The TATA family left the Persian Sasanian Empire in the 8th century and settled in the city of Navsari in the state of Gujarat in India. The family believes in the Zoroastrian religion, in a constant struggle between good and evil, between the spiritual and the physical. Darkness symbolizes evil, so fire is always burning in temples.
The Tata family was forced to leave for India following the Muslim conquest of the Chief Caliphs, the successors of the Prophet Muhammad, who brought the gospel of Islam to Iran in the 7th century and made Islam the state religion of Persia. The Muslim oppression against the Zoroastrians, whose religion was the dominant one before the Muslim conquest, lasted for hundreds of years, and marriage ties between the first refugees to India and their family relatives in the old homeland of Persia, where Islam became the dominant forced religion, lasted for about two centuries.
The priests of the Tata family served the Zoroastrians for 25 generations in the new settlement in India. The founder of the mighty Tata group of companies, a conglomerate that includes 29 publicly traded companies, was Namasteji Tata, who was born in 1839. In 1868, he joined his father’s trading business and engaged in windmills, the silk industry and hydraulic power plants that supplied power to his factories. His son had already established steel and iron factories, the largest in India in private hands, and at the same time he planned and implemented optimization plans for his factories.
Today the Tata Group is the second largest in India with a market value of 310 billion dollars at the end of March this year. The family business expanded. One of the descendants of the founder of the family founded the Tata Airlines in 1932, which was nationalized and split by the Indian government in 1953 and became two companies: Indian Airlines for domestic flights and Air India for international flights.
This week, the Kingdom of Saudi Arabia announced that it will allow flights to all airlines over its territory, that is, to El Al as well – which will allow the Israeli company to compete with Air India, which benefited from the shortened route from India to Israel, while El Al had to bypass the Arabian Peninsula at a high price and with an additional two and a half hours for the flight, which wastes time and fuel and burdens the passengers.
The Tata Group located its head office in the dense and almost endless city of Mumbai, where there is also the massive and spectacular gate that the British built on the coast in 1913 in the Indo-Gothic style and called it “the gateway to India”. In Mumbai, up the mountain above the crowded city, Zoroastrian religious ceremonies take place: there I witnessed the custom of placing the dead on high rocks, so that it would be prey for the birds of the sky, as was the custom of their ancestors. Tata employs 935,000 people in 50 countries, its share in India’s GDP is 4% and its share in total tax collection in India is 2.2%.
The Tata Group controls companies in the fields of hydroelectric power generation, automobiles, consumer goods, power plants, steel, chemicals, communications, hotels, aviation, the capital market and the list goes on. An important company in the group is TCS, that is, Tata Consultancy Services, which has 600,000 employees in 46 countries. It provides computing, information industry and IT services at competitive prices mainly due to quality personnel, whose wages – even if they are high in Indian terms – are still low compared to comparable companies in the West.
Relations between the company and Israeli companies have been going on for decades. The company is now establishing the computerization and management system of the first digital bank in Israel, which is currently running. Tata Stone Company, 72% of whose shares are held by TCS, issued shares to the public and became the first company whose shares are worth over 200 billion dollars.
The giants of India
The flight to Mumbai, India’s commercial gateway and access gateway for its citizens, numbering more than 1.527 billion people (compared to 340 million at the time of independence in 1947 and compared to 1.45 billion Chinese), will now take about five and a quarter hours, the same as the flight time to London. It is likely that the day will not be far when both Arkia and Israel will operate on the line, which we hope will be profitable, will increase traffic and will also lower costs for companies and passengers. It will simply be easier to make business visits that will generate an increase in the trade of goods and services.
The flight time to Bangkok will also be shortened to 2 hours and 45 minutes and to Melbourne – by a similar rate to 15 and a half hours. Businessmen, investors and travelers will be able to jump to Mumbai, as they do on a flight to London – which will strengthen air trade between the countries, while at the same time maritime trade will also grow following the signing of new trade agreements and the signing of new deals.
The Indian company Adani (Adani), the sixth largest in India, won this month with Gadot Mesopim in the management of Haifa Port, which was actually privatized. “Adani Ports and Special Free Trade Zones” is the full name of the company, and it is the largest port operator in India, and a quarter of the shipping in the subcontinent passes through the 17 ports under its management.
Modi, Prime Minister of India (Photo: Reuters)India’s third largest company Aditya Birla Group deals in textiles, apparel, cement, metals, telecom and chemicals. The fourth largest company is Mahindra Group, which deals in the defense industry, energy, automobile, construction equipment and space. The fifth largest company is Bajaj Group, among the largest in the world for the production and distribution of light motorcycles and two-wheeled and three-wheeled vehicles, like all large corporations. It also deals in finance, civil engineering, electronics and sugar production.
