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"Seek out India on her own terms."

Jagdish Khattar, Managing Director, Maruti Udyog Limited

JAGDISH KHATTAR is the second managing director of Maruti Udyog Limited, a $2 billion company and India's largest car company. A government official for 28 years, Jagdish retired from government service early to join Maruti Udyog in 1993. Since taking the reins as Managing Director, Jagdish has overseen the launch of six new Maruti car models and has expanded the company into automotive related services such as auto insurance, auto finance and corporate leasing. He is a member of the Environment Pollution Authority, which recommends policy for improved emissions and air quality in New Delhi.

Jagdish offered his perspectives on the FORTUNE Global Forum "Indian Leaders Series" questions.

Q&A

FGF: How does the job you're doing impact the future of India?

Jagdish: My company, Maruti, makes more than half the cars that are sold in India each year. That is transforming lifestyles (including in the rural hinterland), improving quality and productivity in Indian manufacturing and creating several hundred thousand jobs.

Besides making cars that are reliable, fuel efficient and designed for Indian conditions, we also provide a huge national back-up of sales outlets and service workshops. My company also offers many car related needs like insurance and finance, thus reassuring Indian families enough for them to make such a high value purchase.

We have raised quality and productivity to levels where we are able to export cars to Europe, East Asia and the Middle East. This applies to our in-house operations, as well as the hundreds of component suppliers that we work with.

The national sales and service network, together with the ancillary units, are major job creators.

FGF: How will India strike a balance between maintaining its unique culture and competing in a global economy?

Jagdish: The unique "Indian culture", if there is one, does not come in the way of competing in the global economy. Many traditions within India encourage entrepreneurship and have a value system that accepts, if not fosters, a pragmatic approach to business success and competition. Indeed, "Balance" between the material and the spiritual is intrinsic to the many traditions and sub cultures within India.

From the point of view of doing business in India, there are certain aspects of "Indian culture" that we need to be sensitive to. First, of course, is the huge diversity across the country in terms of lifestyle preferences, approach and attitude … auspicious periods of purchase in the North often turn out to be the most inauspicious ones for Indians in the South or the West! An underlying homogeneity or cohesion, that one may take for granted in many societies around the world, is clearly missing here. This could sometimes be a struggle for a marketer.

If any generalizations be made, then Indians are not particularly enamored of brands or global reputations. Rather, they scrutinize each brand to assess value and how it relates to them. They could be demanding in the sense of expecting global features and attributes, but at Indian prices.

Indian customers do like to do things their own way. While making a purchase, especially high value items like cars, they like to engage, talk and take their own time.

Having said that, numerous international businesses have adapted to Indian customer preferences and achieved considerable success.

FGF: Poverty in India is a reality. How do you foresee this challenge being dealt with during the next decade?

Jagdish: Some areas of India are technologically advanced and others are not. How will this affect India's role as an emerging market leader?

Indeed, poverty and the technological divide are issues that worry me a great deal. As a civil servant for almost 28 years before I joined Maruti, I have seen some of this at close quarters. The difference now is a sense of optimism in the country that we will be able to resolve some of these problems.

Reforms in agriculture, growth in manufacturing, government investment in roads and physical infrastructure and focus on the social sector will together enable us to raise levels of living in rural areas while absorbing more people in urban centers.

If we are unable to do that, then it could seriously hamper India's role as an emerging market leader. People are bound to reject the economic model. In a democracy, they will make sure their rejection is noted and acted upon.

FGF: In some cases, government and private enterprise must work together to realize India's economic goals. What examples can you site when this has been successful?

Jagdish: My company, where the Government partnered with Suzuki Motor Corporation, is held as an example of successful public-private partnership! (Now, of course, the government has withdrawn completely).

More appropriate examples are the partnership model in infrastructure, notably in roads, airports and ports.

FGF: Who is better equipped to deal with the challenge of education for everyone in India — the government or private business? Jagdish: I believe that while the private sector can play a much bigger role in education and other social sectors, it is the government that has to deliver on these fronts. Private sector ought to contribute in terms of managerial skills and perhaps resources. But the focus and resolve to make education happen on a national scale will have to come from the government.

FGF: What is the biggest change you've observed in India since the 1994 reforms began?

Jagdish: Before reforms began and competition came in, Maruti had a wait list of customers. In some years, our company made more money from the interest earned on customer deposits than from our operations! Now, we have to offer all manner of discounts and freebies, not to speak of high decibel advertising and model launches, to get them interested.

Overall, I think businesses in India have done a 180 degree switch and become extremely customer sensitive.

Besides, entrepreneurship has blossomed and particularly in the last 5-6 years, there is tremendous optimism and confidence among the middle classes. This was missing until the early 1990s when the discourse was dominated by socialism, suspicion, and a xenophobia arising out of our colonial hang over.

FGF: What advice do you have for the CEO of a foreign company considering doing business in India?

Jagdish: Engage with India. Seek out India on her own terms. While certain rules of business are universal, one would be better off here ignoring some of the knowledge and axioms that one may have acquired in a western setting. The problem arises when some of our assumptions clash with the reality of India, and we refuse to let go of them. Finally, choose a good set of Indian managers to help you wade through the complexity.

FGF: If you had to pick five words to describe India, what would they be?

Jagdish: Beneath the chaos, lurks opportunity

FGF: What cultural value is most precious to India?

Jagdish: More and more, I feel it is the "family". People want to consume, to win, to succeed, to travel and explore. But do all that, with the family by the side.

Click here to view the interview with Wipro Chairman Azim Premji.