India's Rural Poverty and Maoist Insurgency

Here is a wake up call for all of us who are interested in India’s progress.

Naxalite insurgency is spreading. (Please see BUSINESSWEEK article below).

While the law enforcement machinery must be adequately strengthened, the real solution lies in addressing the issue of poverty of the tribals and of the other rural poor who inhabit some 200 districts of India that have been declared backward and where poverty levels are worse than elsewhere in the country.

India’s business corporations have grown rich since the opening up of the economy -- there are many whose revenues exceed a billion dollars per annum and are continuing to expand their operations.

If they will each care to adopt a few districts and focus singlemindedly on eliminating poverty, the naxalite movement can be marginalized in five years. The example of Byrraju Foundation set up be the Satyam group of companies to promote healthcare, education, and improve livelihood in remote villages, is one example of how Indian industry can go about transforming villages. The Foundation currently operates in 189 villages in 6 districts of Andhra Pradesh (http://www.byrrajufoundation.org/) .

The urgent need is for India’s top companies (including all the mining companies) to join hands and adopt all the 200 backward districts, among themselves, and follow the Satyam or any other proven model of rural development.

Will CII (Confederation of Indian Industry), FICCI (Federation of Indian Chambers of Commerce and Industry) and ASSOCHAM (Associated Chambers of Commerce and Industry) convene a joint action-oriented meeting to discuss and take action on this specific issue?

I am aware that CII recently convened its annual meeting, where the issue of poverty was discussed. However, going by one leading commentator’s review, it looks like it was only a talking session, with a few good ideas thrown in. No specific India-wide action plan emerged from that meeting (http://www.indianexpress.com/story/305005.html).

It’s tme the three powerful Indian business organizations take the initiative to convene a joint meeting specifically to take action on allotting the 200 backward districts to India’s corporates and hold them to a time-bound poverty-elimination action plan .

Ram Narayanan
US-India Friendship
http://usindiafriendship.net/


http://www.businessweek.com/magazine/content/08_20/b4084044908374.htm?link_position=link1

BUSINESSWEEK

MAY 7, 2008

In India, Death to Global Business
How a violent—and spreading—Maoist insurgency threatens the country’s runaway growth

by Manjeet Kripalani

On the night of Apr. 24, a group of 300 men and women, armed with bows and arrows and sickles and led by gun-wielding commanders, emerged swiftly and silently from the dense forest in India’s Chhattisgarh state. The guerrillas descended on an iron ore processing plant owned by Essar Steel, one of India’s biggest companies. There the attackers torched the heavy machinery on the site, plus 53 buses and trucks. Press reports say they also left a note: Stop shipping local resources out of the state—or else.

The assault on the Essar facility was the work of Naxalites—Maoist insurgents who seek the violent overthrow of the state and who despise India’s landowning and business classes. The Naxalites have been slowly but steadily spreading through the countryside for decades. Few outside India have heard of these rebels, named after the Bengal village of Naxalbari, where their movement started in 1967. Not many Indians have thought much about the Naxalites, either. The Naxalites mostly operate in the remote forests of eastern and central India, still a comfortable remove from the bustle of Mumbai and the thriving outsourcing centers of Gurgaon, New Delhi, and Bangalore.

Yet the Naxalites may be the sleeper threat to India’s economic power, potentially more damaging to Indian companies, foreign investors, and the state than pollution, crumbling infrastructure, or political gridlock. Just when India needs to ramp up its industrial machine to lock in growth—and just when foreign companies are joining the party—the Naxalites are clashing with the mining and steel companies essential to India’s long-term success. The threat doesn’t stop there. The Naxalites may move next on India’s cities, where outsourcing, finance, and retailing are thriving. Insurgents who embed themselves in the slums of Mumbai don’t have to overrun a call center to cast a pall over the India story. "People in the cities think India is strong and Naxalism will fizzle out," says Bhibhu Routray, the top Naxal expert at New Delhi’s Institute for Conflict Management. "Yet considering what has happened in Nepal"—where Maoists have just taken over the government—"it could happen here as well. States, capitals, districts could all be taken over."

Officials at the highest levels of government are starting to acknowledge the scale of the Naxal problem. In May a special report from the Planning Commission, a government think tank, detailed the extent of the danger and the "collective failure" in social and economic policy that caused it. The report comes five months after Prime Minister Manmohan Singh shocked the country with a candid admission: "The Naxal groups…are targeting all aspects of economic activity…[including] vital infrastructure so as to cripple transport and logistical capabilities and slow down any development. [We] cannot rest in peace until we have eliminated this virus."

Why such rhetoric now about a movement that has coexisted with the rest of India for more than 40 years? One reason is the widening reach of the Naxalites. Today they operate in 30% of India, up from 9% in 2002. Almost 1,400 Indians were killed in Naxal violence in 2007, according to the Asian Center for Human Rights.

Collision Course

The other reason for sounding the alarm stems from the increasingly close proximity between the corporate world and the forest domain of the Naxalites. India’s emergence as a hot growth market depended at first on the tech outsourcing boom in Bangalore and elsewhere. Now the world is discovering the skill and productivity of India’s manufacturers as well. Meanwhile India’s affluent urban consumers have started buying autos, appliances, and homes, and they’re demanding improvements in the country’s roads, bridges, and railroads. To stoke Indian manufacturing and satisfy consumers, the country needs cement, steel, and electric power in record amounts. In steel alone, India almost has to double capacity from 60 million tons a year now to 110 million tons. "We need a suitable social and economic environment to meet this national challenge," says Essar Steel chief Jatinder Mehra.

Instead there’s a collision with the Naxalites. India has lots of unmined iron ore and coal—the essential ingredients of steel and electric power. Anxious to revive their moribund economies, the poor but resource-rich states of eastern India have given mining and land rights to Indian and multinational companies. Yet these deposits lie mostly in territory where the Naxals operate. Chhattisgarh, a state in eastern India across from Mumbai and a hotbed of Naxalite activity, has 23% of India’s iron ore deposits and abundant coal. It has signed memoranda of understanding and other agreements worth billions with Tata Steel and ArcelorMittal (MT), De Beers Consolidated Mines, BHP Billiton (BHP), and Rio Tinto (RTP). Other states have cut similar deals. And U.S. companies like Caterpillar (CAT) want to sell equipment to the mining companies now digging in eastern India.

The appearance of mining crews, construction workers, and truckers in the forest has seriously alarmed the tribals who have lived in these regions from time immemorial. The tribals are a minority—about 85 million strong—who descend from India’s original inhabitants and are largely nature worshippers. They are desperately poor, but unlike the poverty of the urban masses in Mumbai or Kolkata, their suffering has remained largely hidden to outsiders and most Indians, caught up as they are in the country’s incredible growth. The Naxalites, however, know the tribals well and have recruited from their ranks for decades.

