An Attack on India's Sovereignty


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The Financial Attack

               (i) TNC Take-over of Indian Industry

               (ii) The Compradors, as Vehicles for Foreign Capital

                       (a) Info-tech

                       (b) Reliance

                       (c) The Tatas

                       (d) The Birlas

                       (e) Other Comprador houses

                       (f) The NRIs


Lenin said "Finance capital is such a great, such a decisive, you might say, force in all economic and international relations, that it is capable of subjecting, and actually does subject, to itself states enjoying the fullest political independence". This was said eighty years back. Since then, and particularly in the period of globalisation, with its gigantic Mergers & Acquisitions, finance capital has taken on a size unimaginable as compared to the days of Lenin. With over $ 1 trillion (a trillion is a thousand billion) of speculative capital roving the world’s financial markets daily, and with the assets of the top three billionaires more than the combined GDP of all the least developed countries (and their 600 million people) put together, one can just imagine the power these corporate giants wield today. The greater their size, the greater is their arrogance and ruthlessness. Before them, the Indian (comprador) bourgeoisie are midgets, playthings to be moulded to suit their purpose. And the Indian government, who’s entire GDP is only a fraction larger than the US’s yearly defense expenditure (of about Rs 18 lakh crores), crawls and cringes at the dictates of dollar-power.

In the latest ‘forbes’ listing (Sept. 2002) the top wealth of $900 billion. In other words a mere 400 families have a wealth equivalent to more than twice India’s GDP!!

The new round of financial attack on the country, which has come under the label of globalisation, has to be seen in the above context — i.e. the characteristic ruthlessness of finance capital as outlined by Lenin, and as proved by the entire last century; and also the growth in its size, not only in quantitative terms, but also relatively, vis-à-vis the decline of the backward countries of the world. In political terms too, with the retreat of both the communist as well as the national liberation movements of the world, the arrogance and power of Big Capital has acquired monstrous forms, best personified in the present Bush-speak.

So, we saw in the last Chapter, over $73 billion came in as foreign capital (FDI+FII+GDR) in the last decade, foreign loans having crossed the $100 billion mark, and numerous other entanglements linked to foreign capital (yet to be mentioned), has flowed into our country.

Where then do these huge sums go? It can be summed up in a single sentence: To capture markets (both commodity and financial) and sources of raw material for the giant TNCs of the imperialist countries. Earlier the colonialists exported their goods to countries like India, to seize markets; today they export not only goods, but primarily capital. The latter has a double advantage: First, by exporting capital and setting up branches (or joint ventures — JVs — with local compradors) of their industry in India, they not only capture the markets in India, but make super-profits through exploitation of cheap labour. So, for example, if a cake of Lux soap costs Rs 1 to manufacture by Hindustan Lever in India, it would cost say Rs 3 + transport to manufacture in the UK, by the parent company, Unilever. Therefore, by setting up a plant here the TNCs are able to increase their profits 3 to 5 fold. Secondly, by having a local or ‘Hindustan’ tag on it, it gives the appearance of being ‘Indian’, to thereby avoid the wrath of the masses; and this becomes all the more misleading in JVs with local compradors.

Foreign capital has just one goal — maximization of profits for its parent company — no matter what route it takes, whether it is a wholly-owned subsidiary, a JV, a technical collaboration, or any other means used. The method chosen depends on various local factors, like the extent of resentment to them and the overall political scenario in the country. But, the preferred route is through wholly-owned subsidiaries, with ‘Indian’ managers as their front-men — as it is through this route that returns can be maximized, amounts shared with locals minimized, and it can gain the maximum freedom for manipulations, frauds, and illegal transfers abroad, without the necessity for public disclosure of its accounts.

It is for this reason we find that in India, during the first phase of globalisation, the TNCs came into JVs with minority shareholding, of late they have not only been increasing their hold to a majority stake, but also, been pushing up their holding to 90%. The reason is, that with 90% ownership of paid-up capital they are allowed to de-list from the stock exchange, and so, their accounts need not be made public.

Now in this Chapter we shall look at two things. First, how these huge investments are being used to swallow up local industry, and how it has penetrated to take control of entire sectors of the economy. And second, how the remaining so-called indigenous big bourgeoisie, is not really ‘indigenous’, but tied to foreign capital in a web of intricate links — making it thereby nothing but another arm of imperialist penetration.

i) TNC Take-over of Indian Industry

In the 12 years of globalisation vast areas of Indian industry, commerce and finance, has already been swallowed up by foreign capital, and more and more are falling prey to their onslaught each day. Not a day passes without these predators grabbing something new. Like man-eaters, they are on the continuous prowl. As an official CMIE (Centre for Monitoring the Indian Economy) report says:

TNCs are on an M and A rampage. Almost all the major sectors of the economy have witnessed the entry of TNCs. Instead of setting up fresh Greenfield capacities, they have preferred to either acquire existing companies or existing capacities. An increasing number of Indian corporates unable to withstand the fiercely competitive environment, have found an easy and lucrative way out by selling their assets to the TNCs... Eight years since the reforms had set in, we see the sell-out to the TNCs as the fastest and most significant "globalisation" of the Indian business houses [CMIE 1999].

