Industrialist Ratan Tata has created quite a flutter by becoming the first Indian to invest in the cash-rich, fifth-largest smartphone vendor in India, the Chinese $45-billion Xiaomi Corp. While the amount Mr Tata has invested is not known, it is a real coup for the Chinese company, which has ambitions to be the number one smartphone vendor in India in three years. They had approached Mr Tata to act as adviser and mentor.
But even more than helping us “tweak our business model”, as Xiaomi’s Manu Jain said, it is significant that Mr Tata, by putting his signature on one of China’s most successful start-ups, has helped dilute fears that Indian security agencies have had about Chinese equipment makers. Of course China’s credibility has come a long way since May 2013, when it was said that the Indian government had launched an investigation of Huawei and ZTE, both Chinese telecom equipment-makers, following security concerns over Beijing’s alleged involvement in cyber espionage.
Prior to that there were concerns about using Chinese telecom equipment to roll out fibre optic networks. But that is all in the past as India too has advanced technologically to be able to put in place security safeguards.
It is exciting to see what Mr Tata’s contribution will be in Xiaomi, which made news this week with the spectacular launch of the Mi4i, with 4i standing for India. Mr Tata has in the last one year invested in several e-commerce start-ups, but this one is different.