Judging from their past experience with development, the tribals have a right to be afraid of the mining and building that threaten to change their lands. "Tribals in India, like all indigenous people, are already the most displaced people in the country, having made way for major dams and other projects," says Meenakshi Ganguly, South Asia chief researcher for Human Rights Watch, which is compiling a report on the Naxal movement. The tribals are supposed to be justly compensated for any land used by the companies, but the states’ record in this area is patchy at best.

The Biggest Threat

This creates an opening for the Naxalites. "If there is a land acquisition issue over a project, the Naxals come in and say, ’We will fight on your behalf,’" says Anami Roy, the director general of police for Maharashtra, the western state that has Mumbai as its capital. Upon his appointment to the post in March, Roy declared Naxalism to be the biggest threat to the state’s peace.

For those who see things differently from the Naxalites, the results can be terrifying. In January in Chhattisgarh, a village chieftain, suspected of being a police informer, was kidnapped, mutilated, and killed with a sickle—an example to any of the villagers who dared to oppose the Naxals. Company executives talk sotto voce about how dangerous it is for a villager to support business projects. "No villager has the courage to stand up to the Naxalites," says one manager who is often in the region. The possibility of violence has contributed to the slow progress of many mining projects. Nik Senapati, country head of Rio Tinto, which has outstanding permits for prospecting in eastern India, knows the threat. "It’s possible to work here," he says. "But we avoid parts where there are Naxals. We won’t risk our people."

The Naxalites often don’t hesitate to kill or intimidate their foes, no matter how powerful they are. Former Andhra Pradesh Chief Minister Chandrababu Naidu, who is credited with turning the state capital of Hyderabad into a tech center, narrowly avoided death at their hands.

Targeting Cities

But the Naxalites can offer their followers clear benefits. Lakshmi Jalma Khodape, 32, alias Renuka, a petite tribal from Iheri, Maharashtra, was just 15 when she joined up. "I had no education," she recalls. "My father was a guard in the forest department. The Naxals taught me how to read and write." Eventually disgusted by the Naxals’ violence, Lakshmi surrendered to the state police and now lives under their protection.

Undeniably, the Naxals are viewed as Robin Hoods for many of their efforts. "The tribals have benefited economically thanks to the Naxals," says human rights lawyer K. Balagopal, who has defended captured Naxalites in court cases. In Maharashtra, tribals pick tender tendu leaves, which are rolled to make a cigarette called a "bidi." Contractors used to pay them the equivalent of a penny for picking 1,000 leaves from the surrounding forest. The contractors would then take the leaves to the factory owners and sell them for a huge markup. But the Naxals intervened, threatening the contractors and demanding better wages. Since 2002 the contractors have increased the price to about $4 per 1,000 leaves.

According to the Institute for Conflict Management, the Naxalites are now planning to penetrate India’s major cities. Ajai Sahni, executive director of the Institute, says they are looking to encircle urban centers, find sympathy among students and the unemployed, and create armed, "secret, self-defense squads" that will execute orders. Their targets are the two main industrialized belts that run along the east and west coasts.

That’s an ambitious plan, but the Institute estimates there are already 12,000 armed Naxalites, plus 13,000 "sympathizers and workers." This is no ragtag army. It is an organized force, trained in guerrilla warfare. At the top, it is led by a central command staffed by members of the educated classes. The government also fears the Naxalites have many clandestine supporters among the urban left. The police have recently been rounding up suspected allies in the cities.

Ready Recruits

The Naxalites are already operating on the edge of industrialized Maharashtra state, about 600 miles from Mumbai. The litany of complaints from village women in Maharashtra’s Gadchiroli district is endless and is one reason the Naxalites find ready recruits here. The teachers don’t come to teach in the government school, and when they do, say local parents, they drink and gamble on the premises. In one village, the sixth-graders don’t know how to read and write despite the fact that the state pays teachers 20% extra for volunteering to work in Naxal-infested areas. In the civil hospital in Gadchiroli, poor villagers have to purchase all the equipment for treatment themselves, from scalpels to swabs. (The hospital says it’s well stocked.) "This is what happens in nontribal villages," says Dr. Rani Bang, a Johns Hopkins School of Medicine physician who runs a popular tribal hospital in the nearby forest. "You can imagine how bad it is for tribals."

Despite the need to ease the tribals’ poverty and blunt the appeal of the Naxalites, New Delhi still treats the insurgency largely as a law-and-order problem. States like Chhattisgarh, whose ill-trained police force is overwhelmed, have unleashed vigilantes on the Naxalites and the tribals and given the force arms and special protection under the law. The vigilantes, called Salwa Judum ("Peace Mission"), have made homeless an estimated 52,000 tribals, who have fled to poorly run, disease-infested government camps. Allegations of rape and unprovoked killings have dogged the Salwa Judum. Efforts to reach Salwa Judum were unsuccessful, but the state government has vigorously defended the group.

The problem is so severe that, in March, a public interest lawsuit was filed in India’s Supreme Court by noted historian Ramachandra Guha, who demanded an investigation into Salwa Judum’s activities. The court granted the request in April. Guha himself is not sanguine about the state’s ability to address the Naxal issue. "The problem is serious, it is growing, our police force is soft," he says. "Thousands of lives will be lost over the next 15 years."

Kripalani is BusinessWeek’s India bureau chief.

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**U.S. is One of the 'Central Pillars' of Indian Foreign Policy‏

http://www.cfr.org/publication/16130/us_is_one_of_the_central_pillars_of_indian_foreign_policy.html?breadcrumb=/publication/publication_list?type%3Dinterview

COUNCIL ON FOREIGN RELATIONS

U.S. is One of the ‘Central Pillars’ of Indian Foreign Policy

Interviewee: Bruce O. Riedel, Senior Fellow, Foreign Policy, Saban Center for Middle East Policy, Brookings Institution

Interviewer: Bernard Gwertzman, Consulting Editor


April 29, 2008

Bruce Riedel, a South Asia expert who has served in the Central Intelligence Agency and in the Clinton White House, sees the improvement in U.S.-India relations as a major accomplishment of the Bush administration, which carried forward progress made during President Bill Clinton’s tenure. Riedel says the U.S.-India nuclear agreement, which has been held up by opposition in India’s parliament, is likely to be approved next year, and that both major Indian political parties now see the United States as one of “the central pillars of India’s foreign policy.”

In looking at President Bush’s foreign policies, people have criticized him for not building on the past. On the question of dealing with India, President Bush’s administration seems to have built on [President Bill] Clinton’s work in getting a relationship going with the Indians. Would you agree with that?

Very much so. When it came in, the Bush team recognized that India was going to be one of the key powers of the twenty-first century, an emerging potential power, certainly a regional power, but perhaps a global power as well. I worked for President Clinton and for President Bush in his transition. His team very much understood that they wanted to build on what the Clinton people had done and to take it further. The Bush people have taken it further with the India-U.S. civilian nuclear deal, which offers the opportunity to remove one of the main stumbling blocks to U.S.-Indian rapprochement—the nuclear nonproliferation issue.