Given that the CMIE has become the most authoritative source material on Indian business and the Indian economy in general, this statement from it, is significant.

And it is the Indian government that is continuously whetting its appetite, feeding it with human blood (Indian), extracted from policies that ruin the masses and turn them over to the man-eaters. Continuous de-regulation of controls on FDI & FIIs finally transferring the bulk onto the automatic route, is one such policy. A continuous increase on the cap of foreign capital in Indian companies, now taking both to 100%, is another such policy. Most important has been the continuous dilution of the government’s own Take-over Code — first ‘liberalised’ in 1990; then again in 1994; and finally completely opened out to the ravages of the TNCs, on the recommendations of the Bhagwati Committee. In addition, the government has passed a host of other legislations, given monetary concessions, and signed deals, which have facilitated these take-overs. One of such notorious legislations is to be the New Patent Act, which is due to come into force in 30 months, on Jan.1, 2005, by which process patents will be converted into product patents. Besides its damage to the agrarian commodity market and the small scale sector, merely in the pharmaceutical sector 20,000 small units face closure and even medium-sized companies are likely to fall prey to the TNCs, as most do not have the capacity to develop indigenous R&D (Research & Development).

It is such policies that have consciously facilitated the foreign take-over of Indian enterprise. If done by a foreign government it would be understandable, but when done by traitorous Indians, one has to go to the roots of the relationship between these rulers and their foreign sponsors. Of course it is all being done in the name of the inevitability of globalisation, a sort of TINA effect (There Is No Alternative). The fact is that while the Indian market and economy is being prised open, the US is becoming more and more protectionist. And while globalisation applies to capital and commodities, it does not apply to human labour — US and Europe are putting stringent legislation against immigrants, and whipping up hysteria against coloured foreigners.

Whatever, let us look at the reality at the ground-level of the extent to which companies have been taken over by foreign capital, and to what extent they have swamped the economy. Unfortunately there is no over-all documentation of these facts, as both imperialists and compradors, would not like to picture the over-all reality. So what we have done is compile a list, which presents a sample of what is taking place. Though it is in no way the total picture, it indicates the trend. In fact, many of the take-overs in the small and medium sectors do not even get media coverage.

The following list gives the name of the foreign company in the first column; the second column gives the name of the Indian subsidiary or JV; the next two columns give the percentage of the foreign company’s share in the paid-up equity capital of the ‘Indian’ company — the ‘earlier’ percentage, and the ‘current’ percentage, the last column has some general comments. Some of the percentages given in the ‘current’ column have gone up, since the figures were taken from the respective sources. Table IV.1 has been compiled from cuttings of various business newspaper/magazines over the past five years.


See Table 4.1


This Table only gives a sample of how the TNC penetration is growing in the country. It also shows their close inter-linking with India’s comprador big bourgeois houses. This penetration is continuing apace in the form of a continuous wave of Mergers & Acquisitions, the bulk of which are foreign companies taking over ‘Indian’ ones. So for example, in the three-year period 1997/98 to 1999/2000 of the total take-over value of Rs 11,600 crores, 80% were by foreign companies. 1 This figure has now skyrocketed to Rs 36,200 crores ($7.4 billion) in just the first six months of 2002 — a nine-fold increase over the earlier six months 2. The take-over spree is obviously racing ahead!!

Looked at in another way, on March 31, 2001, the combined overseas investments in equities of Indian companies was $22 billion (over rupees one lakh crores), which controlled 15% of India’s total market capitalization. 3 In just 2001 FIIs pumped in $ 2 billion into India’s stock exchanges. In many of the blue chip companies FII holdings have already crossed the 24% benchmark, 4 and is continuously rising, given that the government has now allowed up to 100% FII in Indian companies.

