India: A Pipeline's "Threads Of Love"; Mani Shankar Aiyar, Minister, Petroleum & Natural Gas, India
By Manjeet Kripalani
In early June, Mani Shankar Aiyar, India's plucky Minister of Petroleum & Natural Gas, made a 10-day trip to Uzbekistan, Pakistan, and Iran. His goal: to secure long-term oil and gas contracts for energy-starved India. He did deals everywhere, but he really
made international headlines when he arrived in Tehran and announced that India was ready to proceed with a $4 billion natural gas pipeline from Iran to India via Pakistan.
Almost at once the U.S. denounced the plan as a violation of trade sanctions against Iran. Aiyar stood firm, insisting India needed such a deal to guarantee supplies of gas and to ease tensions with Pakistan by building commercial ties. In June he vowed to
continue with the plans, declaring that construction could begin as early as next year. "The pipelines can prove to be the threads of love," says Aiyar.
Pretty good work for a guy who didn't even want the job. A former foreign service officer and a school chum of assassinated Prime Minister Rajiv Gandhi, Aiyar was elected to Parliament 14 years ago. He would have been happy to continue serving his constituents
in Tamil Nadu. But a year ago, when Sonia Gandhi, Rajiv's widow and President of the ruling Congress Party, asked him to take what he saw as an unappealing new ministerial berth, he just couldn't say no.
Aiyar quickly grew into the post. His diplomatic career has given him a global view of India, including its hunger for energy. India imports 80% of its oil and gas and -- despite domestic gas finds -- has little chance of weaning itself from that dependence
since its economy is growing at 7% a year.
So Aiyar made securing India's energy future his first order of business. On Jan. 6, at a closed-door meeting in New Delhi, he assembled the oil ministers of eight OPEC nations as well as Asia's other major oil consumers -- China, Japan, and South Korea. Aiyar's
vision? Lots of long-term contracts at better rates. He also wants a continuation of the pipeline from India into Bangladesh, back into India's eastern state of Mizoram, then to Burma, and finally to China and Southeast Asia. "If these pipelines can bring
together countries that have been separated from each other, we can build the biggest geopolitical pact of the 21st century," says Aiyar. Sounds like a man who likes his job now.
India: A Global Flight Plan; Naresh Goyal, Founder and Chairman, Jet Airways, India
By Manjeet Kripalani
At 4:45 p.m. on May 23, a new Airbus A340 touched down at London's Heathrow airport. Greeting the passengers with garlands of flowers was Naresh Goyal, a slight man sporting a wide smile. Goyal had plenty to grin about. It was the first long-haul flight for
his Jet Airways. And not only was it on schedule, but passengers were happy -- on the nine-hour journey, they had been treated to Jet Airways' trademarked white-glove service.
Jet Chairman Goyal's three-decade-long dream -- an international airline that "would be profitable, and among the top five globally in terms of reliability and service" -- could come true. Jet is in the black, earning $90 million on $1 billion in revenues
for the year ended in March. And it has won nearly three dozen awards for excellence. Going global will take a while yet. Having secured the right to fly to London, Goyal is aiming for service to Brussels and New York.
Jet's flight may look smooth these days, but the airline has encountered plenty of turbulence since its founding 12 years ago. New Delhi has worked hard to protect India's state-owned carriers, and in 1997 it decreed that no foreign airline could invest in
the aviation sector. That forced Goyal to buy out a 40% stake held jointly by Gulf Air and Kuwait Airways and find new local partners overnight. But he didn't let it get him down. "You can never feel defeated," he says.
The key to Jet's success? Goyal hired quality pilots and managers, poaching from Singapore Airlines, KLM, Lufthansa (DLAKY ), and British Airways. A government rule barring private players from charging lower fares than the state-run airlines didn't hurt, either.
Jet distinguished itself with top-notch service, tasty hot meals for all fare classes, and on-time arrivals. Business travelers and tourists defected en masse to Jet, and the company today has 46% of India's domestic market. Now Goyal's challenge is to make
that formula work as India deregulates and Jet goes global.
The High-Tech Banker In India
K. Vaman Kamath, Chief Executive, ICICI Bank Ltd., India
Chief Executive K. Vaman Kamath of ICICI Bank Ltd. (IBN ), India's largest private lender, likes to tell the story about how his automated teller machines spur change in a hierarchical society. Recently, N.R. Narayana Murthy, the chairman of Infosys Technologies
Ltd. (INFY ), India's premier high-tech company, was in line at an ICICI ATM on the campus of his company's headquarters. In front of him stood the company's janitor, who loved the machine. Why? He got to keep his place in line in front of the big boss. Had
he been in a bank branch, the manager surely would have given Narayana Murthy preferential service.
ICICI's ATMs are breaking down traditional barriers across India. Nearly 2,000 of the machines can be found on street corners, at gasoline pumps, in office and shopping complexes, and even in rural locations. They are part of Kamath's strategy to transform
ICICI from stodgy lender to corporations and state infrastructure projects to India's most technologically advanced and largest private bank. Since 1999, ICICI's customer base has soared from 100,000 to 15 million, about half of whom use ATMs. "The Indian
customer is more than ready for transacting business with high technology," says Kamath, an engineer who got his MBA at the Indian Institute of Management at Ahmedabad before entering banking.
Kamath, now 57 and an ICICI veteran, was appointed chief executive of the Bombay bank in 1996. India's middle class was starting to assert itself, but a sluggish ICICI was not prepared to seize the moment. So he gave generous handshakes to complacent old-timers
and hired hundreds of young managers, offering them "freedom and motivation" in a new meritocratic culture. The average employee is now 26, and most managers are in their early 30s. Kamath wrote off $1.5 billion in nonperforming loans, and diversified into
consumer finance -- a big risk for an Indian bank, since for decades consumers came last in the closed socialist economy.
