It's a difficult pill to swallow, but at a time when India Incorporated is basking in the glow of overseas conquests, A.T. Kearney ranks India 61st in its list of the world's most globalised nations-out of 62 countries considered! Only Iran ranks below India, and countries like Pakistan, Bangladesh, Uganda and Botswana are comfortably perched above. Singapore tops the A.T. Kearney/Foreign Policy magazine Globalisation Index-the us is at #3-which is measured across 12 variables across four broad areas: Economic integration, person-to-person contact, political engagement and technological connectivity.

So, have the good consultants got it all wrong, or is the survey a pointer to the reality that, some mega overseas acquisitions notwithstanding, India is still largely a blinkered economy, revelling in the consumption high-jinks of a burgeoning domestic middle class? The truth is somewhere in between. For starters, within the parameter of economic integration, A.T. Kearney prefers to look at foreign direct investment (FDI)-the amount of overseas funds being pumped into the country's assets (except stocks and bonds)-rather than the amount being invested abroad. And the latter may well tell a more vivid story, what with the latest cross-border data indicating that outbound investments are comfortably higher than the inbound greenbacks. According to Grant Thornton, investments in overseas acquisitions in 2006 till October are worth Rs 70,740 crore, as against the inbound figure of just Rs 21,015 crore (though doubtless skewed by the humungous Tata-Corus deal). Perhaps if the consultants had outbound investments as a parameter within economic integration, India would have climbed up a few notches in the globalisation index.

Yet, it's not as if India would have been able to propel itself into the top 10 or even 20 on the back of the surge of overseas buyouts in the recent past. Data compiled by Thomson Financial reveals that countries like Brazil, Mexico, Belgium, China, Hong Kong, South Africa and the UAE have bought assets in foreign lands that are worth more than what India Inc. has. According to Thomson, India has a meagre 0.7 per cent share of the global pie of cross-border acquisitions.

Is that reason to be despondent? Not really. That India is the one of the fastest-growing world economies, and one of the few whose corporate sector is recording robust double-digit growth (which will sustain for some more years), places India ideally to step up the quest for overseas resources and markets. The burst of outbound acquisitions will increase non-incrementally as size and scale become the imperatives. Indian companies will then be playing vital roles globally on various fronts, worldwide employment generation being just one of them. India Inc. has arrived. Now it has to conquer.

Short-term Solution

Mahindra & Mahindra must be thrilled that French auto maker Renault has chosen it over Suzuki as the India partner for a new line of Renault vehicles. It's easy to see why. M&M is the youngest of all players in the passenger car market. Its spiffy SUV, the Scorpio, was launched just over four years ago, and it clearly is no competition to Suzuki, although the Japanese car maker itself is small by global standards. Yet, if the Carlos Ghosn-led Renault has decided to go with M&M, it's because of the partnership the two already have for manufacturing the former's sedan, the Logan, in India. Indeed, Ghosn referred to "the deepening and enlarging of our partnership" when he commented on the tie-up. M&M's Anand Mahindra, too, spoke of the "chemistry that we discovered when the Mahindra-Renault joint venture was born".

Like most joint ventures, this one is born of convenience as well. Renault, and the other part of its automotive empire, Nissan, watched from afar a burgeoning domestic auto industry, even as its global rivals rode in with big plans. Renault has to cover plenty of lost ground and the surest way of getting the basics right would be to collaborate with someone who knows not just the political environment, but also the fragmented supply chain and the consumer. Mahindra, on the other hand, cannot afford to be a one-car company, especially if it has ambitions of carving out a global niche for itself. It needs access to world-class automotive technology and it needs it now. "Mahindra & Renault's joint vision is defined, however, by more than just these factors. It is centred on our common wish for growth that will only come with making products to suit the customer's needs around the world," Mahindra said soon after the deal was signed in Paris. The first cars from the new JV should roll out by the middle of 2009.

It would be unfortunate if the deal were to make M&M complacent. Generally, JVs walk on thin ice and in this case, M&M (which has been down that road once before with Ford) is clearly the weaker partner. With the Scorpio, M&M proved that you didn't need a billion-dollar budget to launch a new vehicle. In fact, the Scorpio cost just a little over Rs 500 crore to develop. Its young and enthusiastic engineering team has some unique capabilities, and M&M's effort should be to encourage more such innovations independent of Renault. JVs can't be an alternative to innovation. Rather, they should only be a stepping stone to self-reliance.

Natural Allies

Need India fear Democrats? Perhaps not

The US electorate has put president George W. Bush on notice. The Democrats have taken control of both the Senate and the House of Representatives. This is likely to leave Bush a lame duck President for the last two years of his term. What does this mean for India and its engagement with the US?

Predictably, perhaps, the entire focus has been on whether or not the nuclear deal between the two countries will pass. The Democratic Party has made the right noises and indications are that there is broad bi-partisan support for the agreement. The quibbling, it seems, is over the fine print. But that is not the point. The fact is that the nuclear deal is very important and has high symbolic value, but it is not the only yardstick by which to judge overall Indo-US relations.

Countries have interests, and usually form alliances based on a convergence of these. There is a clear convergence of the interests of India and the US on a wide gamut of issues-military, economic and political. Both are democracies and both face threats from Islamic terrorism. Result: there is now greater military-to-military co-operation between the two than at any time in the past. In the political field, both countries have a shared interest in ensuring peace and stability in West Asia and Afghanistan as, indeed, they do in building up this country as a counterweight to a resurgent China.

But it is in the economic field that the scope is the greatest. India needs American money and technology to maintain and improve its current rate of growth. Indian companies now regularly access funds from the US for financing expansions and takeovers, while us companies outsource services and R&D to India to keep themselves competitive. And India remains among the top providers of quality human resources to us universities, companies and research labs.

Only the very naïve, or the ideologically motivated, will stake these other, vital interests, at the altar of the nuclear deal. Prime Minister Manmohan Singh has displayed a previously unsuspected sagacity in steering this relationship through the fractious Indian polity. The need of the hour is for the Democrats to show the same level of maturity. The points of convergence far outnumber those on which the two countries have serious differences. Individuals come and go, but a country's interests remain the same. This is what makes India and the US natural allies. And while we hope that the nuclear deal sails through, the relationship is now too wide-ranging for it to be derailed by one piece of legislation.