If one looks at TNC penetration sector-wise its result are astounding. In refrigeration the TNCs have a 62% market-share while in cold drinks it is nearly total. According to Aspects of India’s Economy (No.25; Jan – March 1998) the rough percentages for various consumer goods in end 1994 were: Instant milk foods 90%; malted Milk foods 87%; Bread 42% (this would have now increased with the sale of the PSU, Modern Bread, to Hindustan Lever); Biscuits 17%; Confectionary 41%; Cigarettes 97%; Footwear 26%; Pharmaceuticals about 25%; Medical Dressing 97%; Paints 29%; Soaps 44%; detergents 39%; cosmetics 20%; dental care 78%; audio equipment 47%; cassettes 43%; etc. The major part of the remaining market is taken up by collaborated companies, where the TNCs are increasingly taking a controlling interest of those companies. Since 1994, the percentages would have increased substantially.

So, for example, in photocopying machines, Modi Xerox (a collaborated company) has 68% of the market. In this, Xerox has hiked its share to 68%, taking over the management of the company. Before the present scandal broke out, it had planned to increase its stake to 100%. A good example of a recent spate of take-overs, is of the industrial house Escorts. In just the month of July 2002 four of its units were taken over by the TNCs. First it sold out all the balance of its shares to its JV partner, Yamaha. In Escorts JCB Ltd. it sold out to its partner, J.C.Bamford(UK). In Escorts Class Ltd. it also sold out to its partner Class (Germany). And it sold out 50% of its stake in Escorts Mahle Ltd. to Goetze India Ltd (which is controlled by Federal Mogul of the US).

A similar situation exists in the automobile, electronics, two-wheeler, etc. sectors. By no stretch of the imagination can these collaborated companies be called indigenous. Even with a holding of 20 to 25% the TNCs dictate terms and de facto control the company. With the present increase in TNC holdings there is no question whatsoever to consider these as ‘Indian’ companies. But, more on this, in the next section.

Foreign domination in the media has been virtually total even before 26% FDI was allowed in the print media (and 75% in the non-news section). Both the advertising agencies and the advertising companies are dominated by the TNCs, while a handful of major comprador houses comprise most of the balance. With advertising revenue amounting to about 55% of the media’s total revenue (compared to about 30% a few decades ago), it is these magnates who will determine media policy. The top 5 advertising companies, all controlled by foreign companies, account for over 50% of all advertising. In fact, here too, it was the lifting of limits on foreign capital in the advertising agency business, that opened the floodgates. The Union Cabinet approved 100% FDI in films and advertising through the automatic approval route in March 2002. Global conglomerates, like WPP, TWT, O&M, BBDO, DDB-Needham, and JWT have gained a majority control in Indian Advertising and bulk of the market share.

In addition, out of the 15 top advertisers, which account for 75% of advertising revenue, all except four (Dabur, Tata, Bajaj, and Videocon) are TNCs. But the domination does not end here. Now also the top 8 market research agencies, which account for 66% of the business, have been taken over by TNCs. Market research agencies conduct surveys in order to determine the priority of programmes, and therefore influence in a big way the types of programmes sponsored. In 2000 the biggest Market Research Group, the Rs 310 crore ORG-MARG, was taken over by the Dutch company VNU. Finally, ‘media planners’, owned by foreign cooperates, have been entering in a big way. Most of these PR agencies cater to the interests of foreign cooperates and their JV partners.

In TV, Murdoch and other such foreign companies already play a big role; and now with the print media also being opened out to FDI, foreign domination in this most sensitive sector, will be near total. It is this powerful media that plays a major role in creating public opinion in favour of Globalisation. With such extensive foreign domination, hardly a word is ever allowed against the entire process of globalisation. And even if a word of dissent is allowed here and there this is drowned in an avalanche of pro-globalisation trash. Besides, the strong consumerism pushed by the advertisers and the programmes they sponsor, affects the subconscious, subtly impregnating a pro-west atmosphere. Internet, and the so-called hi-tech communications, has further added to this, particularly amongst the middle-classes.

In mining there has been a spate of collaborations thereby completely turning over one of India’s major natural resources to the imperialists. Even in the petroleum sector the oil giants have begun their forays. Both Shell and Exxon have made their entry, with Shell announcing a massive plan for India. ONGC has handed over the very lucrative business of oil exploration to the private sector. Besides Reliance, Essars, etc. TNCs have also entered this field.

The government is now even pushing for allowing FDI into retailing, to tap the huge $180 billion market. In India most retailing is done by the small trader. Once opened out thousands of small shopkeepers will lose their business, particularly in the high-end section.

