Canada’s missing out in India: Tata

Top executive of one of India’s biggest companies says Canadian businesses aren’t taking advantage of boom

{mosimage}TORONTO – A top executive of one of the biggest companies in India says Canadian business is missing out on a golden opportunity: India’s rise as an economic power.

Alan Rosling, executive director of Tata Group, a conglomerate with 96 companies in various sectors, said yesterday that he is “frankly, puzzled” why Canadian companies have not jumped to take advantage of the boom in India’s economy, which has begun to register growth rates almost as dramatic as China’s.

“Just as India is waking up – just as it is leaving its great Ice Age – where is Canada? Why this lack of engagement?” he said in a speech to the Economic Club of Toronto.

In an interview later, Mr. Rosling said: “It’s difficult for me to think of major Canadian companies that have well-developed Indian strategies.”

That is unfortunate, he said, because India and Canada are natural business partners, with similar backgrounds as members of the former British Empire, comparable political and legal systems, and deep links through the large and thriving Indo-Canadian community.

He said he is particularly struck by the low profile of Canadian banks in India. “Given their size, and where they rank on the world scale, and given there’s so many Indians here, you expect them to have a natural reason to be banking in India,” Mr. Rosling said.

“The American banks, the British banks, the Japanese banks have all got a significant presence in India.”

Canadian banks are much less visible, though one or two have been trying to increase their presence, he added.

The telecom sector also drew criticism. Mr. Rosling cited Bell Canada, which decided to pull out of two joint ventures with Tata Group in the 1990s.

The telecom business in India has since taken off, with more than 140 million cellphone subscribers and six million more signing up each month. Tata later sold one of the two ventures, a cellphone operation, for $1-billion (U.S.).

Mr. Rosling, a graduate of Harvard and Oxford who once acted as a leading adviser to British prime minister John Major, is the first foreigner to sit on the board of Tata Sons Ltd., the holding company of Tata Group. The company is a household name in India, with its name on everything from hotels to steel plants to software services.

It made international headlines earlier this year when it bought the Anglo-Dutch steel producer Corus for $6.7-billion, the biggest Indian takeover of a foreign company.

Mr. Rosling acknowledged that India can still be a difficult place to do business, with its famous government red tape and backward infrastructure. But he urged Canadian companies to at least “think about India, even if the answer is no.”

After booming China, India is the “second-most-exciting story in the world right now,” he said. And with its younger population and better-managed companies, it could well catch up with China in the years ahead.

“At its heart, it’s for each company to say, what does this mean for us? What is the opportunity? What is the threat? How do we take advantage of this?”

Mr. Rosling said some Canadian companies might decide to sell their goods into the Indian market. Others might acquire an Indian company, others might outsource back-office functions to India and still others might invite an Indian company to come to Canada to form a partnership.

“Each company in its industry will be different,” he said.

A recent report by the Canadian Chamber of Commerce echoed Mr. Rosling’s criticism of Canada’s poor trade and investment record in India.

It said that despite advantages such as the large Indo-Canadian community, Canada exported just $1.7-billion (Canadian) in goods and services to India last year, 0.5 per cent of its total export volume and a quarter the size of Australia’s figure.

Primary products such as newsprint, metals and paper make up most of Canada’s exports.

However, some Canadian companies have begun to put down roots in India. In partnership with India’s Aditya Birla Group, Sun Life has an insurance sales group of more than 60,000 around the country. The company says sales grew 62 per cent in the second quarter of 2007 from the same period a year earlier.

Others, such as SNC-Lavalin and Bombardier, also have a growing Indian presence.

MAJOR EXPORTS TO INDIA (2006)

1. Cereal

2. Paper and paperboard

3. Ores, slag and ash

4. Aircraft, spacecraft

5. Edible vegetables; roots; and tubers

MAJOR IMPORTS FROM INDIA

1. Knitted or crocheted apparel

2. Pearls, precious stones/metals

3. Woven clothing and apparel

4. Organic chemicals

5. Boilers, mechanical appliances

INDIA’S GDP (2006)

$1-trillion (Canadian)

GDP GROWTH RATE

9.2 per cent

GDP PER CAPITA

$969.95

INFLATION RATE

6.2 per cent

SOURCE: ASIA PACIFIC FOUNDATION OF CANADA

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