That agreement caused a certain amount of controversy in the United States when it was signed in 2007, but eventually it got general approval in Congress. Why is India delaying approving it?

The delay in India is entirely due to politics in the governing coalition. The Congress Party, a strong supporter, negotiated the deal and it wants to conclude it. But their junior partner in the coalition, the Communists, opposes the deal for a very simple reason. They recognize that the deal is the pathway by which U.S.-Indian relations are going to get much stronger. The Communists are basically opposed to a strong U.S.-Indian strategic partnership and they want to try to scuttle the deal. When I was in India a few weeks ago, the government made it very clear that they are determined to push this deal forward and to get the various bits and pieces of it put together to go to the International Atomic Energy Agency to finish the negotiations with them and then take it to the Nuclear Suppliers Group [multinational nuclear safeguards group]. Sooner or later they will force a showdown with the Communists but probably closer to the next scheduled Indian election in May 2009. This agreement is probably one that is going to slip over into the next administration.

Is there any chance that a new president in the United States would want to scuttle this?

I certainly hope that wouldn’t happen. This deal is the basis for strong U.S.-Indian relationship and I support it. There is certainly a possibility that a new administration may try to strengthen the nonproliferation parts of it, and might, particularly if the Democrats are elected, try to revive the Comprehensive Test Ban Treaty . But the first step there of course would be for the United States to ratify the CTBT. I don’t think we could go to the Indians and ask them to do something that we haven’t done so far.

When was the CTBT last pushed in Washington?

It died when the Senate turned it down in 1999.

In the United States, India is discussed in a slightly negative way—companies farming out work to India and that sort of thing. Is the U.S.-India trade relationship very strong right now?

The U.S.-India trade relationship is growing. U.S. trade with India has been increasing and U.S. investment in India has been growing. The Indian economy is now growing at about 9 percent [GDP growth], which by Indian standards and by any standard is really remarkable. The change in India in the last decade is one of the most revolutionary developments in the world. We see India really, at long last, beginning to have the kind of economic growth rate that people have always hoped for. There is still a great deal of poverty but there is an enormous amount of change and wealth. India will soon have the world’s largest oil refinery in Jamnagar by Reliance Industries. It’s a symbol of the country’s growing emergence as a major economic power.

It will be able to process virtually every kind of oil from around the world from heavy to light, making it really one of the most attractive refineries for oil in the world. It will not be dependent upon a certain kind of oil to come to it. It’s one example of the economic change that is going there.

That is fascinating. And the two-way trade between the United States and India, what does that show?

It’s growing. It’s certainly nothing like U.S.-Chinese trade, but after decades of being almost flatlined, it’s growing and improving. The traditional barriers to stronger U.S.-Indian economic relations, the bureaucratic jungle that India was for many years, are slowly changing in the right direction. Infrastructure in the country which has been very poor for a long time is improving. You see new big container ports in India, new airports coming into being, the beginning of a national highway system: the kinds of things to undergird real economic growth for a long time to come. All of those things are going in the right direction.

When I started in foreign affairs, India was always the leader of the nonaligned countries and was in a way in line with the Soviet bloc against the United States’ interest in most places. Now of course we’re getting closer and closer. Who is responsible for this change in India’s thinking?

The end of the Cold War freed India in some ways from thinking in those terms. There is still resistance to stronger U.S.-Indian relations. The Communists are very much opposed to it. But there is a very large consensus between the Congress Party and the main opposition—the BJP—that U.S.-Indian relations will be one of the central pillars of India’s foreign policy. When the Indians look around, they look at a troubled neighborhood. To go around the circle with them: Pakistan is in the midst of a difficult transition from military dictatorship to democracy and it’s clear that that transition is going to be a troubled one and that violence is increasing. In Afghanistan, to the north, the Karzai government is having a difficult time with the Taliban, demonstrated by the attempted assassination of President Karzai yesterday. Nepal just elected a Maoist government; Maoist rebels are a big problem in much of India today so this could be another source of trouble.

Then there are problems in Tibet which have come up this year. India probably has the most at stake with how those troubles work themselves out, being the home of the Tibetan exile community and the Dalai Lama. Then you have Bangladesh and Burma [Myamar] on the other side, which have been experiencing great deals of domestic trouble and both are now under military government. Burma, of course, has a horrendous human-rights record. So India looks around its neighborhood and it’s got many troubled neighbors and it’s trying to look for friends that will be standing by it. The United States has demonstrated in the last decade or so, first under President Clinton, then under President Bush, that it’s a solid partner for working with India.

What about the current flap about Iranian President Mahmoud Ahmadinejad, who is due in India on April 29 to talk about a natural gas pipeline that would go through Pakistan? This has been talked about for over a decade. Is this about to come into fruition? Is the United States really that opposed to this deal?

Ahmadinejad and Pakistan President Pervez Musharraf announced that they worked the Iran-Pakistan part of this deal out. I’m a little skeptical. This is a very complex deal and it’s been in the works a long time. My own suspicion is that it’s still probably years away from being operational. American relations with India should not become a hostage to Indian-Iranian relations. India does have a working relationship with Iran. India is the world’s second largest Shiite Muslim country. There are almost as many Shittes in India as there are in Iran. But India also has a very strong relationship with Israel. India is today Israel’s number one customer for military exports and India and Israel have a very close relationship in terms of space activity. India has been a launching point for Israel’s most sophisticated spy satellite, which will launch later this year, and several that are coming up. So if you compare the India-Israel relationship with the India-Iran relationship on a strategic level, India and Israel are much closer and have much more intimate relations in terms of military technology transfers and space research than India has with Iran.

India has made clear that it supports the United States and other UN Security Council members on the resolutions on Iran’s nuclear enrichment program. Right?

That’s right. In the critical vote in the IAEA on the Iran issue, India has been with us. Indian officials said to me when I was there a few weeks ago that the last thing they want to see is a second Muslim nuclear power on their western border. They have enough to worry about with a nuclear-armed Pakistan. They don’t want to see a nuclear-armed Iran.

When you talked about the troubled neighbors you didn’t talk about India’s relations with China.

One part of that is the Tibet issue but yes, there is a larger question in the relationship between Indian and China. The Indians do not want to become part of some kind of American strategy to encircle or contain China. They want to engage China. They obviously have some concerns about long-term Chinese policy. They are quick to point out the difference between India and China is that India is a democracy with a proven track record of democratic elections and democratic transitions whereas China remains a communist dictatorship. They are eager to have strong relations with China but they also know that the two of them are the emerging major powers in Asia and there will be areas of competition as well as cooperation. Indian strategic thinkers recognize that in the long term, getting their relationship with China right is probably the single-most important part of Indian foreign policy in the twenty-first century.

Has the United States taken advantage of this improved relationship with India to do much with military cooperation and in intelligence cooperation? Are we working together against terrorists for instance?