Today, ICICI controls a third of India's banking market. Assets are up from $1.4 billion in 1999 to $38 billion. The bank is even going global. By using low-cost India for back-office work, ICICI's Canada branch can offer depositors rates 25 basis points
higher than rivals. "We want to be the No. 1 provider of financial services worldwide," Kamath declares.
That's a bold statement, but Kamath has played his part in bringing Indian banking up to global standards and beyond. Watch for those ICICI ATMs on street corners all over Asia.
India's OfficeTiger: Hear It Roar
Joseph Sigelman, Co-Founder and Co-CEO, OfficeTiger, India
The lights burn day and night in the gleaming glass-and-chrome building that towers over a leafy street in the southern Indian city of Madras. Here at OfficeTiger, 1,500 young men and women peer into computers 24 hours a day, analyzing and processing U.S. Securities
& Exchange Commission reports and other documents drawn up by lawyers and bankers on Wall Street. Walking the floor, sometimes even at 3 a.m., is 34-year-old co-founder and co-Chief Executive Joseph Sigelman.
The Madras office is the largest of five operations of OfficeTiger, one of India's top four independent financial-services outsourcing shops. The five-year-old company -- one of 200 such businesses that have sprung up in India since 2000 -- began by offering
secretarial services to Wall Street firms and now specializes in sophisticated financial analysis. The company employs 3,000 people on three continents, has doubled its revenues every year since it started, and expects to hit $100 million in sales by yearend.
Last year, OfficeTiger attracted a $52 million investment from Silicon Valley venture-capital firm Francisco Partners. "Joe is the quintessential entrepreneur," says Neil Garfinkel, a partner with the venture firm. "I've not met anyone else who has wanted
to do what Joe is doing."
Indeed, OfficeTiger is the only successful startup in India's $5 billion outsourcing industry that is owned and managed by a U.S. entrepreneur. Sigelman founded the company in 1999 with his classmate from Princeton University and Harvard Business School,
Randy Altschuler. The two were working in the private equity businesses of Goldman, Sachs & Co. (GS ) and Blackstone Group, respectively, when they got the idea that routine chores could be outsourced so bankers could focus on sophisticated tasks. India was
just emerging as a back-office processing center. "No one thought it was a viable idea, but we decided to do it ourselves anyway," Sigelman recalls. They called their venture OfficeTiger, after the Princeton mascot.
Altschuler stayed in New York to drum up business while Sigelman headed to Madras, the city with the largest concentration of tech talent after Bangalore. Thanks to their emphasis on quality and hard work -- Sigelman puts in 18-hour days -- OfficeTiger quickly
rose to the top. Another plus: The company's meritocracy contrasts with the hierarchical social strictures in conservative Madras. "My ignorance about India's caste system is a benefit," says Sigelman. "We have the best people, be they from the Brahmin caste
or from the lowest 'untouchable' caste."
Next on his agenda is the acquisition of a financial processing company in the U.S. His ultimate goal? "We'd like OfficeTiger to be a global professional-services firm and outgrow being an entrepreneurial back-office venture." Maybe some day Sigelman will even
move out of his Madras hotel room -- the one he checked into five years ago when he first arrived in India.
Scientific Partnering Pays Off In India
Raghunath Mashelkar, Director General, Council for Scientific & Industrial Research, India
Five years ago former Indian Finance Minister Yashwant Sinha wanted to make an upbeat announcement as he presented his annual budget. So he asked Raghunath Mashelkar, the director general of the Council for Scientific & Industrial Research, India's premier
state scientific research institute, for some guidance. Within an hour, Mashelkar sent Sinha a detailed plan outlining how India could make "world-beating products" by creating partnerships between private companies and government institutions.
Sinha was so impressed that he quickly promised Mashelkar $55 million to start the program. Since then the initiative has matched 65 private companies with 160 government institutions. All told, they're working on 34 projects, mostly in pharmaceuticals and
technology. Two, including an anticancer drug, are in advanced stages of research. Mashelkar's drive has made him one of the leading lights of Indian science. Since he took over CSIR in 1995, the institute -- with 21,000 researchers -- has undergone a dramatic
transformation. CSIR last year earned $1.26 billion from doing contract research for the likes of General Electric Co. (GE ). That's double what it earned 10 years ago. And CSIR received 196 patents last year, up from eight in 1995. "India developed nothing
in the 20th century," says Mashelkar, 62. "The 21st century has to be different."
Mashelkar knows well the despair of 20th-century India. Born into a poor family, with a widowed mother who worked as a domestic helper, Mashelkar almost dropped out of school because he couldn't scrape together tuition. In the end, he managed, and studied hard
-- often outside under the streetlights for lack of adequate electricity at home -- and discovered he had a love of physics. He earned a doctorate from Bombay University and taught for seven years at Britain's University of Salford before returning to India
in 1978.
Once back, Mashelkar was dismayed to find an unmotivated scientific community. When he was asked to take the helm at CSIR, he jumped at the chance to help government scientists "export their knowledge" by selling their research to multinationals. And he
pushed for reform of India's patent regime, which bore fruit this year with new regulations that finally require Indian companies to honor international patents. Now, multinationals are doing more research and development in India, and Indians have plunged
into original research.
These days, Mashelkar is turning his attention to India's traditional products. His labs are developing drugs by merging ayurveda -- the ancient Indian science of holistic healing -- with modern medicine. He expects the effort to help India both by developing
valuable patents and by reducing the cost of drug development, which will allow more poor people to benefit from treatments. With the likes of Raghunath Mashelkar taking the lead, India just might see the sort of 21st century this scientist dreams of.