The largest corporation in India is Reliance Industries, which has its headquarters in Mumbai. The company is engaged in drilling and production of gas and oil, telecom and retail. The group is headed by the tenth richest person in the world, Mukesh Ambani. In the second quarter of the year that ended in June, its profits rose by 46% to 2.25 billion dollars mainly due to its activities in the field of oil and chemicals. The Indian giant has five companies registered for trading in the fields of energy, infrastructure, capital, healthcare and retail finance. The Indian giant’s companies also deal in entertainment, security, transportation and aviation.
The company grew rapidly since it was founded in 1966: it dealt in the polyester industry, began to expand into other fields, and in 2002 it already became multi-armed. In 2017, it entered into a local partnership with the French aircraft manufacturer Dassault for the production of aircraft parts for the Rafale and the Falcon. In 2017, the company announced that it would invest 25 million dollars in start-up companies in Israel, and was mainly interested in big data, artificial intelligence, fintech and related services.
The Israeli connection
Trade between Israel and India increased in the first half of the year by more than 900 million dollars to about 3.5 billion dollars – an increase of 36%. Israeli exports to India increased by approximately 650 million dollars, while imports from India increased by 250 million dollars to 1.5 billion dollars. India’s share of Israel’s world trade in the first half of 2022 is only 3.7% compared to 9.6% which is China’s share of Israeli trade.
In other words, Israel and India are still far from exploiting the potential inherent in the tremendous increase in the Indian GDP in recent years, from security cooperation and political rapprochement, also with the encouragement of the US. We note that these figures are slightly distorted, since the trade in weapons, defense and attack is not included in the official trade figures between the countries. According to foreign sources, Israel is signing multi-billion dollar agreements with India, agreements spread over years, as previously published abroad.
Israeli companies that wish to do business in India must study and familiarize themselves with the structures of companies in the Indian subcontinent. The huge companies of the rich families in India control all areas, and the government has almost no power against them. Confusion may arise for investors in the share capital of the companies of the conglomerates traded on the stock exchange in Mumbai. The corporate structure has expanded into pyramids that few know their secrets, as was the case in Israel before the 2013 law that forced companies to “carpet” their corporate structure.
In India in the last 15 years, until the year 2020 (according to a study by the OECD), it is evident in the NIFTY index, which includes 50 stocks, that the companies in this index tripled the number of subsidiaries and other affiliated companies listed in the index, so that on average for each of the companies in the index ( which as mentioned contains 50 companies) already has 50 subsidiaries, granddaughters and even great-granddaughters… This structure allows the companies listed for trading “above” to make transactions among themselves and to transfer funds from one to another as needed – which creates confusion between voting rights and cash flow, according to the OECD.
No wonder, as we mentioned, that they all have firms in the field of finance. This phenomenon may again, according to the OECD, give an advantage and benefits to the main shareholders at the expense of the minority shareholders in the companies. Of the 100 largest companies listed on the Mumbai Stock Exchange, about 40 have a pyramid structure of three or more layers—a larger pyramid structure than Singapore, Thailand, Indonesia and Vietnam, in descending order. Among the 500 largest companies listed on the stock exchange, there were 61-70 companies between 2013 and today with cross-holdings, that is, a company owns the shares of its partner that owns its own shares.
The Indian Real Estate Authority has increased the supervision and requirements of the traded Indian companies: more audits of books, requirements for declarations of loans or cross collateral between companies and strong and adequate supervision of corporate governance. The authority also strengthened the status of the independent director. The activities of the local Real Estate Authority Mainly because since 2007 investments in shares by Indian institutions have increased 2.5 times. The supervision of the underwriters has been increased, and proper disclosure of their relationship to the issuer or its group is required.
Why am I bothering to say so much about membership in India? To inform any Israeli company that intends to make partnerships or joint investments with companies in India (and in order to remove doubt: it is good for Israeli companies to turn to India!) that the corporate structure proposed for the partnership should be carefully checked with one of the largest accounting firms in the world, to ensure that the investment funds will be directed to the purpose its intended. Checking and doing business that will go and jump, also because the governments of Israel and India are pushing businessmen from both countries to grow partnerships and investments.
This with a slight push from the Americans, who want to block the Chinese expansion, which may have first stopped at the port of Haifa, where an Indian company took the reins to compete with the Chinese container port operating east of the port of Haifa.