There has been progress in the right direction in the military and intelligence fields but more can be done. We’ve begun to strengthen the military to military relationship but we still have some ways to go. In the intelligence relationship, we’ve made some progress but there again more could be done. But India has been a frequent target of Islamic terrorist groups, many of them operating out of Pakistan. It is high on al-Qaeda’s list of targets , as is the United States. India should cooperate much more strongly on counterterrorism than they have in the past. I would say that this is one of the areas—military and intelligence cooperation—that the next administration should really try to take this relationship to an even higher level.

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Also see the following link for an insightful interview with Bill Emmott, former editor of ‘The Economist’ and author of a new book on ‘Rivals: How The Power Struggle Between China, India and Japan Will Shape Our Next Decade’ http://www.indianexpress.com/story/303757.html

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India-US Space Cooperation: NASA and India's Moon Mission

INDIA ABROAD, APRIL 25, 2008
Pages A22 & 23

MICHAEL GRIFFIN: THE NASA ADMINISTRATOR DISCUSSES INDIA'S MOON MISSION WITH MANAGING EDITOR AZIZ HANIFFA

**Cooperation between Indian and the US in space can be useful for both sides because the Indian technical community is superb.

**I would like to see India in future years join with us to return people to the moon, among them Indian astronauts.

**I hope that India-US space cooperation will not be impacted by the progress of the nuclear agreement, whether or not that goes well.

From his well-appointed office on the ninth floor of the National Aeronautics and Space Administration, its Administrator Dr. Michael Griffin looks out on a vista of increased space cooperation in which, he hopes, India will play an increasing role.

Dr. Griffin, who has visited India twice since taking over the top slot at NASA, is currently looking forward to the launch of the Indian Space Research Organization's moon probe Chandrayaan-1 -- not only because it will mark the first occasion an Indian space launch vehicle carries advanced United States technological payload, but because of his belief that it will signal the start of sustained US-India cooperation in outer space.

His connection with all things India dates back to his student days at the University of Maryland, when he met, and became friends with, several Indian American students who have remained among his closest friends.

One such -- Dr. Ajay Kothari, President & CEO, Astrox Corporation, in Maryland, an aerospace research and development company that works closely with NASA -- told India Abroad: "When we were taking our graduate classes, there would be four, five students only in some of them: three of whom were Indians, along with Mike and maybe one more."

Dr. Kothari describes his friend as "quick-witted with a great sense of humor, which still comes through quite often, and of course, stupendously smart. We used to share one of those graduate assistant offices with Mike, and we also had the same advisor, Professor John Anderson, then Head of the Department of Aerospace Engineering, now a very well known name in the aerospace world with eight books to his credit.

"At the time, little did we realize that our good friend Mike would one day go on to become head of the country's space program and take NASA to the new heights that he has."

Dr. Griffin started out in academia, teaching courses in spacecraft design and related subjects at the University of Maryland, Johns Hopkins University, and George Washington University. Besides various stints in the private sector, he has served as Chief Engineer and as Associate Administrator for Exploration at NASA, and as Deputy for Technology at the Strategic Defense Initiative Organization.

Q. How significant is the U.S. participation in Chandrayaan-1, India's moon project? Isn't this the first time a U.S. payload will be aboard an Indian space vehicle?

A. I believe that is true -- this is the first time, and I am delighted. It was a competitive process, and so I'm glad a U.S. payload successfully competed to be aboard the instruments suite on Chandrayaan-1. It's terrific that the Indian Space Research Organization is carrying out this mission. It's very symbolic of the kind of cooperation that I would like to see between India and the United States going forward, in space.

Q. Have you any indication from ISRO as to when it will finally take place? You were, I understand, hoping it was going to be sometime this month.

A. Loosely speaking, in June is what I am hearing. I want Chandrayaan-1 to launch when it's ready, (and) not because we reach a date on the calendar.

Q. I understand the U.S. payload, which you have said is symbolic of future cooperation, comprises some very important instrumentation that NASA is getting together.

A. It is not symbolic. It's a scientific investigation. The payload is synthetic aperture radar -- radar that will help detect the presence of water ice on the moon and the poles, if indeed it exists.

Q. During your interaction with ISRO, Chairman Dr. Madhavan Nair at the Kennedy Space Center, when he visited the U.S. in January-February, you signed a new framework agreement establishing the terms of future cooperation between ISRO and NASA in the exploration and use of outerspace for peaceful purposes. How far to you hope to take this agreement, and is the U.S.-India space cooperation now institutionalized?

A. The purpose of a framework agreement is to institutionalize the possibilities for cooperative activities on successive missions without having to go back to our parent authorities each time. To get the first framework agreement through requires that I work with the White House and State Department and other entities in the U.S. government, and I'm sure that Dr. Nair has similar constraints.

But once we have commissioned for the framework agreement, then we can continue if India does Chandrayaan-2 and if we are able to complete successfully for a payload aboard Chandrayaan that's covered in the framework agreement. And, similarly, if we want to fly an Indian instrument on an American mission, that is also covered. So, the purpose of the framework agreement is to institutionalize a certain level of cooperation.

Q. Taking off from that, do you see India in the coming years becoming a major partner for the U.S. in space cooperation?

A. Let me say at this point that I hope that's the case. Why do I hope that? Several reasons: the United States is by no means a perfect nation, but we are the world's oldest democracy and we try very hard to live up to our ideals. India is the world's largest democracy, and I think that there must be opportunities for us to cooperate because of our fundamentally shared values. In many respects, they are not completely shared, but there is a large overlap of shared values. I know this because of the many Indian friends that I have.

Another reason why I think cooperation between India and the United States in space can be useful for both sides is, the Indian technical community is superb. You have in India wonderful technical schools -- scientific, mathematics, engineering; a population that values education in terms of a way to get ahead in life, to improve oneself. In years past, in my generation, many of the best Indian students came to the United States and then stayed here. Now, many of those students are coming to the United States for advanced education and then going back home, which I think is good for the Indian people. But, that means that many people -- a significant number of India's technical community -- has had some education in America. So, they know us. There are two million Indians in America; so, many of us in the technical community have an opportunity to know them.

So we have had opportunities to get to know one another -- to learn common things together -- and it forms a basis for engineering and technical cooperation. Another reason we can work effectively together is that we do share a common language. The times when I have been to India, and the many more times when I have worked with Indians over here in the States -- India has what, four or five official languages. But the one language that almost all Indians have in common is English. [Actually, India has two official languages -- Hindi, the official language, and English, the associate official language. And India has 22 national languages.] So, surprisingly, there is a much lower language barrier between India and the United States than between the United States and everyone else we partner with, because everyone else is working in a second language. For Indians, it might be their fourth language, but they all know English. So, for those reasons there are very solid grounds for future cooperation.

