Raghuram Rajan On Why Global Brands Like Toyota Or Sony Can’t Come Out Of India | Business News

Last Updated:July 14, 2025, 20:41 IST

Raghuram Rajan questions India’s absence of global giants like Toyota or Sony, criticising corporate complacency and protectionist policies, urging innovation and competitiveness

According to Raghuram Rajan, Indian companies are cushioned to the point of stagnation. (PTI Photo)

Former RBI Governor Raghuram Rajan has posed a blunt question about India’s growth story: Why doesn’t the country produce global giants like Toyota, Sony, or Mercedes? Despite being on track to become the world’s third-largest economy, Rajan warns that without serious innovation, this milestone may be hollow.

In his article published in the Times of India, Rajan criticised the complacency of India’s corporate sector and the protectionist mindset of the government. “India does not have one company that is known across the world for its products – no Nintendo, Sony, or Toyota, no Mercedes, Porsche, or SAP,” he wrote, arguing that India’s so-called major companies remain confined within domestic borders, with little global presence or brand value.

He pointed to the automobile sector as a clear example. While India protects its carmakers with tariffs and policies, not a single Indian car is seen on the roads of developed markets like the US or Europe. The real problem, Rajan argued, is the illusion of growth under the shelter of “riskless capitalism”.

According to Rajan, Indian companies are cushioned to the point of stagnation. “Yet, Indian car exports are modest, focused on niche markets in Latin America, West Asia and Africa, where the durability and affordability of Indian models are prized,” he wrote, describing how policymakers often react to competition. The result? A system where firms are never forced to take real risks. No need to innovate. No urgency to compete globally. Just easy profits at home.

And with India’s domestic market booming, the temptation to remain inward-looking is even stronger. When you are getting enough profit from the domestic market itself, then why should you take the risk of making new products or exporting, Rajan asked.

Rajan did not just point fingers, he laid out a path forward. The slogan “Make in India” isn’t enough, he said. What India needs is “Invest in India”, with a deliberate push for innovation, global competitiveness, and openness to challenge.

Rather than offering companies blanket protection, the government must create an environment where competition thrives and firms are forced to think beyond borders. Only then, he argues, can Indian companies build brands the world respects.

At the heart of Rajan’s argument is a simple idea: economic size means little without the creative muscle to back it up.

view comments

First Published: