India’s missing engines: World’s no 4 economy lacks global giants
The many alcoves of social media are crucibles or live labs, microcosms of angst and hope. The centrifuge propels binary voices—tirades against triumphalism. Sceptics rage about the K-shaped economy and the rah-rah brigade races to script and cast the next Dhurandar.
The announcement of the trade pact with the US weaved through familiar social smog and bureaucratic fog. The issuance of the joint statement fanned pre-conceived notions of surrender and conquest. Hyperbole defines the geometry of geopolitics. What the White House called a trade deal is effectively a ‘framework for an interim agreement’. Weird as it sounds, it is just that. An agreement to talk, agree to agree again.
The pact lifts uncertainty, trims tariff from 50 per cent to 18 per cent and soothes sentiments. Yes, the US gets access to agri-markets, but it is an evolving story, as is the saga on non-tariff barriers. The next rounds afford space to push for lower tariffs and exemptions. Much depends on how the US Supreme Court rules, and how the post-ruling framework is cast. This could take weeks, months. This strategic time-out is an opportunity for India to assess the realities.
India is an outlier among outliers. It has vaulted from the 10th largest economy to the fourth largest in the world in just over a decade. It has evaded the law of necessary and sufficient conditions. It is the only economy to reach the status of the ‘fourth largest economy’ without the power of global brands and banks of global size to fund market expansion.
History provides some reference for appreciation. West Germany’s economic miracle, wirtschaftswunder, enabled its rise as the fourth largest economy in 1960. When it crossed the milestone, Mercedes was launching its sixth sedan and VW Beetles were the rage alongside Porsches. Siemens, BASF and Bosch dominated world markets in power, chemicals and engineering. The banks Deutsche, Commerz and Dresdner funded Germany’s expansion.
Japan built its domination around three Cs—cars, coolers and colour TV to be the No 4 economy. Sony had set up shop in America, launched Trinitron, CV2000 video cassette recorders and was a global consumer giant. Toyota, once a textile giant known as Toyoda Automatic Loom Works, deployed its TQM programme to create history. Its Cruisers, Coronas and Corollas captured market share. Seiko was a popular timekeeper, Nikon and Canon ended Leica’s supremacy. Fuji, Sumitomo and Mitsubishi banks funded the march of the brands.
China emerged as the fourth largest economy in 2005. Listing on Fortune 500 signifies size and success. In 2005, China had 16 companies on the global list, while India only had four PSUs and Reliance. Lenovo, originally Legend, bought over IBMs personal computing division to emerge as a global brand. Haier, once a refrigerator company, had billboards in Tokyo, offices in New York and a presence in 100 countries. China’s expansion into the world markets was spearheaded by ICBC, the world’s largest bank since 2012, Bank of China and China Construction Bank.
Indian companies—Tatas, Mahindra, TCS, Infosys, Bajaj, Asian Paints—do have a footprint in global markets. However, India punches way below its weight in value, volumes and market share. Indians are justifiably proud of the IT prowess and nearly $300 billion of exports. That said, none of the IT giants have a marquee brand or product. Yes, Indian IT runs global corps. Reality check: there are 34 tech companies on the Fortune 500 and none of them is Indian. Even in new-age businesses—e-commerce, for instance—the biggest players are either Amazons or cousins of transnationals.
In 2025, the top company of the fourth largest economy makes an appearance on the Fortune 500 at No 84. There are nine in all—five public sector units, Reliance Industries, HDFC, ICICI and Tata Motors. South Korea, with a fraction of India’s land and population, and a GDP under $2 trillion, boasts of brands such as Samsung, LG, Hyundai, Kia and 14 companies on the Fortune 500. Japan, overtaken by India in GDP, has 38 entities on the list. Germany, the third largest economy at over $5.3 trillion, has 30. And China, now the second largest economy at $20 trillion, has 124 entries with three in the top 10.
It has been argued that Indian companies are focused on the opportunities in the domestic market. That is true, but does not quite explain the lack of Indian global giants. Theory says the ability to build scale at home enables expansion abroad. That hasn’t quite played out for India. The system struggles to leverage success stories. It is moot why Isro or National Payments Corporation, global in scale and competency, are not listed and/or are expanding into global markets like a SpaceX or a PayPal.
Brands are built on ideas and technology, and demand investment in research. South Korea spends over 4.6 percent of GDP on R&D, Japan 3.4 percent, Germany 3.13 percent and China 2.5 percent. India spends 0.7 percent. This is reflected in the number of patents filed and registered. The friction in the system—regulatory cholesterol, judicial delays, opportunistic taxation and lack of credit—is not to be removed just as economic goals, but as existential imperatives.
The global economy is at a confluence of disruptions. Sustainability demands rejigging business models. India is at an inflection point and the trade deals promise a path for expansion. Its need to embrace global opportunities and competition will be challenging, and calls for a dialogue—not the 11/10 post-budget kind—between the State and the private sector. The road to Viksit Bharat cannot be paved by domestic consumption alone. It demands bold policy pivots to foster global giants.
Read all columns by Shankkar Aiyar
SHANKKAR AIYAR
Author of The Gated Republic, Aadhaar: A Biometric History of India’s 12 Digit Revolution, and Accidental India
(shankkar.aiyar@gmail.com)