If one now turns to the financial sector the domination of foreign capital is even more, and is growing at a rapid pace. To take some examples:

Two of India’s premier investment banks, HDFC and ICICI, are already virtually in foreign control. HDFC has 72% foreign capital, and ICICI has 49% foreign capital. Foreign (all collaborated) mutual funds have increased their market share from 2.1% to 14.3% in just three years. For example, TVS’s financial arm, SFL (Sundaram Financial Ltd), has three different collaborations with separate FIIs for its mutual fund, general insurance and car finance businesses. And now, it is only a matter of time before all Indian banks pass into foreign control. With the government slowly divesting control and deciding to reduce its stake to 33%, the wolves of foreign banking are already on the prowl, with 11 of the smaller banks (with equity base between Rs 6 and Rs 49 crores) under immediate threat — these include Vyasa Bank, Centurion Bank, Indus Ind Bank, Bank of Punjab, etc. The foreign banks would require a mere Rs 800 crores ($170 million) to swallow up these 11 banks, and establish a vast chain overnight, at minimum cost. It is said, that, the take-over of the others will also proceed, once they have "set their house in order" — i.e. reduced their staff through huge VRS payments and settled the NPA (non-performing assets, a nice-sounding term for the huge bad debt, mostly due from big business, amounting to rupees one lakh crores) problem.

Even the 25 odd foreign collaborated Venture Capital Funds have grown exponentially since 1998. In just the two years from 1998 to 2000 their collective investment base has increased from Rs 8,000 crores in 1998 to Rs 20,000 crores in 2000. These 25 VCFs are nothing but foreign capital entering piggyback on Indian big business, like the KVP Ventures (Kerry Packer + Ketan Parekh + Vinay Maloo of HFCL fame), or eVentures (News Corp + Mittals). 5

Besides banking, insurance, by being opened out to over 26% foreign capital, it also is only a matter of time before they sweep away the public sector insurance companies. Even before the new insurance regulation was passed, the major insurance companies of the world had already tied up with one or the other of India’s big comprador houses, in expectation. Now they are here in a big way, demanding that the 26% cap be increased. This change too is only a matter of time, as it was only after enormous pressure that the BJP-led government put this cap.

Such then is the massive onslaught of foreign capital in India. In the period of the so-called second-generation reforms (since 2000) its pace of growth has increased substantially. With the BJP combine going out of its way to please any and every whim of the Americans, it is bowing over backwards to implement all its instructions, at a speed that even surprises their authors. Things have gone so far that even the ‘swadeshi’ mask has been torn off. The most recent example of this was the RSS officially endorsing the entry of foreign capital into the print media, even though this was opposed by most journalist unions.

Now let us turn to the compradors, propagated widely as the so-called indigenous sector.

ii) The Compradors, as Vehicles for Foreign Capital

The comprador big bourgeoisie in India is tied by hundreds of threads, visible and invisible, to foreign capital and the TNCs. This was so before the period of globalisation; it has increased enormously in the past decade.

With the wholesale opening up of the economy to the ravages of foreign capital, they are unable to compete on a ‘free-market’, as the relative size of the two are exceedingly disproportionate. It is like competition between a giant and a midget. Take just one example, of the AT&T-Tata-Birla telecom combine in India. While the sales of the entire Tata empire (84 companies) was $7.5 billion in 2001 and that of the two Birla brothers combined was $4.3 billion, that of AT&T was roughly $63 billion — i.e. six-fold more than Tata and Birla combined. From this enormous difference in sizes, would it not be obvious that it would be AT&T who would call the shots in India’s biggest telecom establishment? And if we see that the bulk of the Indian big business houses (except the top 8, i.e., in order of size, Reliance, Tata, Birla, TVS Iyenger, Thapar, RPG, Bajaj, and Mahindras) have sales of under $ 1 billion (in 2001) their relative bargaining power vis-à-vis the TNCs is insignificant. Added to that the government’s policies completely favour the TNCs, whether it is in the Take-over Code, or in the reduction in import duties, or in tax concessions and tax holidays, or in the removal of caps on foreign capital, or in free facilities granted, etc. etc. The two combined make a highly poisonous mix that forcing them to depend more and more on foreign capital, or to sell-out.

And this is precisely what has happened in the period of globalisation. Survival and growth has become inconceivable without greater and greater dependence on foreign capital. Earlier, the so-called Bombay Club, led by Bajaj and some other big comprador houses made some noises at the way TNCs were buldozing their way into Indian companies Similar discordant notes were heard from the various big business outfits like FICCI, CII etc. But the essence of their demand was to beg that TNCs keep them as junior parteners in the Joint Ventures(JV) set up and not turn them into mere managers of the JVs. Yet, it should be noted that even then (latter half of the 1990s), most important foreign takeovers have not been ‘hostile’, but rather have taken place as part of an agreement between the foreign firm and the Indian one. By about the year 2000 even this whimpering came to an end, and TNCs came in even more aggressively pushing up their stakes in the JVs to 90 and 100%. The comprador meekly accepted their new status. Bajaj, for example, converted his home appliance business from manufacturing to trading — much of it of the US company, Black and Decker’s products. The extent of comprador dependence, of course, varies and it is linked to a number of factors, like the share of foreign capital in the ‘Indian’ company, its dependence on foreign markets, the technical collaborations involved, whether they are mere outsourcing units for TNCs, etc. Let us take a look at the actual state of affairs.

