against Toyota unless it goes global and has a meaningful market share.”

... contd.