Q. You visited India in 2006 and 2007, and hosted your counterpart Dr. Nair this year. But there was a time not too long ago -- just after the nuclear tests in May 1998 -- when ISRO had been slapped with sanctions, its officials were denied visas even to come here for conferences, etc. Is that now a thing of the past? Have all sanctions been lifted against ISRO, and is space cooperation between NASA and ISRO now a given, where it can be exploited to its fullest potential?

A. I am not familiar either with the sanctions or the events that led up to them, and so I just shouldn't comment. I do know that our President [George W. Bush] visited India shortly before I did, in the spring of 2006 and expressed a strong desire for greater cooperation between the two countries, which was well received on both sides. And I followed up with a visit to the space community. So, I hope that we are past any issues of sanctions, but I personally do not know where we stand on that and most crucially for your audience, NASA is not in charge of that. That is the purview of the State Department and others, but not NASA.

Q. After Chandrayaan-1, where do you foresee U.S.-India space cooperation going? Do you see some major commercialization? While Dr. Nair was here, he said commercialization benefits were a fraction of the potential -- in fact, in a speech at the CSIS [Center for Strategic and International Studies], he said it was only in the region of $10-$20 million, when it could potentially be in the billions. Are there any plans to rapidly increase this revenue base and get some American firms and industry involved in promoting such mutual commercialization?

A. I am a strong proponent, and I know that Dr. Nair is as well, of increased commercial activity in space. And to achieve that, it means the government has to lead the way. We have to welcome commercial activity. Whether there is an opportunity for commercial activity between the United States and India, I don't know -- but I hope so. The world does better when markets are open. But, again, you are outside my area of expertise and so I really don't know.

Q. But you do see tremendous potential if extraneous issues are resolved?

A. I do. If other issues can be resolved, I see the potential for commercial space activities between the U.S. and India.

Q. Do you think India should put a man on the moon? Also, is it a good thing for India to have a Mars mission?

A. I would like to see India in future years join with us to return people to the moon, among them Indian astronauts -- that's what I would like to see. As we are returning to the moon, we will be, I hope, going there in company with the international partners that helped build the space station. I would like to add India to that group, I would like to add India to that partnership.

Q. And in terms of a Mars mission?

A. That will come later. That's another generation. But in time, yes.

Q. It is something that hopefully can evolve after perhaps a joint moon mission?

A. Exactly. The moon is a target for the 20 teens, and Mars is a target for the 2030s -- so, about a generation apart.

Q. Is NASA considering including India in its planet exploration plans?

A. Not yet. I mean, we have just begun this framework of cooperation, so I hope that that will evolve.

Q. You said you were impressed with the technical schools in India, during your visit. Did you also find an increasing technological prowess in terms of capabilities, that you saw in this emerging India?

A I have only had two visits to India, three or four days each, and so that doesn't afford a lot of opportunity to measure trends. What I did say was that I had a chance to see the Engine Development Centre, the Launch Centre, the Satellite Development Centre, and I was very impressed with the quality of the engineering facilities and the engineering work that I saw. I mean that. Now I can't tell -- because I don't have a long history of observation -- whether the trend is up or level or down. I presume that it's up, but I don't have any background to know that. What I saw, I was very impressed with.

Q. The late Kalpana Chawla was the first Indian American astronaut to be part of a space shuttle mission, and she was followed by Sunita Williams -- both of whom are icons in India and among the Indian American community here. Do you foresee many Indian Americans following in their footsteps? And what next do you have in mind for Sunita?

A. I am not in charge of Sunita's new assignments, so I have no idea. She is highly regarded. As you know, she's an officer in the U.S. Navy as well as an astronaut. She is very well thought of. So I'm sure her future is good. As to whether other Indian American technical professionals will apply to and be accepted in the astronaut corps, I hope so. One of those who almost made it -- but not quite -- is a good friends of mine and was a former student of mine. I won't for privacy reasons give his name, but I was crossing my fingers that he would get accepted because he was a Ph.D. student of mine. He had applied to be an astronaut, after Sunita. I hope some of the Indian American technical community will decide that they want to be astronauts and will come join.

Q. So there's definitely a pool of qualified technical personnel for future astronauts among this Indian American community at NASA?

A. Again, depending on the skill mix that we want, yes.

Q. If the US-India civilian nuclear deal is not consummated, are you concerned that it could adversely impact on US-India space cooperation, in that US industry and business may be turned off to the extent that promoting US-India space commercialization may come to a grinding halt?

A. I don't know. I can't as NASA administrator speak to anything other than space. And what is even worse is I don't know anything about the nuclear situation or cooperation. So, I just can't comment. I hope that India and U.S. space cooperation will not be impacted by the progress of the nuclear agreement -- whether or not that goes well. There is a way we have to look at this: we can always find reasons to disagree if we want to. There are valid reasons to agree based on the values that each country holds dear, and there are valid reasons to disagree. We can always find reasons to agree in other areas. So, I suggest that as a starting point, we look for areas where we can agree and pursue those, and then let some of the disagreements follow in their own time. Sometimes, when you find areas where we can agree, you find that the areas where you thought you disagreed on aren't so bad. We will never have a perfect alignment of values between our two societies. We shouldn't even look for that. In my opinion, we should look for areas where we have common mutual interests and where our values are aligned, and make success stories out of these.

Q. When you were doing your Ph.D. at the University of Maryland's Department of Aeronautical Engineering, I believe you had quite a few close Indian colleagues like Dr. Ajay Kothari and others, who have remained your friends. What was that student experience like, where you interacted closely with these Indian colleagues and got a taste of Indian culture, food, and of course, the future top-notch calibre of Indian scientists? Ajay tells me about the fun times you guys had, and Dr. [K N] Parthasarathy spoke of how you very generously taught them to drive in your spanking new BMW?

A. I did, I taught several of them to drive. Those were fun days. My experience as a graduate student and background maybe was a little different. I had graduated from undergraduate school in 1971, from Johns Hopkins in physics and then I worked for three years. So I built up a certain amount of money -- obviously enough to afford a BMW -- and also got a Master's degree by going to college part-time in the evenings. Then, I decided I wanted to get a Ph.D. and I knew I had to do that full-time. So in 1974, I went back to graduate school, full-time with a Master's behind me and with the experience of three years at work, and I was very focused on accomplishing my goals.

The University of Maryland is a very cosmopolitan school, and when I was there we had students from Egypt, India, Pakistan, Germany, England, just in our department, as well as America. It was a very cosmopolitan place and I enjoyed that very much. There were several Indian students there and I got to know them and I was very impressed by the quality of the undergraduate education that they had -- that they brought to the school. I was also very impressed with just how nice people they were. And so I would invite them for dinner at my house or I would go out to eat with them at Indian restaurants or whatever, and learned to enjoy the food.

India is a very diverse nation and not all of you like each other very much, and so, I once said to my friends, I think I like you all better than you like each other, which became a somewhat famous remark in our group, because they often couldn't get along but I could get along with all of them. And so other things came up; those who intended to remain here wanted to learn to drive and I said, well, I will teach you to drive. So I taught several of them to drive, things like that. It just happened during one's student years, and they were very good years for me.