We shall start with the much hyped info-tech sector. This is being portrayed as the golden goose of the future — the ‘great knowledge economy’, utilizing the so-called brilliance of the Indian mind!! Given that brilliance has no genetic basis and is chiefly dependent on the facilities available for research, the entire IT sector comprises nothing but cheap body-shopping in the software sector and dalals (agents) for foreign components (later assembled in India) in the hardware sector. It is the most imperialist-dependent sector of the economy.

(a) Info-tech

The entire sector is driven by software exports, which is growing at a rate of 30% per year and accounted for 16.5% of total exports. In the year 2001/02 the software and service industry had revenues of $10.1 billion (Rs 48,000 crores), a 27% increase over the previous year. 6 Of the total earnings in the software sector a massive 76% came from exports in 2001/02. For a company like TCS it is as high as 90% (63% from the USA and 26% from Europe). While earlier the bulk of the exports comprised labour-service in the imperialist country, now the trend is to utilize even cheaper labour within the country through outsourcing the work in India. The top 20 software companies account for almost half of software exports, with the top four having: Tata’s TCS (Tata Consultancy Service) at Rs 4,000 crores; Infosys Rs 2,550 crores; Wipro Rs 2,300 crores and HCL Tech Rs 1, 400 crores. 7

This entire amount comes from outsourcing by the TNCs who exploit the excessively cheap Indian labour for their routine company work. It is estimated 8 that in 1999/2000 more than 203 companies of the Fortune 1000 — i.e. 20% — outsourced their software requirements to India. Of these, 61% were from the US, while 23% were from Europe. With increasing competition in the field, the TNCs are now able to contract out to Indian companies at lower and lower rates. Thereby, with each passing day, the price of a computer operator is dropping. With the crisis in the world economy growing, and the TNCs cutting costs, such outsourcing is only likely to increase; only the rates will be depressed further. In effect this much-hyped sector comprises these high profile companies, who are nothing but labour contractors. They get paid per project, at rates far less than it would cost abroad, but enabling them to make huge profits, as middlemen, by exploiting cheap labour. So, the profits of TCS in 2001/02 was roughly Rs 1,250 crores; which was nearly equivalent to all the other 80 Tata group companies taken together.

In addition to this dependence, we find that the info-tech industries are a favourite for the FIIs, who are investing heavily in them. Seven FIIs have invested in Wipro. Satyam Computer Services has large amounts of foreign capital raised through the ADR/GDR route and Infosys Tech has FII holdings of 35%.

Those involved in hardware sales have massive tie-ups with foreign producers. To take one example, Wipro: it has a worldwide strategic alliance with Hewlett Packard to jointly develop network solutions addressed to telecom service providers; Wipro technologies has a global alliance with Mercator Software, the e-business transformation company; Wipro Peripherals has a strategic alliance with Kilburn Repor-Graphics to market their range of printers, etc.; and it has a tie-up with Adobe systems to market its software in India. Infosys Tech has set up an R&D center for Intel in India.

To conclude, the extent of dependence on imperialism of this sector, is best summed up by a glimpse of the latest Annual General Meeting (AGM) in June 2002, of the much-hyped and media-savvy Narayanmurty’s Infosys Tech: At this meeting the AGM hiked the FII limit to 100%; it approved a new member on its board of directors — none other than the ex-chief of the World Economic Forum (Davos fame), Claude Smadja; and the entire AGM was chaired by that chief India-lobbyist in the US, Larry Pressler, who is himself an independent member of the board of Infosys. What better example of Compradorism!!!

(b) Reliance

The Ambanis are by far the biggest industrial house in the country with a turnover in the last year of Rs 65,000 crores, with a profit of Rs 4,000 crores — equivalent to 30% of the profits of the entire private sector and 3% of India’s entire GDP. His close links with the US imperialists can well be understood by the fact that he was the only Indian invited to Clinton’s high-flying parties, and he was the only business person Clinton spent a few hours with personally, during his visit to India. He is a direct product of globalisation as his entire growth took place in the 1990s — before that he was barely in existence. As a classic case of the comprador bureaucrat class his swift growth was due to the enormous concessions and favours bestowed on him by successive governments, his links with imperialism, and his ruthless drive for profits. In fact when TADA was introduced, one of its first usage was against workers in his Gujarat plant. Though a large percentage of his investments are in Gujarat, he has been totally silent on the Modi-massacres there. Though his profits have been gigantic, he barely pays 2% as tax. The line of big politicians at Dhirubhai Ambani’s funeral, including the deputy prime minister, Advani, is an indication of the close ties.

