Capitalist maturity and corporate responses to economic liberalization in India: The steel, auto, and software sectors1

• Published in: Contemporary South Asia 2000-07, Vol.9 (2), p.141-163
• Main Author: D'Costa, Anthony P.
• Format: Article
• Language: English
• ISSN: 0958-4935; 1469-364X
• DOI: 10.1080/713658727

This paper presents the creative adjustment undertaken by some segments of the Indian corporate sector to economic reforms. While economic dynamism has been far short of expectations, the commercial maturity of Indian firms in certain segments has been noteworthy. The steel, auto, and software industries in India are examined to outline some of the broader strategies of Indian firms. The diversity of strategies reflects the evolving institutional arrangements which continue to filter, regulate, and accommodate increased market pressures in contingent ways. Moving away from the historically correct but static perception that family-owned conglomerates are non-innovative, I show that today Indian capitalists, even if family-controlled, have matured considerably. The introduction of professional management and deployment of modern technologies are indicators of greater corporate dynamism. The steel, auto, and software sectors, none of which revealed any competitive strength in the pre-reform period, are good examples of Indian firms coping with market pressures at home and taking advantage of global opportunities as well. Notwithstanding such successes, the study concludes that most Indian firms remain structurally dependent on foreign technology and constrained by limited domestic markets.