During recent press conference at Delhi along with Advani, Modi hinted Gujarat could be possible destination and Gujarat will welcome Tata’s Nano project. He chose the right analogy to invite Tata to rethink and relocate to Gujarat. The Parsi’s he said came to Gujarat and ruler here tested their wit by sending bowl full of Milk (suggesting, his kingdom is full of people and there is no space for outsiders). What wise Parsis did was to add Sugar to it implying they will mix with locals and enhance value. In fact, Parsis’ were allowed to carry their holy fire and were also allowed to keep exclusivity of their divine place. In return Parsis embraced Gujarat as their place even the native language is Gujarati. Their contribution to Indian growth is beyond doubt.

Now Narendra Modi is offering this analogy in different way. Here is Mr. Ratan Tata who is trying to save his Milk (read Nano), which WB politicians are bent upon spoiling. While other states have also offered to accommodate him and his milk, its again a visionary leader from Gujarat who is offering to add sugar to his milk. He understand how important this milk is and want to incubate and enhance value of it.

Before we examine where Tata should Go, lets see who is benefiting from this whole controversy. At a glance you feel its politicians but in reality its always to do with business.

When Tata talked about Nano no one in the world took him seriously. When he actually showed one, every major company including GM, Toyota, Ford, Nissan went back to their Drawing Boards to think how to beat this. Obviously the sheer size of these companies make it impossible for them to churn out product of this level soon, they need time. This is a big coincidence that when Tata’s were sailing smooth this controversy should erupt. Now lets say who is losing the most. At first glance you may say Tata but again in reality its India that is losing.

With a single feature which makes Nano the most unique car is its claim of clearing EURO-4. While the Indian version will be no-frills, but export version (and my guess is that’s very much part of their plan) will be more robust clearing all the regulatory norms. The environmental laws of European countries are getting tougher day by day and they are putting onus on car makers

So for every 3000 class car one Nano will offset the emission requirements by margins. Of course it will take time for Tata to prove the product domestically, achieve some economies of scale and simultaneously work on upgrading version for European market. But if they are successful they will rewrite Indian automotive history. India will become Detroit of the world. Already as I write this I read some report that global majors are moving their small car R&D to India. If Tata can show that 100% concept to product from India can work in Matured market it will open flood gates for global auto majors.

Because of delay, Tata Motors is facing problem of meeting their launch schedule. As promised however Tatas would like to go ahead with the plan and may like to meet their deadlines. Ground reality at Singur is more challenging. It is rumored that even if current controversy subsides, they will face operational issues while running plant. Some of the plots sold to them are very low level and they were converted to lake during heavy rain. Tatas had to spend huge money to fill them up. So viability of Singur plant becoming mother plant is not a good option for them considering opposition party will continue putting pressure even if this controversy dies. In this case, shareholders of Tata motors would not like company to risk such high profile investment in this uncertain terrain. According to experts, Uttarkhand is the best choice at this moment. The factory line of their Ace mini-truck has some production synergy with Nano. There is other places being talked about like Pune or MP.

But keeping their future plans into view they should consider coming to Gujarat if not immediately but surely in near future. And why should Tata consider to relocate to Gujarat. There are many reasons and readers would like to add but let me state only few here.

1. The foremost reason would be his own conviction. During Last Vibrant Gujarat Investor Summit he made a statement which took the brand Gujarat to new level. “Its stupid if you are not in Gujarat”. Now its for Sir Ratan Tata to walk the talk.

2. Quite a few Nano suppliers are from Rajkot and surrounding area. Even Tata’s other supplier will find life much easier in Gujarat.
3. Least amount of man-power lost in Gujarat, let him compare the same with any other state and decide. Extremely conducive environment for business.

4. As far as I know, Tatas have two major projects in Gujarat. (I) Tata Chemical which is second largest Soda Ash producer in the world. (II) Tata Pwoer wchih is India’s first and largest Power plant so far. While Tata Chemical was their one of the oldest investment, Tata Power is one of the latest. As he has promised in this video that he will bring more inevstments in Guajrat in Manufacturing, it makes sense for him to have on Plant for Nano assembly out of Gujarat.

5. The reason he went to WB for Nano according to him was emotional and more with Indian Cause in mind. He wanted to contibute to WB’s growth by helping state industrialize for India’s sake. Probably he should look to Gujarat in the same light. It is argued that Gujarat has to Outperform India by 1.5 times. In other words, if India has to grow her GDP at 8%, then Gujarat’s growth should be at atleast 12%. Ratan Tata should look to Gujarat from this angel too.

6. The last but not the least, Narendra Modi’s sweet invitation. I am sure Gujarat will take this precious milk to next level by adding and enhancing value.

Nano is not only Ratan Tata’s dream project its the most important innovation of Century from India. We should all support it.

Video of Ratan Tata’s famous ‘Stupid if you are not in Gujarat’ Speech