India’s Importance Abroad: The Rise of the Indian Diaspora By William Ortel.
One cannot consider India without thinking about the massive impact that its language and culture have had abroad. Many common English words — among them, “thug”, “shampoo”, and “pundit”— have their origins in languages from the subcontinent.
That’s not much to go on for an investing website though. Many things are culturally relevant, yet do not directly affect the evolution of value in business. This is different.
For one thing, consider the rise of India as an outsourcing hub. Why is it that India was particularly well suited for that activity? Beyond being suitable, why was it chosen?
Narrative is an excellent means to understand far-reaching topics of this nature, so for more depth we turn to Anita Raghavan, the author of The Billionaire’s Apprentice, a book which chronicles the rise of Rajat Gupta, formerly Managing Director of McKinsey, and Raj Rajaratnam, founder of The Galleon Group.
If those names are familiar, it is because they are at the center of one of the largest insider trading scandals in history. However, Gupta was perhaps as influential as anyone else in promoting the rise of India as an offshoring hub. Along with Anil Kumar, he was “the face of McKinsey in India“.
Though the crimes these men committed are deplorable and are inseparable from their stories, there is also a lot to be learned about India from them. For one, Gupta played a significant role in promoting offshoring to India in his role at McKinsey.
Though it may be seen as negative that that story is intertwined with one of the business world’s more significant scandals, Raghavan sees the cup as being half full for the Indian Diaspora. She closes her book saying that these scandals are “a sign that Indians, much like the immigrant groups before them, have attained a certain security and a once unimaginable position in America's society.”
Listen or read on for more information, and be sure to subscribe to stay abreast of our coverage.
We're talking about her book "The Billionaire's Apprentice," which is both the story of the rise of Indian American elite and the fall of the Galleon hedge fund.
Anita, you close the book with, "As tragic and heartbreaking as Gupta's fall from grace is…" Gupta, of course, being a key player in this "…it is a sign that Indians, much like the immigrant groups before them, have attained a certain security and a once unimaginable position in America's society."
Can you expand on that?
When I was growing up in the United States in the 70s most of the Indians we knew were doctors, lawyers, and professors.
What we see today is Indians of all walks of life. We have Indian filmmakers, Indian lawyers, Indian prosecutors, Indian authors, Indian businessmen.
I recently was Googling, and I saw that there is even an Indian visioner. Someone pays an Indian woman to provide her vision of the world.
When I was growing up in the 70s the idea that anybody would pay anyone from India to provide a perspective on the globe was just unimaginable.
I really think that while this is a very sobering story and it's certainly heartbreaking for Gupta's family, it is really a sign that we as a community are no longer on the fringes of society.
We're part of American society. We're part of the fabric. We're standing up and we're being counted.
One of the stories you have in "Gupta's Rise," I don't know if it was about him or about someone else, but a partner was saying, "You guys are great consultants, but will our customers ever relate to you?"
It doesn't seem like that's so much of a concern anymore.
Exactly. Yesterday I was speaking to a group, and a young man who had been at Penn in the mid 80s came up to me and he said, "When I joined the University of Pennsylvania in 1986, somebody asked me, 'Where are you from?'"
"I said, 'India.'
"The person responded, 'What tribe?'"
I think you'd be hard pressed to find that today.
Today, Indians have a cultural identity, there was even a sitcom based on the Indian offshoring model. Indian food is enjoyed. It's a very different picture than what it was just 20 years ago.
Yeah, exactly. To harp on what it was, is that this process of getting over here from India, this is not like just a random group of Indians. This is the best and brightest of the entire country. I mean, the process to apply for a visa, how competitive was that?
Oh, absolutely. Both Gupta and my own father came on an F1 student visa. In those days, the only way you could get an F1 student visa is if you either found an American university to pay for your education or you could pay for it yourself. Most Indians back then couldn't pay for it themselves, so they were completely reliant on US institutions to fund their schooling in this country.
It was phenomenally difficult, and of course, today, Indians are being brought to the US, not just for study, but to work. There's a whole new class of visa, the HB1 visa, which brings Indians over to do particular sorts of jobs and that's a dramatic change from what it was.
Yeah. I mean, and again, on the what it was thing, that we harp on history too much here perhaps. But I just want, to people listening at home, I mean, in 1650, this is a country that had a GDP 80 percent the size of England. That's 50 years after Queen Elizabeth died.
It's not that India is a country that has only recently developed prosperity or developed some competitiveness in the world. It's been a power, really, for some time.
Right, and I, of course, am from the South of India, and we'd always talk about our 5,000 year culture and which temples and wealth that was born far before America gained independence. I think in a way, the Indian diaspora in the United States has reclaimed that legacy with their success.
How integral is that legacy in the community itself? Is it something that people would talk about? Like, would they reference a [indecipherable 05:33] that's not been able to name a single prominent Indian leader but from ancient history, tell stories of these people or not so much?
No, I don't think it was as obvious as that, but I think it was an inner confidence that we had that we actually deserved a preeminent place in this world. Perhaps because of the struggles of the Indian economy, after independence, we had been robbed of that place.
That makes a lot of sense. You see, I guess, elements of involvement with the country. In the story of Galleon Group and Raja Rajaratnam, him, of course being Sri Lankan, giving a speech at a benefit after a typhoon in Sri Lanka. It was an impassioned speech about how hedge fund managers and fishermen are the same. You see that deep level of involvement.
I think across diaspora both with the Sri Lankan, Rodger Putnam, but also with the Indians, I think one of the big drivers behind Rajat Gupta, who's the central protagonist of my story, was this desire to help his countrymen back home.
Some would even argue that may have precipitated his crime because when he came to New York City. He got involved in philanthropy in a big way. He started trying to raise money for Indian causes. One in particular, the American India Foundation.
When he first set that up, he criss crossed the country and all that he could come up with was $50,000. I think he was just so taken aback that here was this wealthy diaspora and all they could produce was a pittance.
On some level, I think he was tired of collecting checks and he wanted to be the one writing checks. What better way to do that, than to be a billionaire?
It is certainly an easy way to be able to cut a big check. One thing I want to touch on also is a cultural element. It may not be too easy to appreciate because is just the importance of skin color in Indian. I spent time there. I was struck by the prevalence of skin lightening cream.
It's $500 million annual sales industry. Raj Rajaratnam, very dark skin. Did that affect him in anyway?
I think that's why when I approached the story, I always thought the friendship between Rajat Gupta and Anil Kumar and Raj Rajaratnam on the other side, was a forced marriage.
It was not a natural friendship. The Indian community, as you say, is very much