- In the old days of self-sufficiency, the Indian auto industry emitted massive pollutants without a second thought. But competition with global producers in the domestic and export markets forced them to adopt Euro emission norms. The courts too seized on the Euro norms to discipline polluting industries. The main beneficiaries are Indian consumers, not foreign buyers.
- Indian capital markets are among the best in the Third World. Yet, in 1990 the Bombay Stock Exchange was a den of thieves, where crooked brokers and companies rigged prices and duped small investors. One-tenth of all paper share certificates were for-ged. Trades were not settled for months. But when India sought to attract FIIs, they complained bitterly, and demanded reforms. That was a major reason — the Harshad Mehta scandal was another — for reforming the stock exchanges, dematerialising shares, and producing the fastest rolling settlements in Asia. Thus global pressure raised standards, benefiting Indian investors much more.
- In the days of self-sufficiency, Indian companies cooked their books, kept profits black, and rigged their share prices up. But once foreign investors entered the Indian market, they marked down the price of dodgy companies while paying high prices for companies with good standards. For the first time, honesty actually paid. Companies found that keeping their profits white and paying taxes on them was good policy, since it enabled the companies to raise fresh equity at much higher prices. The impetus for change came from foreign investors, but the main beneficiaries were Indians.
- The Institute of Charted Accountants of India has been upgrading its standards to global norms. It will fully adopt global IFRS standards by 2011.
- Banking standards were abysmal in the 1980s, and bank balance sheets were fairy tales. But after economic reforms, Indian banks adopted Basel-1 norms, and are now moving towards Basel-2 norms. The need to be globally competitive has catalysed a drive for world-class quality.
- Once, Indian drugs were reputed to be cheap but of dubious quality. The problem has not disappeared. But all the top drug companies want to become multinationals, and have raised their standards hugely. Indian hospital and research standards were once too suspect for global companies to risk clinical trials in India. But now standards have gone up, and Indian clinical trials have a decent reputation.
- When i became a journalist in 1965, consumer surveys showed that three-quarters of all food products sold loose were adulterated, often with toxic materials. Today, India has become a significant exporter of processed foods, and companies have to observe global standards. Some still cut corners, like their Chinese counterparts. But the more we export, and the more scandals we have, the better will be Indian quality and safety.
In one respect, we have failed miserable to globalise enough. In India, no inspector is executed for taking bribes, as happened in China. Why not? This is the sort of globalization that even leftists will cheer.