Of his 18 companies, Reliance has 7 JVs and 40 technical alliances. Its present share-holding pattern has foreign capital (FIIs, GDRs) of 20%, Indian FIs/ Banks etc. of 20%, Ambani’s own capital of 40% and the public of 20%.

At Reliance’s giant refinery and petro-chemical complex at Jamnagar (Gujarat), the turnkey construction of the entire complex had been handed over to the American giant Bechtel that had 200 of its engineers at the construction site. As for the funding of Rs 9,700 crores refinery, over half, or Rs 5,000 crores, was raised in foreign currency, while the balance Rs 4,700 crores was raised locally in rupees. The tie up with imperialist interests are so deep that even now a large amount of the equipment is being imported; it depends on imported crude and other inputs; and it has a whole range of foreign tie-ups with a number of global giants — technology and licenses for the main refinery process comes from UOP of the US; Black and Veatch provides technology for the sulphur recovery facility; Linde for the hydrogen manufacturing facility; John Brown, Unipol for the polypropylene facility; and Foster Wheeler for the cooker facility.

Apart from these main businesses, the Amabanis have gone into a JV with DeBeer for diamond excavation and own one of the largest advertising companies in India — Mudra. Even this has a foreign collaboration with DOB Needham. Mudra has applied to the FIPB to raise the foreign stake to 74%!! Before the collapse of Enron, it had gone into a 50:50 collaboration to develop huge oil fields in Western India, gifted to them by ONGC.

He has lately initiated two new projects, both of which are closely linked with imperialist interests. These are the gigantic Rs 20,000 crore Reliance Infocom and the Reliance Life Science Project for research in biotechnology. For the first, a Rs 700 crores 150-acre ‘knowledge city’ has already been built; and plans a 50:50 alliance with an international giant to lay a fibre optic backbone connecting 125 cities. It has already joined hands with the UK-based WorldTel for laying a Rs385 crore optic fibre network in Gujarat. The Life Science Project has already been doing secret (and not so secret) research into stem cells for American research institutes. With Nita Ambani (elder son’s wife) as president of the notorious Harkishandas Hospital in Mumbai, human embryos are easily available for the research.

The Ambanis are today the chief comprador bourgeois in the country, whose power stretches to state and central governments — it is the brute power of big money, with full backing from the imperialists.

(c) The Tatas

The Tatas is the second biggest industrial comprador big bourgeois house in India with a turnover in 2001 of Rs 37,197 crores. We have already seen the relationship with imperialism of it most profit-making company, TCS.

It has a huge empire of 84 companies, of which 34 are joint ventures with TNCs. Besides the JVs of the pre-globalisation period, it has witnessed a spate of collaborations in the 1990s. In 1989 there was the inauguration of the Tata-Honeywell factory in Pune; then in 1993 it launched the Titan watches, which was a JV with the US’s Titan Timeproducts; in 1994 Tata Engineering formed a JV with the US based Cummins Engine Company Inc.; in 1995 an MoU is signed between the Tata Group and the American International Group USA, for insurance; in the same year Tata Electric tied up with the US’s Liebert Corporation; in 1996 Eureka Forbes and Nilfisk entered into a strategic alliance in cleaning systems; in the same year Tata Industries and Bell Canada International signed up for telecom services in A.P.; again in 1996 Inland International (US) and Tata Steel created a JV, Tata-Ryerson; and finally in 2000 the cellular properties of Tata, Birla and AT&T merged into a major JV in the telecom sector. Besides, the much-hyped indigenous car, Indica, is now being followed up by a new car, Magna, which is the result of a JV between Telco and Peugot Citron.

And all these are over and above the already existing JVs in the years before the 1990s. From the above facts it is clear that the Tatas are fully tied in an intricate web with the TNCs, particularly those from the US.

(d) Birlas

The Birlas as a family house has been divided into three groups, due to a split in the family. Yet A.V.Birla + B.K.Birla have been ranked third with a combine sales of Rs 21,517 crores.

The largest of the three, of the A.V.Birla group, Kumar Mangalam Birla, has gone headlong into a large number of tie-ups with foreign capital. In 1996 9 the group had two JVs with Power Gen of the UK to build two 1,000 MW coal fired power plants, the AT&T JV in telecoms (with Tata) and the JV with Capital Group in banking. It has also now brought in a large amount of foreign capital by raising shares through the GDR route abroad . It has raised as much as Rs 2,080 crores in this way.