Q. Those friends of yours went on to start companies, head scientific departments and research facilities in top colleges and companies and so on?

A. You bet. One of them [Dr. Parthasarathy] works at the Applied Physics Laboratory [in Laurel, Maryland]. Another [Dr. Ram Diwaker] is a Director of Research at General Motors [in Warren, Michigan], and Ajay [Kothari] as you know has his own company [Astrox Corporation, an aerospace research and development company designing hypersonic aircraft] in Maryland. A couple of them have gone back to India. I mean, they all wound up getting Ph.Ds. They were a superb group of people.

Q. Do you have plans to visit India soon?

A. I'm actually hoping to go for the Chandrayaan launch if it doesn't interfere with other stuff I have to do. But my intention is to go for the launch, depending on when it is.
_____________________________________________

The World's Most Innovative Companies

BUSINESSWEEK Magazine has published its list of the world’s 50 most innovative companies in its issue dated April 28, 2008.

The list has been compiled by the US financial publication in collaboration with Boston Consulting Group.

The 50 companies are distributed, countrywise, as follows:

USA 31
Britain 4
Germany 4
Japan 4
India 2
Canada 1
Finland 1
Netherlands 1
Singapore 1
South Korea 1
Total: 50

The two Indian industrial groups, included for the first time, are the Tatas and the Mukesh Ambani-led Reliance Group. The Tata group is ranked 6th and Reliance 19th.

The Tata group ranks well above IBM, BMW, Honda Motor, General Motors, Boeing, Audi and Daimler.

Mukesh Ambani’s Reliance ranks above companies like Boeing, Exxon and BP.

The most interesting thing is that not a single Chinese company is considered innovative enough to make it to the list.

The list of companies ranked in order are

1. APPLE
2. GOOGLE
3. TOYOTA MOTOR
4. GENERAL ELECTRIC
5. MICROSOFT
6.TATA GROUP
7. NINTENDO
8. PROCTER & GAMBLE
9. SONY
10. NOKIA
11. AMAZON.COM
12. IBM
13. RESEARCH IN MOTION
14. BMW
15. HEWLETT-PACKARD
16. HONDA MOTOR
17. WALT DISNEY
18. GENERAL MOTORS
19. RELIANCE INDUSTRIES
20. BOEING
21. GOLDMAN SACHS GROUP
22. 3M
23. WAL-MART STORES
24. TARGET
25. FACEBOOK
26. SAMSUNG ELECTRONICS
27. AT&T
28. VIRGIN GROUP
29. AUDI
30. MCDONALD’S
31. DAIMLER
32. STARBUCKS
33. EBAY
34. VERIZON COMMUNICATIONS
35. CISCO SYSTEMS
36. ING GROEP
37. SINGAPORE AIRLINES
38. SIEMENS
39. COSTCO WHOLESALE
40. HSBC
41. BANK OF AMERICA
42. EXXON MOBIL
43. NEWS CORP.
44. BP
45. NIKE
46. DELL
47. VODAFONE GROUP
48. INTEL
49. SOUTHWEST AIRLINES
50. AMERICAN EXPRESS

When Indian companies make at least a third of the world’s 50 most innovative companies, hopefully in another five years, India would have arrived. The US will doubtless continue to lead the list of innovative companies in number and percentage-wise.

For the BUSINESSWEEK article, click: http://www.businessweek.com/magazine/toc/08_17/B4081best_companies_at_innovation.htm

Robert Kaplan on the US, India, China, Europe, Africa, and the new balance of power

Robert Kaplan is a senior fellow at the Center for a New American Security, where he is working on a book on the geopolitics of the Indian Ocean. In a keynote address delivered last week at the Foreign Policy Research Institute, Kaplan discusses issues that should provide ample food for thought to the foreign policy establishments of the US and India.

Reporter Trudy Kuehner has summarized his address.

EXCERPTS:

**Mr. Kaplan began by offering observations based on his recent trip to India, from which he had just returned. While there, he met with the chiefs of the army and navy, the foreign and finance ministers, and numerous other officials, along with leading intellectuals and journalists. India is focused on and obsessed with China, he said. It used to be compared with Pakistan, and India’s elite used to be obsessed with the threat from Pakistan. That has changed. They are now obsessed with the competition with China, and India is one major place where President Bush enjoys popularity, even among the intellectuals, the writers, journalists. That is because Bush, following on from the second Clinton administration, has been very pro-India.The U.S has sold the USS Trenton, a former amphibious ship, to the Indian navy; it has sold the Indians F-18 Super Hornets, it has replaced all their P-3 surveillance planes with P-8s, and there are constant bilateral military exercises between the U.S. Air Force and Navy and the Indian Air Force and Navy.

**This strong defense relationship is all about Asian balance-of-power politics. India and China, which share a long land border and therefore have to maintain stable relations, are inexorably coming into competition with each other. India’s sphere of influence extends to the borders of the old British India, from the Iranian plateau to the Gulf of Thailand, encompassing Burma, where it is involved in a quiet war of influence with China. It is extending east and west. During the days of the British viceroys in the nineteenth and early twentieth centuries, the Persian Gulf, Middle East, and Southeast Asia empire was not run from London, but from the viceroy’s headquarters in Calcutta. India is now assuming those dimensions.

**Meanwhile, China is pushing southward. The Chinese are building warm-water ports in Gwadar in Pakistan and in Mawlamyaing in Burma; they are going to start at Chittagong in Bangladesh. All these places are closer to cities in western and southwestern China than those cities are to Beijing and Shanghai. That is, developing warm-water ports in the Bay of Bengal and the Arabian Sea, both part of the larger Indian Ocean, is a way for much of China’s landmass to break out of being landlocked.

**India now has the world’s fourth largest navy; it is about to have the third largest. It will soon take delivery of its first nuclear-powered fast-attack submarine. Meanwhile, China’s navy is growing to be in asymmetric terms a peer competitor of the U.S., the Japanese Navy is now three times, soon to be four times, the size of Britain’s Royal Navy. All this is happening not just while the U.S. is deeply involved in two countries in the greater Middle East, but also as European defense budgets are starved at 2 percent or less of their GDPs.

**Asian militaries are becoming real civilian-military postindustrial complexes. The fact that the Chinese or Indian armies are so large was for decades meaningless, because they were poorly trained and badly equipped, more useful for defending long land borders and bringing in crops than for actual deployment, maneuverability, and fighting. That is changing rapidly. The Indians are using the Israelis to develop a new space satellite technology tied in with their own military. India and China’s software prowess is increasingly having military dimensions.

**If the U.S. is going to be in strategic competition with China and is going to quietly, subtly leverage countries like India and Japan, or South Korea and Australia, against China, the U.S. will continue to need a partnership with Europe.

