Tectonic movements in the World Economy

I read in the papers this morning that the Tata Steel bid for Corus, an Anglo-Dutch steelmaker. It is the largest take-over of a foreign company by an Indian company. After the Corus accepted the offer, the company's share price dropped close to the bid price, indicating that investors don't anticipate a higher bid. It is still above the bid price indicating there is still the possibility that a Brazilian or Russian steelmaker will enter into a bidding war. If the merger goes through, Tata will be become the world's fifth or sixth largest steelmaker.
This event is important- but only as a signal of India's new found heft on the world stage. It also demonstrates that even in the absence of large amounts of onrushing foreign investment, domestic Indian companies have built up both the financial expertise and confidence to raise money to make both domestic and international investments.
Naysayers about the Indian economy come in various stripes:

• There are those that say that only the low value jobs go there and they are always destined to be servants of companies in the West.
• There are others that look at the millions of poor and think that this reflects accurately on all aspects of India, i.e. its companies, its financial systems, its labour pools etc.
• There are others who see India as essentially dependant on consumer demand in the west and is therefore vulnerable to economic downturns in the west.
• Others see the byzantine regulations as too onerous and will forever hobble Indian growth.
• Still others concede there is real growth but attribute it to the business cycle and castigate the government for not undertaking massive structural reform.
• Finally there are those that feel India has missed the boat which China was on and that India can never hope to catch up especially since it can never hope to attract the kind of capital China can hope to.

I hope to respond to all these concerns in the next post.