In the K.K.Birla group, its flagship company, Zuari Agro Chemicals, has been jointly promoted by the Birlas and USX Corporation, USA. Zuari has entered into the project consultancy and service sector through a 50:50 JV with the UK based Simon Carves.

In the C.K.Birla group, its flagship company, Hindustan Motors, went into collaboration with Mitsubishi Motors Corporation, and also invested Rs 320 crores in a 50:50 JV with General Motors to produce the Opel Astra in India. Also its Orient Papers & Industries has gone into a JV with LG Electronics Inc. to manufacture white goods in India.

(e) Other Comprador Houses

Relatively all the other comprador houses are much smaller. In fourth place is TVS Iyenger with a turnover in 2001 of Rs 7,768 crores; next is Thapars with Rs 6,560; then the RPG Group with Rs 6,667 crores; then Bajaj with Rs 6,155; then Mahindras with Rs 6,045; then Sterlite with Rs 4,526; and at 10th place is the Jindal group with sales of Rs 4,484. 10

If we look at these, as also many of the other big business houses we find similar tie-up to varying degrees. Let us look first at Bajaj, who has been prominent among the businessmen supposedly calling for ‘swadeshi’ and belonging to the so-called Bombay Club, which at one time made some noises against the opening out, but soon fell silent. Bajaj’s motorcycle has a continuing tie up with Kawasaki; and his electricals unit has tied up with the US giant Black and Decker. Bajaj also has a significant stake in the steel firm, Mukund, (owned by the BJP man Viren Shah), which has set up a Rs 5,000 crores steel project in which the Japanese firms Kawasaki and Mitsui together hold a 50% stake.

Then the Mahindras group, also a member of the Bombay Club, has set up recent JVs with Ford, Singapore Network Service, McCann Erickson, AVL (Austria) and British telecom. Mahindra is also the chairman of the Indian subsidiary of the TNC Otis Elevators. For its tractor division it set up a JV with the American tractor major Kace. The group has also signed an agreement with Mitsubishi Motor Corporation and Samcor Manufacturing (a Ford-owned South African company), to make mini vans. In the transport sector, the group has an MoU with Sea Land Services Inc. for a 50:50 JV for the multi-model transport and port infrastructure projects. The group has a Rs 360 crore JV with US-based Owens-Cornings, which will manufacture 30,000 tons of glass fibre reinforcements annually. In power the group has tied up with the Canadian power major, Acres International for the new JV company, Mahindra Acres Consulting Engineers, in which M&M will have 51% stake. In it huge $600 million 50:50 JV with Ford, M&M has now virtually sold out the bulk of it shares to Ford.

The new tie-ups of the Godrej group have been with General Electric, the Pilsbury division of GrndMet, Sara Lee and Photo Me. Its earlier JV with Proctor and Gamble broke up.

In the Thapar Group, its company Crompton Greaves, has set up a JV with Maersk Data of Denmark for software development; and has also tied up with Exide Electronics Group to make a range of UPS systems.

Jindal’s Rs 1,000 crore 290 MW captive power plant (at the huge Vijaynagar steel plant) has been set up by Jindal Tractebel Power, a JV with the Belgian firm Tractabel. Also the oxygen plant of the Corex module, was set up by Jindal Praxair, a JV between Jisco and Praxair of the USA.

The Mafatlal Textile Company has a technical collaboration with Schiesser AG; a JV with Silvia Apparel of Italy, a technical tie-up with Eminence of France and a 50:50 JV with Burlington of the US for manufacturing Denim. Mafatlal also has a minority stake in the Gujarat Gas venture with UBI Meters of the UK’s Hansom Group.

The Rs 2,500 crore UB Group of Vijay Mallya, which dominates the liquor business of the country, is completely tied up with foreign manufacturers, marketing their brands. He operates from Dubai. Its flagship is McDowell & Co., its other major brand is Herbertson Ltd., and recently its beer-manufacturing United Breweries has gone in for a Rs 500 crore strategic alliance with Scottish and Newcastle and has launched the top-end imported beer, Kronenbourg, in a JV with Foster’s and Castle Lager. This newly elected MP, has openly stated that he is willing to sell his empire to any TNC that offers $5 billion, to devote his time to his other interests — politics and promoting Hindu religion.

