When Tata Motors last week rolled out the first of 100,000 modified versions of its Indica sedan earmarked for sale in the UK, what was also being rolled out was a new phase in the ambitious globalization plans of its parent, the Tata group. Tata is already one of India’s more international companies, but its chairman Ratan Tata, believes the Rs.40,000 crore group must speed up its globalization plans. 

“We must ensure that we are not dependent on India alone,” says Tata, who heads a group heavily skewed to basic industries that is dependent on the domestic economy. “We must expand (our manufacturing) beyond India. That’s why this globalisation effort has been initiated.” The move towards the UK by Tata Motors, the second biggest vehicle producer in India, follows the $275m acquisition three years ago by Tata Tea of Tetley, a transaction that remains the biggest foreign takeover by an Indian company.

In July, Tata again broke the mould, hiring a Hawaiian-born outsider to head its hotels unit, which is itching to expand into China. This year, Tata Consultancy Services (TCS), Asia’s largest software-services provider, earned $1 billion in mostly export revenues, setting the stage for its planned initial public offering. 

Yet, as Mr. Tata tells it, these moves are only the beginning. “It is clear the action is in Asia,” he said “China is emerging as the world’s manufacturer. What is that telling us? It is telling us to undertake faster globalization. China features very prominently (in our plans) not so much as an export target, but as a manufacturing and services location.” On China, TCS is leading the way for the group, setting up a “substantial” software center in Shanghai, which it hopes will serve as a bridgehead into Japan and Korea, where expenditure on IT services is high. 

Tata is also examining options for an car parts or vehicle assembly unit in China or Thailand. Indian Hotels, which owns the Taj hotel brand, wants to own or manage hotels in Beijing before the 2008 Olympics.

“Nothing stands in the way of your investment (in China),” says Tata , arguing that investors prefer China’s welcome mix of incentives and quality to India’s “high input costs and lower productivity”. Proof is in FDI flows - overseas investment in businesses in China is 10 times greater than in India.

Tata says Indian business has been held back by years of protectionism that has led to products that lag behind world standards in terms of “price, appearance, quality or robustness”. Manufacturers must “learn to respond to consumers”. “The issue seems to be to move Indian manufacturing to a world class-level and a useful place to start is sub-assembly or key component manufacturing by setting up plant overseas,” he says.

The opportunities in east Asia are presenting themselves as Tata’s long and painful internal overhaul of one of India’s more conservative groups – are-structuring that earned him much criticism from the country’s corporate old guard and a market impatient for results – bears fruit. This year, Tata Steel, Tata Motors, and TCS – the dominant assets in a group of some 80-odd companies of which 30 are listed – turned in strong performances reflecting greater efficiencies.,

“We’ve endured flak. But what could I do during the bad times (in the 1990s)? I could not close plants and sack people like our counterparts abroad. Therefore you just stand and bleed,” he says. Though the hemorrhaging has been plugged, Tata still views the challenge head as Olympian – most notably finding a successor. He is due to hand over control a few months before the Beijing Games in 2008.