A China consultant visiting India once said he found it odd that Indian companies did not respond with appropriate enthusiasm to his dire predictions that they would go under if they did not invest in China forthwith.
Any domestic businessman could have told him that, in fact, Indian companies are just as convinced that any company would go under if it did not invest in India.
The India-and-China investment strategy remains the prevailing wisdom of global business strategists. Yet, both views are passe, if the behaviour of Chinese and Indian businessmen is anything to go by. Their growing cross-border M&A activities are a tacit acknowledgement that the days of business nationalism are long over.
As they've begun to realise, successful business strategy is no longer only a question of investing in India or China - it's an issue of how quickly, cost-effectively and efficiently products and services can be delivered to consumers wherever they are. China and India certainly serve those purposes admirably, but so can Europe, the US, Brazil, Australia and a whole host of other countries, depending on the nature of product or service being delivered.
China's outbound direct investment or ODI rush was articulated by its government in a "Go Global" strategy in 2000 principally in view of its huge forex reserves and trade surpluses. Since then, Chinese outbound direct investment has crossed $15 billion. It is slated to touch $60 billion by 2011 but could well exceed that as government-owned companies intensify their already aggressive bids for energy assets abroad.
Chinese companies have also made several eye-catching global acquisitions, such as the PC division of IBM by Lenovo in 2005, and Siemen's mobile phone business division by BenQ.
No Indian government has had the vision to consider a coherent global strategy for its businesses. Indeed, Indian businesses have invested overseas mostly to bypass the many hurdles in doing and expanding business in the country.
It should have been, for instance, all too easy for, say, a Tata Steel to acquire a global footprint by expanding steel-making capacity hugely around its stamping ground in east India. But it now has 23 million tonnes of new capacity stuck in Jharkhand, Chhatisgarh and Orissa owing to popular protests movements. Far easier to acquire Corus, an Anglo-Dutch company several times larger.
Given Tata Motors' seemingly endless troubles over building just one car plant in Singur, West Bengal, acquiring an ailing but robust business in Land Rover and Jaguar is clearly a quicker route to global capacities than the laborious process of setting up manufacturing facilities here.
Below the radar, there are scores of smaller companies that are acquiring foreign companies sometimes several times larger than themselves as they perceive the need to expand quickly.
So it is hardly surprising that overseas M&As by India last year touched $35 billion and grew at a faster rate than Chinese ODI.
The question - yet unanswered - is whether entrepreneurs from both countries now have the capacity to digest these overseas forays in a wholesome way. The Chinese experience is by no means conclusive. For instance, one year after acquiring Siemens mobile phone business, BenQ acknowledged that the M&A was a failure, recording a $1 billion loss. Lenovo's acquisition of IBM's PC business has kept it ahead in Asia-Pacific in terms of market share, but it still lags rivals HP and Dell in global market dominance.
Indian entrepreneurs, who have a tad more experience in operating in semi-competitive markets than their mainland Chinese counterparts thanks to India's "mixed economy" policy till 1991, appeared to have fared reasonably. Companies like Asian Paints and Bharat Forge now derive sizeable incomes from their overseas ventures.
The real test of Indian companies' global business skills will be how the big overseas M&As fare and how successfully companies like Tata Steel, Tata Motors, Mahindra & Mahindra, Aditya Birla group handle global and multi-locational economies of scale.
That answer is probably half a decade away, allowing for changes to work their way through these giant corporate structures.
Still, the inexorable manner in which India Inc has set its sights overseas marks a tectonic shift from the days when India Inc whined and importuned the government for protection against global competition - if anything, some companies are now being cast in the unlikely roles of corporate ogres overseas.
One possible result of these global impulses by entrepreneurs in the world's two largest economies might be a change in the way the world does business. BenQ's chief complained that one reason the Siemens acquisition proved a failure was the interminable time its European executives took to make and execute business plans.
Around the same time, a TCL executive once complained with outrage that executives in a European joint venture wouldn't work weekends. By contrast, Indian and Chinese executives are increasingly focusing on what BCG consultants describe as "rapid fire innovation" and are willing to work virtually 24x7.
Whether they follow these precepts in their home countries or overseas is no longer the question; it's whether their "best practices" can bring them sustainable advantages anywhere in the world.
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