Take again the giant engineering and construction company L & T (Larsen and Toubro), now defacto controlled by Birla. This Rs 5,305 crore giant has been fervently restructuring its entire business. The main focus of its restructuring has been to enter into 50:50 joint ventures with TNCs. In just these last two years it has struck a series of JVs : In engineering it has gone into a JV with Sargent and Lundy of the US and Chiyoda of Japan; in construction equipment it has JVs with CaseCorp of the US and Komatsu of Japan; in Port and Highway development the JV is with Ramboli of Denmark; in Telecom with Samsung of South Korea; in tractors with Deere of the US.

(f) The NRIs

Besides these, there are the very powerful NRI groups based abroad and with dual citizenships. Particularly the Mittals and the Hindujas are massive conglomerates and have, in the 1990s begun to play a major role in Indian industry. These tend to be more pro-imperialist than the imperialists themselves. Mittals made much of his money acting as the hatchet man of Suharto in Indonesia, while Hindujas made much of their money as agents of arms dealers. They are basically mafia, who have powerful links with Indian (and British) politicians, particularly those of the BJP. Besides them, there are other big NRIs like Swaraj Paul.

Of the three Mittal brothers, L.N. Mittal has a gigantic steel empire stretching across the globe with the Ispat International Holding Company based in the Netherlands. He is the richest Indian in the world valued by the Forbes listing at $2.2 billion (Rs 8,800 crores). His total worldwide steel production of 17 million tons is nearly equal to that of entire India’s production of 20 million tons. His current sales are $6.5 billion (Rs 26,000 crores). Though based abroad he has strong connections with India involving former ICICI chairman, N.Vagul, former SAIL chief, M.R. Nair, and former Hindustan Copper chief Ram Shankar Mishra in his business empire.

Besides, his other two brothers, based in India, with the flagship Nippon Denro Ispat (Japanese collaboration), having projected investments of over $5 billion (Rs 20,000 crores) spreading out from steel to telecom, shipping, textiles and power. The Rs 350 crore textile plant in Himachal Pradesh has tied up with the Toyada group of Japan. The huge 1083 MW power plant in Chandrapur (Maharashtra) has collaborations with Alstom of UK and Electricite de France of France.

Mittal’s gigantic telecom network in the country has made it one of the major players in this field. The Bharati Tele-ventures and other Bharati companies, with the brand name AirTel, have spread its tentacles all over the country. Pramod Mahajan, a key central minister, is one of the main promoters of the Mittal group in the country. At present Bharati already has 49% FDI and expects it to rise to 74% soon. Mittal has secured over $ 1 billion in foreign equity for Bharati, the largest foreign investment made in the telecom sector in the country. The equity fund, Warburg Pincus, has invested $ 300 million, and Singapore Telecom $650 million. Besides, Bharati has long-standing JVs with British telecom (BT) and Telecom Italia (TI). In addition Siemens Telecom entered a relationship with Bharati as its technology partner in 1985 and went on to become a JV partner. 11 So, there is little Indian about Bharati, except its misleading name. The owner is half-foreign, the money is foreign, and the profits will no doubt be siphoned off abroad.

The Hindujas, have 20 companies that constituted its Rs 3,225 crore empire in India. Through its vast web of international corporate relationships, the group was expecting to build its turnover to Rs 20,000 crore by 2001. The big expansion of its major company, Ashok Leyland, is a JV with Fiat of Italy; in telecom it is tied up with the Shinawatra Corporation and in power with National Power. Besides, the Hindujas have made enormous money as ‘traders’, acting as agents for TNCs as indicated by the Bofors deal.

Similar is the case with all the other investments in India by these gangster business houses. These NRIs have not only parked large amounts of their funds in India (on which they have been guaranteed huge returns) but also gone into industry and the service sectors. As these NRIs also have a large proportion of their wealth invested abroad, they have no interest whatsover in the country, except to loot it. Most are based abroad and have dual citizenship.

So we see that the financial attack on our country is taking place in two ways : first, by a direct attack of foreign capital through the TNCs and international financial institutions; second, indirectly, riding on the back of India’s comprador big bourgeoisie. In both cases they are facilitated by our comprador class of ministers, top bureaucrats and the vast network of political, intellectual and other agents.



1. Economic Times; June 1, 2000

2. Hindustan Times; July 7, 2002

3. Hindustan Times; May 3, 2001

4. ‘Blue Chip’ companies refers to companies that are well established and have a good standing on the stock exchange. The term ‘Benchmark’ refers to the limit allowed for foreign investment in the company. It was earlier 24% for FIIs, but over the last few years it has been continuously increased.

5. Economic Times; ET 500, 2000

6. The Hindu; July 19, 2002

7. Economic Times; May 3, 2002

8. ET 500; June 2000

9. Business Standard; Nov. 20, 1996

10. Business Today; July 21, 2002

11. Business India ; June 24, 2002




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