**The Chinese are not competing with the U.S. across the board; they are concentrating on three things: (1) submarines, (2) missiles that can hit moving targets at sea, and (3) the ability to knock out satellites in space, all of which put together constitute an asymmetric threat against the U.S. navy. That asymmetric threat is not designed to get into a war with the U.S., but to deny the U.S. access whenever and wherever it wants, from the Asian mainland to the Chinese coast, to make it think twice before entering a zone where its carriers could be hit by a missile. This will dissuade U.S. movements and affect U.S. strategy. And ultimately, Kaplan noted, power is the ability to affect your competitors’ mode of operations.

** The Persian Gulf is about to become much more clogged with oil supertankers than it ever was. That is because among a number of big phenomena going on in the world today, Kaplan said, one is the growth of the Chinese and Indian middle classes. India’s middle class is growing from 200 million to a predicted 350 million. China has similar statistics. Middle classes are acquisitive. They buy things and consume a lot of energy. And so the growth of these middle classes means tremendous energy consumption, much of which is going to have to be solved by oil. Ninety percent of India’s energy requirements are going to be filled by oil in the Persian Gulf within a few years, as opposed to 65 percent today. China’s statistics are similar. We are about to see a major energy highway from the Persian Gulf across the Indian Ocean to the strait of Malacca to China and Japan and across the Persian Gulf to the west coast of India. Energy politics are going to tie China and India much more closely to the Arab and Persian world than they ever were before.

**This is why the U.S. position now in the Middle East is untenable. The U.S. has to find a way gradually, with carrots and sticks, to open up Iran and have some sort of normalized relationship with that country. The rest of the world is not going to wait the U.S. out, but is moving closer to Iran and Russia, because crude oil petroleum prices are going to continue to go up over the long run because of the growth of middle classes around the world.

**Africa represents the last untapped global food market in the world, because commodity prices are going to gradually go up, too, for basic foodstuffs, again because of the growth of the middle class in the developing world. The Chinese are all over the African continent now. We’re going to be faced with competition for resources in Africa with the Chinese, whether it’s oil in the Gulf of Guinea or coal in Mozambique and other parts of southern Africa.

**The Indian navy and air force would like to dominate the Indian Ocean from Mozambique all the way to Indonesia. But they cannot do that except as part of an alliance with the U.S. navy and air force. One major military development of the past year was an exercise off the coast of India in which India and the U.S. and also the navies and air forces of Japan and Australia took part, sort of the Malabar exercises of democracy. The Chinese took umbrage at this, seeing it for what it was: a group of countries balancing against them. But America cannot assume that it can crudely lever two democracies, India and Japan, against China, because China is the largest trading partner for both those countries.

**Going forward, the U.S. will have to build bridges with China even as it strengthens India and Japan and continues working hard to keep NATO relevant and inclusive. It will have to work on a lot of fronts, and the main theme is that if you go it alone, you can often get to a point faster than if you do it in a coalition, but if you want to get to the next point and the point after that and the point after that, you’ve ultimately got to do it with a coalition. So it’s better to go slow at the beginning and achieve some long-term ends afterwards. Kaplan emphasized that he was not speaking about the weakening of American power, but about other countries catching up and finding ways to neutralize the U.S. over time.

**Borders within Asia are crumbling. These countries are increasingly interconnected, and new economic prowess is leading to strengthened militaries. The U.S. military’s goal in the future, Kaplan concluded, is going to be a combination of having sea-basing and other capabilities that will allow the U.S. to be unencumbered by alliances, on one hand, even as we try to strengthen alliances wherever we can, on the other hand. It is a matter of being as flexible as possible. Kaplan predicts that whoever is elected the next U.S. president, whether Republican or Democrat, will evolve sooner or later into something very Nixonian in terms of foreign policy. After the first year, whoever is elected is going to be a power balancer.

**We’re entering a world of 19th-century balance of power on several different levels, Kaplan ended. All Metternich had to worry about was Europe; today we have to show the same adroitness at balancing across the whole world.

For the complete text of reporter Trudy Kuehner’s summary of Robert Kaplan’s keynote address, please click:
http://www.fpri.org/enotes/200804.kuehner.kaplannewbalanceofpower.html

The Nuclear Deal

I have never been able to understand the reason as to why some well meaning people in India, interested in India's progress, should oppose the so-called nuclear deal.

So far as India is concerned, it's merely a passport to nuclear commerce which is now totally denied to it (and it badly needs uranium -- very urgently -- because most of its atomic power projects are functioning far below capacity on account of shortage of the material -- vide the following article by a former Chairman of India's Atomic Energy Commission http://www.indianexpress.com/story/289768.html).

America may have some leverage under the Hyde Act ONLY and ONLY if India signs a contract with a US company to buy nuclear materials or nuclear technology. Once the whole process is through, why should India deal with an American company at all?

The point is that France or Russia or any other country CANNOT sell nuclear material or technology to India unless and until the process is completed.

Once the process is over, India can decide to deal only with countries other than the US which are in NO WAY bound by the Hyde Act.

US corporates will then find that they cannot sign any contracts with India unless they get their lawmakers to suitably amend the Hyde Act. Otherwise they will get NO business.

So, it will be a case, as far as India is concerned, of heads I win, tails you lose.

Ram Narayanan

India to rise from 14th to 7th biggest manufacturer in 20 years

My purpose in forwarding the following article is NOT to promote the interests of the Indian company which forms the subject of this case study of how, in the 21st century globalized world, Indian manufacturers are taking on the world’s largest companies including mighty American corporates, but merely to illustrate the fact that, not only in the sphere of software and high tech, but even in the area of manufacturing, India is graduating to become a mammoth powerhouse.

Cheers,

Ram Narayanan
US-India Friendship
http://usindiafriendship.net/
http://usindiafriendship.blogspot.com/


http://www.theglobeandmail.com:80/servlet/story/RTGAM.20080408.wrtycoon_new5_0408/EmailBNStory/Business/

GLOBE AND BUSINESS MAIL.COM

REPORT ON BUSINESS.COM

The tractor maker who has John Deere on the run

Anand Mahindra is one of the architects of a new empire rising in India. Meet him, and hear him speak, in the first of a four-part series this week by Marcus Gee

MARCUS GEE
mgee@globeandmail.com

April 8, 2008 at 7:08 AM EDT

MUMBAI — Anand Mahindra was at the World Economic Forum in Davos, Switzerland, last year when Robert Lane, chairman of U.S. farm equipment concern Deere & Co., approached him.

"I’ve been to your dealerships and seen all your manuals," he told Mr. Mahindra, whose Mumbai-based Mahindra & Mahindra Ltd. has been taking on the maker of John Deere tractors in the U.S. market.

Well, replied Mr. Mahindra with a laugh, "that’s good news and bad news."

