If Indian companies can break free from a "feudal mindset" and quickly adopt a more global outlook, it could rapidly become a major player in the global economy, a new report predicts.
Indian executives have traditionally managed a workforce comprised almost entirely of Indians, conducted business almost exclusively in India, and sold products and services to Indian customers.
Yet according to a new report by The Conference Board, operating in other countries means Indian executives managing global operations must now learn to deal with a multi-ethnic, multi-racial, and multi-cultural workforce and consumer while still meeting standards of excellence, ethics, and compliance.
Poonam Barua, Director of The Conference Board's India Operations, argues that Indian companies are going to need to develop a new focus on employee issues, corporate social responsibility and ethics - and meet or exceed acceptable standards to compete globally.
She says organisations will find that a significant proportion of their efforts will be channelled in the direction of compliance and coordination with differing complex ethical and governance standards across the globe.
Information and technology are rapidly transforming Indian business, the report says, having a major impact on customer needs and creating a more informed and demanding workforce.
But it points out that reaching across borders for innovation is how global business is being done and that this means embracing technology developed throughout the world, not just in India.
Meanwhile, India's CEOs must create and communicate a vision that is knowledge-led and shared by all employees, not just the CEO and top management, as well as developing skills in talent management, retention, and recruitment.
This means manage performance and benchmark competency standards against global norms, the report says.
Earlier this month, a study by HR consultancy Hay Group has found that while almost all the CEOs of India's top publicly traded companies focus exclusively on growth. Compared to their peers in other countries, they showed virtually no focus on internal organisational politics or personnel issues.
The Conference Board's report agrees, arguing that CEOs need "to go beyond platitudes and focus on execution". Strategy, ethics, and principles of good management that are written in text books may look relatively easy to introduce, but their successful implementation is difficult, requiring sustained efforts by senior management.
But India has a bright future if it can learn lessons from elsewhere in the world.
India's success in developing information technology solutions has given the country the branding recognition needed to awaken the world to its capabilities and potential in other sectors. The same could happen to its manufacturing sector, the report predicts.
"Once thought of solely as a local or national sector, there is a growing recognition that manufacturing could follow the lead of the IT sector in attracting a global clientele," says Barua.
"But, the manufacturing sector in India has much work to do to boost its image and reach world-class productivity and quality. It needs to attract and retain better talent, improve its supply chain, update pricing strategies, and improve its leadership."