The bad news is that the world’s biggest tractor maker has put Mahindra & Mahindra in its sights. The good news, both for Mr. Mahindra and India, is that a behemoth like John Deere is worried enough to bother.

Indian manufacturers have never troubled the sleep of executives in the rich world. India is well known for its outsourcing and information technology skills - even, more recently, for the global shopping sprees of its acquisitive billionaires - but its manufacturers are minnows beside the sharks of China, South Korea and Taiwan.

Gradually, that has begun to change.

India’s manufacturing industry grew at an annual rate of 9 per cent over the past four years, on pace with its booming economy. Boston Consulting Group predicts that India will be the 11th-biggest global manufacturer by 2015 and the seventh-biggest by 2025, up from 14th in 2005.

Mr. Mahindra, 52, is one of the reasons. The urbane, Harvard-educated business leader has taken his family firm from a staid domestic maker of jeeps and tractors to a global player with ambitions in everything from SUVs and auto parts to movie making and time share resorts. In naming him Businessman of the Year for 2007, Business India magazine called the M&M managing director "the poster child for the global Indian."

His M&M has dealerships in 25 countries and subsidiaries in Europe, Australia and South Africa. Its revenue has grown 20-fold in 17 years.

Already the largest tractor maker in the world’s largest tractor market - India - it has become third largest in the world by units sold and plans to be first by 2010. It makes India’s most popular SUV, the Scorpio, and has joined with France’s Renault to make the Logan, a no-frills sedan for Indians. It plans to launch the Scorpio and two models of pickup truck in the U.S. market next year.

"On the manufacturing side, they’re top class," said Jamshed Dadabhoy, an analyst with Citigroup in Mumbai.

Mr. Mahindra is the first to admit that Indian firms still cannot compete with the cheap skilled labour and first-rank infrastructure of Chinese manufacturers. "If we had to put out a million Barbie dolls, we just couldn’t," he said.

But India has some distinct advantages: a sophisticated stock market where companies can go to raise money in a hurry; a young, eager work force; the English language; and, above all, well-managed, forward-looking companies such as M&M.

While China’s leading companies tend to be run or heavily influenced by the state, India’s are more often private, family-owned conglomerates - sprawling business houses with storied names like Birla, Tata and Ambani. After decades of stifling government regulation, these firms are emerging as fierce global competitors under a new generation of leaders.

Mr. Mahindra is a typical product of that generation. Like many educated Indians, he is charming, hospitable and effortlessly articulate. A sought-after luncheon speaker, he mixes quotations from T.S. Eliot with references to Hindu mythology. Instead of poring over earnings reports on the weekend, he sets sails on his 45-foot catamaran Dreamcatcher, taking the helm while his fashion-editor wife, Anuradha, "balances her champagne glass."

Around the dinner table when he was growing up, his family talked about jazz and politics, not the business. His mother, a teacher and author who escaped her modest background to try acting in Bollywood movies, was as much an influence as his father, himself a "reluctant businessman" who studied diplomacy at Harvard.

The younger Mahindra studied film at Harvard before taking an MBA at the business school, finally joining the family firm in 1981 and working his way up. "I’m not someone who’s going to recite the 10 commandments of business and tell you I slaved from the age of 17 and had a lemonade stand," he said.

He would rather talk about "the right brain," and how creative thinking can foster innovation. To keep his senior executives mentally flexible, he takes them to Harvard every year for sessions not just on business strategy but science, public policy and philosophy, with concerts to enliven the evenings. He calls the program Mahindra Universe.

But don’t mistake his sense of balance for detachment. Like many Indian business leaders, he is impatient to see India catch up with its global rivals. "A company like ours - whose DNA is Indian, whose character is Indian, who wants to become an Indian multinational - well, if this succeeds, it’s a sign that Indian business in general has what it takes to succeed," Mr. Mahindra said in an interview in his company’s Mumbai office tower. "If we don’t, there’s something wrong."

Mr. Mahindra traces the firm’s competitive zeal to its founders. His paternal grandfather, J.C. Mahindra, became India’s iron and steel czar during the Second World War, rationing the precious commodities in a time of shortage. J.C.’s brother, K.C. Mahindra, was the head of India’s supply mission in Washington. He channelled U.S. material to Britain’s forces in India. They went into business together after the war, trading iron and steel, then assembling jeeps - "two salaried blokes," as Mr. Mahindra puts it, "who got patriotic and decided to start a company with the princely sum of 100,000 rupees" (about $2,500 at today’s rates).

In 1947, just as the company was starting up, India won its independence from Britain. "So in a sense they were born at the same time, born with the same ideals as the country: To prove that this new country could survive and compete with the best in the world."

Like many others, the company languished under the "licence raj," the strict regime of protectionism and government micromanagement that prevailed until a financial crisis forced New Delhi to open up the economy in 1991.

So when Mr. Mahindra took over from his uncle Keshub and father Harish in 1997, "we decided we should live up to the founders’ expectations."

As India emerged from decades of stultifying government regulation, Mr. Mahindra shaped it up for national and global competition. He took on the company’s powerful unions. He shut unproductive plants. He hired away top executives from Xerox and General Motors and India’s Tata Group.

As India’s economy took off, he launched new products like the hardy Scorpio, which withstood competition from established brands such as Honda, Ford and Toyota to grab a quarter of the domestic market. Plans for an eco-friendly hybrid are on the books.

But Mr. Mahindra seems proudest of M&M’s success against Deere & Co., the Illinois company founded in 1837 whose green-and-yellow vehicles are a symbol of American industrial might.

"John Deere considers us enemy No. 1," says Mr. Mahindra. "We are the little baby cobra they have to kill."

M&M has found a niche in the United States with its sturdy, relatively low-horsepower tractors, popular among hobby farmers and suburban lawn masters who don’t need a monster tractor and like Mahindra’s reliability. Sales have grown 25 to 30 per cent over the past four years, putting Mahindra fourth in the market, inching toward third.

Deere was worried enough that it offered a $1,500 (U.S.) rebate to anyone who would trade in his or her Mahindra for a John Deere. Mahindra, for its part, tried to lure Deere customers with an ad showing a pretty blonde riding a Mahindra. "Deere John," read the caption, "I have found someone new."

Success or failure in the United States won’t make or break M&M, but Mr. Mahindra takes the Frank Sinatra view: "If you can make it there, you can make in anywhere."

"That’s why you go to certain sophisticated markets, because it pulls you up to a different weight class of competition," he said. "That’s why you do the U.S., that’s why you do the U.K. They’re the ones that keep yanking us into the future."

Companies like Mr. Mahindra’s M&M are doing the same for India.

___________________________________________________

The Series

By Marcus Gee, in Mumbai

Wednesday: Airport developer G.M. Rao is modernizing India’s crumbling infrastructure.

Thursday: Information-technology wizard Azim Premji leads

India’s rise as a flat-world competitor.

Friday: Industrial magnate Ratan Tata shakes up the global auto market by launching the world’s cheapest car.